Marine Insurance

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A Blanket Policy in Marine insurance is a type of insurance policy that provides coverage for a wide range of marine-related risks. It is typically used by businesses that are involved in shipping, transportation, and other activities that involve the use of ships, boats, or other watercraft.
The marine blanket policy covers a variety of risks, including damage to the vessel or cargo, liability for injury or damage caused to others, and losses resulting from natural disasters such as storms or hurricanes. It may also provide coverage for loss of income due to interruptions in business operations caused by covered events. Another advantage of a blanket policy in marine insurance is that it simplifies the insurance process, as all marine-related risks are covered under a single policy. This can save time and money compared to purchasing multiple policies for each individual risk.
However, it is important to carefully review the coverage limits and exclusions of a marine blanket policy to ensure that all risks are adequately covered. Some policies may have exclusions for certain types of cargo or vessels or may have limits on coverage for certain types of losses.

How Blanket Insurance Policy Works

A Blanket Insurance Policy is designed to cover multiple assets or properties under a single policy. The policyholder needs to determine the types of assets they want to include in the policy and the total coverage limit they require. This will depend on the nature of their business and the value of their assets. Once the coverage needs are determined, the insurance company will set a premium for the policy based on the total value of the assets to be covered. The policy will provide coverage for all assets listed under the policy collectively, up to the predetermined limit. This means that if one or more assets suffer a covered loss or damage, the policy will pay out up to the limit, rather than having to file separate claims for each asset. In the event of a loss or damage, the policyholder must file a claim with the insurance company. The claims process for a blanket policy is typically straightforward since all assets are covered under a single policy. The blanket insurance policyholder only needs to provide documentation for the damaged or lost assets. The blanket policy must be renewed periodically, typically on an annual basis, to maintain coverage for the assets.
Overall, a blanket policy simplifies the insurance process for businesses by consolidating coverage for multiple assets under a single policy. This can save time and money compared to managing separate policies for each asset. However, it is important to review the coverage limits and exclusions carefully to ensure that all assets are adequately protected.

Who Needs Blanket Insurance Policy

Blanket Insurance Policy is suitable for a wide range of businesses and organizations that own multiple assets or properties that are difficult or impractical to insure separately. This includes businesses in the real estate industry, transportation and logistics, manufacturing, hospitality, and healthcare.
Real estate businesses that own multiple properties, such as apartment buildings or commercial buildings, can benefit from a blanket policy to cover all their properties under a single policy. Transportation and logistics companies that own a fleet of vehicles or ships can use a blanket insurance policy to cover all their assets against risks such as accidents, theft, and natural disasters. Manufacturing businesses that have numerous pieces of equipment or machinery can use a blanket policy to cover all their equipment against breakdowns, damage, or theft. Hospitality businesses such as hotels, resorts, and restaurants can use a blanket policy to cover all their assets, including buildings, equipment, and inventory. Overall, any business that has multiple assets that are difficult to insure separately can benefit from a blanket policy to simplify the insurance process and save money on premiums.

What is a blanket policy in marine insurance?

A blanket policy in marine insurance is the most comprehensive type of marine insurance policy available today. In simple terms, blanket insurance policies cover many things in one policy. This could be multiple items in one place, one item in different places, or many items in many places.

In marine insurance, a blanket policy pays for the maximum possible protection coverage. Here, the insurance company collects the entire premium amount at the time of granting the policy. In fact, there is a readjustment of the premium at a later point in time. It is at the end of the policy term as per the actual amount of risk borne during the course of the policy term.

If the actual risk coverage provided by the policy is lower than the insured amount, the insurer refunds the excess premium to the insured party at the policy’s end. However, if the total shipments are greater than the insured amount, then the insurance company charges the policyholder for extra protection.

What are the features of a blanket policy in marine insurance?

  • An open-cover marine insurance policy is another term used for a blanket policy in marine insurance. Policyholders who purchase blanket policies are usually businesses that deal in high-volume trading over long periods. These businesses have substantial import-export transactions.
  • The advantage of the blanket policy in marine insurance is that the firms do not have to make or purchase separate insurance agreements with every new shipment or transaction. There is no need for the firm and the insurance company to keep negotiating terms, rates, and conditions for every new shipment. Instead, the blanket policy here covers multiple shipments and transactions within a given period.
  • With a blanket policy, the insurance company and the insured party agree on several aspects of insurance, such as the risk coverage, goods insured, the voyages, the coverage rates, the packing conditions, and more. If there is a need, the insured party can make an insurance claim based on these agreed-upon conditions.
  • The validity period for blanket policies in marine insurance usually lasts for 12 months.
  • The policyholder may cancel their blanket policy by issuing a written notice to the insurance company any time before 30 days of the cancellation of the cover.

Additional features in Blanket Marine Policy :

Here, the insurance company honours and accepts all the declarations the insured party makes regarding cargo and ships.

  • The insurance company and the policyholder may consider a blanket policy as a longer-term contract. As a result, the policyholder may enjoy lower premiums than other policy types because the insurance company does not have to undertake administrative tasks that other policy types may require.
  • The insured party declares every shipment that comes under the scope of the insurance agreement to the insurance company.
  • The insured party maintains a sufficient balance in a cash deposit account for the blanket policy.
  • This makes sure that each shipment has enough coverage. Even if the policy certificate is sent later, the insurance company already has the details.
  • There are two main limitation clauses associated with blanket policy in marine insurance. These are— ‘per bottom’ and ‘per location. As per these clauses, the insurance company’s liability is only up to the agreed-upon amount. So, in case there is an accident in which there are losses and damages that exceed the agreed-upon amount.
  • The insurance company will only make a settlement for the previously agreed-upon amount and nothing more than that. The insured party cannot expect to receive more compensation for their losses than that amount.

What are the benefits of a blanket policy in marine insurance?

  • The insurer provides comprehensive coverage to the insured party for all goods transported over an extended period.
  • The policyholder and the insurance company do not need to undertake negotiations for new shipments. So there is less wastage of time and expenses.
  • There is a strong possibility for lower premiums with a blanket policy in marine insurance.
  • The insured party benefits from peace of mind of knowing that their goods have insurance coverage for an extended period.
  • This policy protects the insured party from multiple risks, which could otherwise result in significant expenses. Insurance coverage offers much protection from such risks.
  • Accidents may happen even at sea. While accidents are unavoidable, this policy shields the insured party from liabilities should they cause an accident.

    The bottom line

In simple terms, blanket marine insurance policy can cover policyholders for lots of shipments and risks over a long time. They don’t need new policies for each shipment. This allows businesses to conduct continuous business without any interruptions.

About The Author

Simran

MBA Insurance and Risk

With extensive experience in the insurance industry, Simran is a seasoned writer specializing in articles on marine insurance for SecureNow. Drawing from 5 years of expertise in the field, she possesses a comprehensive understanding of the complexities and nuances of marine insurance policies. Her articles offer valuable insights into various aspects of marine insurance, including cargo protection, hull insurance, and liability coverage for marine-related risks. Renowned for their insightful analysis and informative content, Simran is committed to providing readers with actionable information that helps them navigate the intricacies of marine insurance with confidence.

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