Importance of declaration in marine insurance
Marine insurance is a type of insurance that protects against losses and damages associated with the maritime industry. This includes insuring ships, cargo, and other assets against risks such as accidents, theft, piracy, and natural disasters.
In India, the marine insurance market is regulated by the Insurance Regulatory and Development Authority of India (IRDAI). The IRDAI has issued guidelines on the types of insurance products that can be offered in the market, and also monitors compliance with these guidelines to ensure the integrity of the market.
Marine insurance policies in India can be divided into two main categories: hull insurance and cargo insurance.
Hull insurance provides coverage for the vessel itself, including its machinery, equipment, and any other property on board. This type of insurance is typically required by law and is necessary to protect the vessel and its owners against financial losses due to accidents, damage, or other unforeseen events.
Cargo insurance, on the other hand, provides coverage for the goods being transported by the vessel. This type of insurance protects the insured party against losses or damages to the cargo due to accidents, natural disasters, or other unforeseen events.
This is basically an open policy of 12 months duration and such policies are issued to Concerns having estimated annual turnover of Rs 2 crores or above. All transits upto the sum insured are covered without any exception and total value of goods in transit are required to be declared atleast once in a quarter in the form of a certified statement. Period of insurance for this policy is one year.
This Insurance covers
All Risks subject to Inland Transit ( Rail or Road) Clause –A
Inland transit ( Rail or Road) Clause (B) ( Basic Cover)
The policy may be extended to cover SRCC, subject to payment of additional premium.
The policy is not assignable or transferable. However where the interest in respect of goods in transit has passed on to the consignee, claims, if any, may be settled with such consignee, if so requested by the assured.
The sum insured under the policy shall be on the basis previous year’s annual turnover. In case of fresh proposal, the sum insured shall represent a fair estimate of annual dispatches. If the estimated annual turnover during the year is found to be inadequate due to increase in the Assured’s turnover, not envisaged at the inception of the policy, an increase in the Sum insured may be allowed on payment of the difference in premium involved. Such midterm increase should not be more than twice during the currency of the policy. Midterm increase in Sum insured may be allowed twice only during the currency of the policy. Final premium will be adjusted (downward only) on the basis of actual turnover of goods covered.
