Sales turnover policy (STOP) is a highly evolved marine insurance cover. Thus, it is suitable for industries where multiple internal transits require to produce/manufacture the final product for sale. Instead of covering a particular type of transit, this policy covers all internal transits including :
1. Domestic purchase of raw material and consumables
3. Inter-factory, inter-warehouse, or inter-depot transfer
4. To & fro job work movements
5. Domestic sales
6. Exports, etc.
Additional Read: Marine Hazards Every Exporter & Importer Should Worry About
Clients take STOP with a sum insured equal to the expected annual sales turnover of the company. Therefore, Premium is charged based on sales turnover declaration submitted by the client at periodic intervals. In case the sum insured covered in the policy does not fully utilize/consume, the client can seek a refund of the premium from the insurer for the un-utilized amount.
A list of few benefits of the sales turnover policy are below:
1. Saving in premium –
As the sales turnover policy covers multiple legs of transit under one umbrella policy, it leads to sizable premium savings which the insured would have otherwise incurred to cover each leg individually.
2. Policy administration –
Maintaining and managing all marine insurance risks under one policy is convenient as well as seamless for the insured.
3. Flexibility in submitting declaration –
In fact, most insurers allow the flexibility to clients to follow their preferred timeline for submitting periodic turnover declarations. Insured can submit declaration anytime before 15th day of the following month which allows him/her the desired flexibility to co-ordinate internally for data collection.
4. Intermediate storage cover –
Insurers are flexible to cover intermediate storage of goods in transit up to a defined number of days within, the sales turnover policy. However, obviates the requirement of a separate policy cover for intermediate storage.
5. Premium payment terms –
Since the sales turnover policy is consumption-based, insurers are flexible to offer clients attractive payment options – quarterly or half-yearly premium payment instead of upfront payment. Hence, flexibility helps clients to manage cash flow better.