Notes on several descriptions of policies which are in use for marine insurance

Several descriptions of policies are in use for marine insurance, differing from one another, not in the substantial form of the document, but as to certain particular conditions, which may be classed under the following heads:

(а) The sum insured.

(б) The vessel on which the insured interest is placed.

(c) The duration of the risk.

Open and Valued Policies.-

As regards the sum insured, a policy may be either open or valued.

A policy is called open when it does not state the value of the subject matter of the insurance, which, in case of loss, either partial or total, must therefore be proved ; valued, when such value is specified, and the insured is therefore entitled to recover, in case of total loss, the full sum covered by the policy.

It is only on this point that the valued differs from the open policy, as, in case of a partial loss, the same inquiry is necessary, no matter whether the insurance is effected through an open or a valued policy.

Floating and Named Policies-

As regards the vessel on which the insured interest is placed, poli­cies are either floating ox named. They are called floating when the ship’s name is not mentioned therein; named or special when it is.

The floating policy is purposely intended to effect insurance on goods to be shipped from a distant port, the insurer not knowing as yet the name of the ship or ships which will convey them.

The name of such ship or ships must, however, be stated afterwards, and within certain limits of time, by special declarations. When the whole sum insured is thus accounted for, the policy is said to be fully declared, or written off.

When both the sum and the ship are specified in the policy, the document is also called named or special, and it is also called open when neither the one nor the other is stated therein.

Voyage and Time Policies.-

As regards the dura­tion of the risk insured, there are voyage and time policies. The former embody such insurances as are effected for a particular voyage, the duration of the risk being limited between the date of the ship’s sailing and that of her arrival.

The latter, on the con­trary, which may be effected only on hull, cover any risk for a specified period, irrespective of the number of voyages the vessel can make. Such a period can­not, however, be longer than twelve months.

Difference in the Wording.-

Each of these descrip­tions of policies is distinguished by a peculiar clause.

Thus, in an open policy the blank in the printed form after the words : the said ship, etc., goods and merchandise, etc., for so much as concerns the assured, by agreement between the assured and assurers in this policy, are and shall be valued at … . – will be filled up with the particulars of the subject insured, as:

100 bags of Rio Coffee ^R/_F 1-100.

or any other more or less specified indication.

The same blank in a valued policy will be filled up with both the particulars of the subject insured and the value attached to it, as : .

100 bags Rio Coffee ^R/f 1-100, valued at £1,000.

In the case of a floating policy the ship’s name is not mentioned, as the policy would then be named or special, and the words: on any ship or ships, or: on goods per ship or ships to be hereafter declared, are inserted in its stead.

The peculiarity of time and voyage policies consists only in the so-called termini of the risk.

In the former, which, as already said, is used only for insurances on hull, the termini are represented by two dates, as: from noon of the 1st January, 1890 till noon of the 1st January, 1891, while in the latter______ generally used for merchandise-the termini are represented by the name of the port of sailing and that of the port of destination, as : from Genoa to Liverpool.

It is worthy of remark that a slight difference in this clause, on a voyage policy, may convey a substantial difference in the risk. Thus the form: from Genoa to Liverpool, means that the insurance is to begin only from the ship’s sailing from Genoa, till her arrival at Liverpool; while by saying: at and from Genoa to Liverpool, it is declared that the goods are covered by insurance both when afloat in the port of Genoa and while sailing.

Under both such clauses, however, there is no risk covered unless the goods be on board the ship, nor is the underwriter liable to any indemnity towards the insured should they be lost while afloat in lighters, boat or any other kind of conveyance from terra firma to the ship.

To remedy this, the clause: including risk of craft, is often added. Most policies, however, bear the clause: from shore to shore; by which all misunder­standing is avoided, as it declares the goods to be insured from their leaving terra firma at port of loading till they are safely landed at port of destina­tion.