The following documents are generally used in marine insurance.
The proposal form is called declaration in marine insurance. The proposal form is not compulsory, but in the case of exports/imports declaration is required to be submitted by the client.
Imports: For imports, the importer has to give the declaration that under term of purchase he is required to take insurance (FOB etc. imports) hence he is taking insurance and that he undertakes to get his import license debited by the price of imports as well as the insurance premium, if he is importing under import license.
Exports: For exports, the exporter has to give the declaration that under the terms of sell he is required to take insurance (export on CIF etc. terms) that is why he is taking the insurance and that he undertakes to bring the full price and insurance premium in foreign currency in an approved manner.
Declaration form contains the name of insured; all the particulars of shipments, the type of cover required and special instructions to the insurer if any.
B) Cover note:
In declaration form, all the particulars of shipments are to be given, but as per Indian practice, the insurance is to be arranged in advance, before the commencement of transit, so the details of shipment cannot be given and such the insurers cannot issue the policy/certificate of insurance. To confirm the arrangement of cover, insurers sometimes issue cover note. The cover note is an interim document issued pending final policy. It is also called interim protection note. It contains general particulars of insurance.
C) Policy of insurance:
When all the particulars of shipment are furnished to the insurers, they issue a policy. Under section 25 of Marine Insurance Act, the policy of insurance should contain minimum five (5) things-
- The name of the insured
- Subject matter insured
- The voyage
- The sum insured
- The name of insurer
D) Certificate of Insurance:
It is equivalent to policy. The difference is only the form – it is one-page document and does not contain all the terms and conditions by physical attachments they are just referred. Certificates are issued under open policy / open cover.
The endorsements are issued when any correction is required in the policy/certificate like when the sum insured is increased; the name of the vessel is changed etc. It is also called correction slip. This endorsement is a document issued by the insurers.