If you are looking to buy a marine insurance policy, here are the steps that you need to take:
- Choose the Marine Insurance Cover
- Select your Broker or Insurance Company. A broker can provide you with multiple insurer options and also help to customize the available options to suit your needs and budget
- Fill out the Marine Declaration Form
- Assess the Risk
- Pay the Premium
- Receive the Cover Note
- Receive the Marine Policy
Let’s look into the buying procedure of Marine insurance in detail:
1. Choose between a Broker or Insurance Company:
After choosing a suitable marine insurance cover or policy, it is essential to decide whom you should approach for the policy. As the world of corporate insurance is tricky. However, it is always good to take the help of corporate insurance advisors to ease your work. The broker, who possesses specialized knowledge about various insurance policies would provide you with all the important information to take out a marine insurance policy without delay. The broker would not only help in buying this policy but would also help in case of claim settlement.
2. Choose the Marine Insurance Company:
There are various insurance companies in India, including both government and private, which offer marine insurance. Choosing the most appropriate insurer is essential. You can assess the coverages, claim settlement ratio, and cost of marine insurance to help you to decide on the company to go for.
3. Fill Marine Declaration Form:
Usually, a proposal form requires to submit to the marine insurance company to initiate the process. In the case of marine insurance, you would have to submit a marine declaration or requisition form to buy marine insurance. In fact, this form requires the proposer to submit all the details about the risk, like the items to ship, the name of the policyholder, the value of goods, the name of the carrying vessel, the place where the claim if any takes place, etc. If you are taking the help of an insurance advisor, you can submit your form to them to clearly review it and to ensure it’s in order. After that, they would pass on the form to the marine insurance company. Here, note that your marine coverage should include your cost of goods along with shipping expenses, plus, 10% or 15% added for anticipated profits.
4. Assessment of Risks:
Once the marine declaration form is received by the insurer, their officials would evaluate the risks. The risk insured must be present in the condition as stated in the declaration form. The officials, after ascertaining the risk involved, would decide the premium and the stamp fee the insured needs to pay.
5. Payment of Premium:
Once the insured submits the declaration form, the proposer is asked to pay the insurance premium as fixed by the marine insurance company. The premium paid needs to be in cash, cheque, or any other mode of payment as acceptable to the insurer.
6. Issuance of Cover Note:
Once the premium is paid, the insurance company would issue a cover note, which would be subject to the conditions as stated by the insurer in the policy document. The cover usually consists of details like the name of the insurance company, the sum insured, the name of the policyholder, the name of the vessel, ports of destination and departure, premium rate, etc.
7. Issuance of Marine Insurance Policy:
Finally, the insurer would prepare and issue a marine insurance policy that would have complete details about your policy. The same would be handed over to you.
Additional Read: What are the different types of Marine Policies Available in India?
Case Study
As K.M Engineering enjoys a wide client base across the world, the company did buy a marine insurance policy last year. As corporate insurance is a tricky area, the company availed the services of an insurance broker who suggested the right marine policy as per their business requirements.
Next, K.M Engineering filed a marine declaration form with details, including the name of the policyholder, the port of destination, the name of the carrying vessel, etc. Therefore, the company gave this form to its agent who later submitted it to the marine insurance company.
Additional Read: What is covered under Marine Cargo Insurance?
After receiving the marine declaration form, the insurer checked and evaluated the risks. After ascertaining the risks, the insurer decided engineering company to pay the rate of the premium, with the stamp fee.
Once the marine insurance company accepted the proposal form. K.M Engineering paid an insurance premium as decided by the insurer in the cheque. Thus, once the payment was received by the insurer, issued the engineering company a cover note which had all the necessary information on it including the name of the insurer & policyholder, sum insured, port of departure, etc.
Finally, the insurance company issued a marine insurance policy to K.M Engineering with complete details and stamps.
