property insured, which is paid by the insurance company as compensation.

d. Specific policy
–
like the average policy, defines the risk coverage when under-insurance takes place. It is a policy in that it
undertakes to indemnify the actual loss only within the extent of value insured.
e. Reinstatement policy

–
the insurance company undertakes to replace the property damaged by fire. In this policy, the actual loss is not
indemnified in monetary terms but insured goods or property is replaced.
3. Types of fire insurance policy on the b a s i s o f v a l u e o f s t o c k

a.
Floating policy
–
is one by which one or several kinds of goods lying at different locations are insured under one policy and fore one
premium.
b.
Excess policy

–
is supplementary fire insurance policy, which is purchased to cover additional risks beyond the coverage of
original first loss policy. In such a case, a first loss policy is purchased for minimum stock value and
additionally an excess policy is purchased for an anticipated increase in the total value of stock. This fire insurance
policy is purchase by such merchants whose stocks fluctuate from time to time.
c.
Declaration policy

–
is issued for the maximum value of stock to be insured. At the beginning of contract, three-fourths of
the premium payable is charged from the insured in advance. Every month, the policyholder is required to declare
the value of present stock. In case of loss by fire, the compensation is made on the basis of the declared value. At
the end of the insured period, based on the values of stock declared, the total of premium payable is worked out as
average.
MARINE INSURANCE POLICY

–
a contract whereby the insurer indemnifies the loss caused by perils of the sea. The duration of its effectiveness,
insurable interest of the insured and the principle of utmost good faith are, among others, necessary elements in a
marine insurance policy. Besides, the value of the object must be clearly described for the sake of indemnity. It is
also necessary that obligations and liabilities to be taken by the insurer must be declared in the policy. The subject
matter of marine insurance policy generally includes ship, cargo, and freight. However, two additional elements i.e.
terms of time factor and valuation of object are also considered as legal requirements for the insurance policy.
TYPES OF MARINE INSURANCE POLICY
1 . T yp e s o f m a r i n e i n s u r a n c e p o l i c y o n t h e b a s i s o f h u l l
 Loss may occur in or to the ship if any event happens in sea routes. The ship may be totally or partially damaged.
In any case, the loss is very big one. Since the ship is very valuable, it becomes necessary to insure it. The insurance
of ship is called hull insurance policy. Generally, hull insurance is entered for a specified period; and if any loss
incurs within the period, the insurer indemnifies the loss. The following are the types of marine insurance policy
on the basis of hull:
a. Single vessel policy
Single vessel policy covers only one ship. Thus the shipping company possessing many ships may enter into
contract with the insurance company for each ship separately.
b. Fleet policy
A shipping company may own a number of ships. The insurance company may insure all the hips under a
single policy, which is known as fleet policy. Fleet policy allows the shipping company to include several ships of
a particular route under a single policy.
c. Construction policy
The ships under construction are insured under construction policy. This policy covers the ship that is under
construction in the yard, and is not allowed for normal sailing in the ship, except for trail sailing.
 2. Types of marine insurance policy on the b a s i s o f c a r g o
In marine insurance, not only ships but also cargo is insured against the loss caused by sea perils. When the owner,
consignor or sender insures the cargo against the marine loss, it is called cargo policy. The cargo insurance policy is
of three types:
a. Named policy
As its name suggests, the name and registration number of a particular ship, and the quantity of each type
of goods on board are written clearly in such a policy. If any loss occurs to the goods on board as specified in the
policy, the insurance company is liable for the loss.
b. Floating policy
Floating policy is also known as running cargo policy. It describes the general terms and leaves the amount of
each shipment and particulars to be declared later on. This policy is taken out for a round large sum, which is
specified at each declaration and is attached to each shipment. It is a protection for the risk of loss of cargo, the
value of which may change from one shipment to another.
c. All risk policy
All risk

policy covers all risks associated with the cargo from go-down to go-down. Besides, the risks of sea perils, other
risks of loss caused by out-break of war, strikes, negligence and so on are also covered under this policy.
3. Types of marine insurance policy on the b a s i s o f f r e i g h t
The freight is carriage payable to the shipping company by the owners of the goods upon the arrival of ship at the
port of destination. A shipping company can purchase the freight policy in order to have protection against the loss
of freight and other contingent liabilities. Generally, freight insurance policies are of two types:
a. With cargo freight policy
It is a contract between the shipping company and the insurance company for the protection of cargo as well as
freight from any unseen risks. Under this policy, the insurance company indemnifies the loss of cargo as well as
the loss of freight of the cargo to the shipping company.
b. Without cargo freight policy
If the contract between the shipping company and the insurance company takes place only for the protection of
freight of cargo from any contingent loss, such a contract is called without cargo freight policy.
4 . T yp e s o f m a r i n e i n s u r a n c e p o l i c y o n t h e b a s i s o f t e r m

The marine insurance policy can be classified on the basis of term of period for the voyage:
a. Time policy
Time policy provides the insured to cover all marine risks for a specified period of time not exceeding 12
months.
b. Voyage policy
A voyage policy covers all marine risks involved in a particular sea voyage, irrespective of the time taken
to accomplish the voyage. Therefore, the policy is issued to cover the voyage from the port of origin to the port of
destination.
c. Mixed policy
Mixed policy is a combination of both time and voyage policy. This policy therefore combines the elements of
both time and voyage policy. This policy is taken by the insured for specified time and voyage.
5. Types of marine insurance policy on the basis of valuation
On basis of valuation of objects being shipped, there are two types of marine insurance policy:
a. Valued policy
In this policy, the value of objects insured is fixed in advance at a time when the contract is consented. If any loss
occurs, the same will be indemnified on the same basis.
b. Unvalued policy
Under this policy, the value of the object is not specified. The value of the object is to be calculated after
considering many expenses during the period. Thus, the value for indemnity is ascertained if and when the loss
actually occurs.
TYPES OF RISKS COVERED BY MODERN MARINE INSURANCE
The
marine insurance
covers many risks. The types of risks covered by modern marine insurance are as follows:
1. Perils of the sea
Perils of sea refer to any type of incident of contingent accidents or casualties at the sea. In course of the voyage,
the ship may be damaged due to sea storm, sea pirates, tsunami and accidents of any kind. These all risks

are covered by marine insurance.

The goods may be stolen during a sea voyage. Therefore, theft is one of the risks associated with the sea
transportation. For the purpose of marine insurance, the thieves must not be the captain and his crew themselves or
the people traveling by the ship. They must be outsiders, who use force for stealing goods.

4. War risks
The shipping companies may have to face many risks during the war period. There may exist a risk of loss of
ship, cargo and freight due to attacks and counter defensive operations. War risks are insurable in marine
insurance.
5. Land risk
Marine insurance indemnifies the subject-matter (cargo) of the parties right from the go-down of the exporting
country to the go-down of the importing country against any risk of loss. The risks of loss associated with
other means of transportation such as railways, roadways and others, warehouses, ports of both the countries and
others are included and covered under marine insurance.
6. Jettison
Jettison means throwing overboard a part of cargo or any other goods in order to reduce the weight in the ship.
Some of the cargo is deliberately thrown away with the object of preventing the ship from further damage. Loss
caused by this method is one kind of marine risk and it can be covered under the marine insurance policy.