Answer
Types of Policies- As per MIA 1963-
1.Voyage Policy- Generally taken for the Cargo, it covers particular Voyage from port of departure to port of destination.
2.Time Policy- When the policy issued for a particular time period, generally for a year but maybe extended to let the vessel complete her Voyage.
3.Mixed Policy- It is a mixture of Time and Voyage Policies.
4.Floating Policy- It is a single insurance policy that covers multiple shipments without requiring separate policies for each shipment. When a person ships goods in a particular geographical area, it becomes a hassle for him to buy policy each time, hence he buys a policy for a lump-sum amount without mentioning the value of goods or the name of the ship. Whenever he ships goods, a declaration is made about the particulars of the goods and the name of the ship. The Insurer will make an entry in the policy and the amount of policy will reduce to that extent for as much risk coverage as required. The declaration by the insured is a must.
5.Construction Policy- Insures the vessel for the time period of keel laying to the vessel delivery including sea trials.
Types of Insurance Cover by Shipowner for new vessel-
1.During Shipbuilding- from keel laying to delivery including seatrials - > Builder’s Risk Insurance
| During construction until delivery; normally arranged by the shipyard depending on the shipbuilding contract |
2.During Operational/ Commercial life of a vessel:
“As a shipowner, before putting my newly purchased vessel into commercial service, I would primarily arrange H&M, P&I and War Risk insurance. I would then ensure all statutory financial-security certificates applicable to the ship under Bunkers Convention, CLC where applicable, Nairobi Wreck Removal Convention, MLC and, for passenger ships, Athens Convention.”
|
Insurance |
What it covers |
|
Hull & Machinery (H&M) |
Physical loss/damage to hull, machinery and equipment due to insured marine perils |
|
Protection & Indemnity (P&I) |
Third-party liabilities: crew injury/death, pollution, cargo liability, collision liabilities, wreck removal, fines, stowaways, etc., subject to Club Rules |
|
War Risks |
War, terrorism, hostile acts, mines, capture/seizure and related excluded war risks |
|
Freight Insurance |
Protects the shipowner's freight earnings where freight is at risk |
|
Loss of Hire (LOH) |
Loss of income when the vessel is off-hire following an insured casualty |
|
FD&D – Freight, Demurrage & Defence |
Legal costs arising from charterparty, demurrage, bunker, contractual and other shipping disputes |
|
Kidnap & Ransom (K&R) |
Kidnapping, detention and ransom-related risks, particularly for designated high-risk trading areas |
3.During final Voyage for scrapping/ recycling -> Break up Voyage Insurance like DAR policy.
The value of a ship is very high and owner cannot afford to bear the loss. So he takes up the above mentioned Insurance to cover his risks from cradle to grave of his ship.