A Guide To Declaration Policy In Marine Insurance
Table Of Contents
- What Is The Marine Open Declaration Insurance?
- Features Of Marine Open Declaration Insurance
- 1. Multiple Shipment Coverage
- 2. Cost Effective
- 3. Provides Continuous Coverage
- 4. Flexibility
- 5. Simple Administration
- Who Should Buy A Marine Open Declaration Insurance?
- 1. Importers And Exporters
- 2. Logistics And Freight Managers
- 3. Manufacturers
- 4. E-Commerce Businesses
- 5. Retailers
- 6. Wholesalers And Distributors
- Exclusions And Inclusions Of The Marine Open Declaration Policy
- Exclusions Of Declaration Insurance
- Inclusions Of Declaration Insurance
- Marine Open Declaration Policy Is Ideal For Inclusive Coverage
Being in the transportation business is not an easy task; it involves taking risks, such as delayed shipments due to weather, damaged products due to spillage, and container damage due to collision, among other issues. That is why marine or freight insurance is a necessity for every transporter. Marine insurance primarily covers the loss during transit due to accidents, hijacks, fires, collisions, and overturnings.
However, if you are in the business of transportation and dealing with such risks on a daily basis, buying marine insurance for each shipment might not be convenient. Thus, buying an open declaration policy in marine insurance is more suggested.
What Is The Marine Open Declaration Insurance?
Marine open declaration insurance is a policy that provides you coverage for all goods in transit or in shipment for one year under a single policy and declaration.
Other marine insurance policies require you to make multiple policy declarations in a year for each shipment you make.
However, in the declaration policy, you are allowed to make a single declaration for all the shipments for a specified policy period.
Features Of Marine Open Declaration Insurance
Continuous coverage over a period seems to be the ultimate benefit of a marine open declaration insurance policy.
However, here are the best features of a marine open declaration insurance policy.
1. Multiple Shipment Coverage
In marine insurance, making a declaration for each shipment can be inconvenient. However, when you are insured under a declaration of open insurance, all shipment declarations made during a year are covered under a single policy. The policy is quite convenient for transport businesses.
2. Cost Effective
As the declaration policy in freight insurance covers multiple shipments under one policy, it makes it cost-effective.
Moreover, the facility to declare shipments as they happen also helps in avoiding over- or underinsurance, thus optimising the insurance premium costs.
3. Provides Continuous Coverage
In open declaration marine insurance, the businesses get the benefit of continuous coverage for all shipments within a policy year.
Policyholders can declare each shipment as it occurs, ensuring each shipment is protected without needing to obtain individual policies for each shipment.
4. Flexibility
The declaration policy in marine insurance offers significant flexibility to businesses, allowing them to adjust the declared value of shipments as needed.
It provides accurate coverage, reflecting the actual value of goods or shipments being transported. It is a valuable feature for businesses that handle fluctuating shipment volumes and values.
5. Simple Administration
In the declaration policy for freight insurance, managing multiple shipments under a single policy reduces administrative tasks for the business.
Thus, instead of dealing with multiple policies and renewals, the open policy streamlines the entire procedure, making it easier to manage and track coverage.
Who Should Buy A Marine Open Declaration Insurance?
Any business that needs extensive shipping of goods that are exposed to high risks should buy a marine open declaration policy.
The policy will cover multiple shipments for a span of 1 year based on the sum you have insured.
Nevertheless, here are the business entities that need to buy a marine open declaration policy.
1. Importers And Exporters
Import and export businesses trading in shipments on a daily basis need to have a declaration policy in their marine insurance.
It protects their goods during overseas shipment and covers potential risks across borders.
2. Logistics And Freight Managers
Companies that deal with organizing and handling freight and shipments need to have a declaration policy in freight insurance to ensure that all their clients’ goods and shipments are protected against any loss.
3. Manufacturers
Manufacturers who produce goods and ship them in wholesale markets, both nationally and internationally, should get a declaration policy in marine insurance.
It ensures their shipped goods are protected against damage throughout the year.
4. E-Commerce Businesses
Online sellers who ship goods domestically and internationally can benefit from open declaration insurance. It provides coverage of the risks associated with shipping products to customers.
5. Retailers
Retailers who have to import products from the wholesale market also need to have a declaration policy in their marine insurance.
The policy ensures that their investment and inventory are protected as the goods reach their final destination safely from the point of origin.
6. Wholesalers And Distributors
Wholesalers and distributors who purchase goods in bulk and ship them to different locations need to have an open declaration policy in freight insurance to protect against transit risks that are involved in moving goods in bulk.
Exclusions And Inclusions Of The Marine Open Declaration Policy
While a marine open declaration policy includes or covers a wide range of risks. Inherent vice of goods, delays, and problems with packing are the main exclusions in this policy.
So, when you have a business that extensively needs support for shipping over a certain period, you need to know the things that are not a part of the policy.
Exclusions Of Declaration Insurance
- Loss or damage of goods or cargo due to willful misconduct
- Goods or cargo loss or damage due to normal wear and tear
- Loss or damage of cargo or goods due to improper packaging
- Goods or cargo loss or damage due to financial default or insolvency
Inclusions Of Declaration Insurance
- Loss or damage due to the ship sinking
- Goods or cargo loss, or damage due to collision
- Loss or damage of goods or cargo due to a fire accident
- Goods or cargo loss or damage during loading and unloading
- Loss or damage of goods or cargo due to theft
Marine Open Declaration Policy Is Ideal For Inclusive Coverage
Declaration policy in marine insurance is one of the best coverage options for any business or individual dealing with frequent goods.
This policy provides continuous coverage throughout the year to all the shipments made within a policy period.
This reduces the need for managing individual policies for each shipment, streamlining the entire procedure.
Businesses can look out for insurers like TATA AIG, which provide a declaration policy in their marine insurance for more comprehensive protection against marine loss.
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