Marine Sales Turnover Policy

IRDAI License Number: IRDAI/INT/ISNP/2022/250

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Introduction

Who can take this Policy?

Coverage

Add on Covers

Basis of Sum lnsured

Exclusions

Marine Sales Turnover Insurance Policy popularly called STOP is a distinguished product. It is an Open Policy in the real sense of the term. STOP covers transit of raw material, semi-finished & finished products pertains to insured's a trade which encompasses Export, Import, Inter Depot movement from originating point to a destination on a seamless basis.

Advantage of STOP

Sizeable saving in premium which is charged only on your sales turnover
Seamless cover with all movement of goods automatically covered
No hassles of submitting a periodical declaration of movements to the insurer. Only monthly sales figures need to be submitted
Intermediate storage cover is a built-in cover under the policy
The policy is adjusted on expiry on basis of audited sales turnover the figure of the insured and refund of premium is allowed if any

Any manufacturer/producer, distributor, exporter, Importer can buy the policy.

Imports + Customs Duty (Actual or Deemed/Contingent)
Domestic purchase of raw materials, consumables & stores
Any number of Inter-Factory/Inter-Depot/To & From job work movements
Exports
Domestic sales of finished goods
Temporary storage at intermediate locations like job work/C & F premises etc.

Add-ons under Marine Sales Turnover Policy are as follows :

Seal Intact Clause
FOB Clause
Repacking Clause
Conceal Damage Clause

Although each incoming & outgoing consignment is covered under STOP the salient feature of the policy is that expected annual Sales Turnover of the insured is taken as sum insured of the policy and premium is charged only on this figure. The insured should opt for the sum insured based on fair projection of sales figures as short fall in premium will result in lapsing of policy.

Exclusion under Marine Sales Turnover Policy are as follows:

Loss or damage due to Inherent Vice
Loss or damage due to Delay
Loss or damage due to Insufficiency of packing
Loss or damage due to insolvency, financial default of ship owners etc.

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Important Points to remember while Buying the Policy

Adequate Sum Insured - To Avoid Underinsurance

Ensure that actual turnover should not exceed the insurance turnover

Client has to ensure that actual turnover should not exceed the turnover mentioned in policy at any point of time during the policy period. If such circumstance arises then it should be communicated to the insurance company on priority.

Ensure that assets should be covered under the right entity/company

Sum Insured should not be exhausted

There should be properly monitoring that available balance sum insured should not be less than the consignment at any point of time during the whole policy period.

Risk Location/s should be properly mentioned

Per Sending and Per Location limits should be on higher side

Keep these limits on higher side as per the requirement of you consignment sending pattern.

Downloads

Proposal Form

Policy Wordings

Claim Form

Key Documents

General Claim
Intimation Format

Immediate Action Client
Should Take

Indicative General Documents
for Settlement of Claims

Immediate Action Client Should Take

Intimate the Transporter

Make a note of the loss on the L.R./POD. Get the same signed by the driver / the deliveryman. Do not give a clean receipt under any circumstances. All the material received has to be inspected at the time of delivery. In case the entire consignment cannot be inspected at the time of delivery make the following note on the L.R./P.O.D. Received subject to verification.
Send an intimation letter to the courier/transporter informing them of the loss, as per Annexure I within 24 hrs of the loss. Send the letter by Registered A.D. Keep a photocopy of the A.D. card and postal receipt.
Send a recovery letter to the courier/transporter raising a claim for the loss within 24 hrs of the loss describing the nature, its quantum and the financial implication of the loss. Send the letter by Registered A.D. Keep a photocopy of the A.D. card and the postal receipt.
Arrange to get the shortage/damage certificate from the courier/transporter.

Survey of the Loss

The surveyors deputed by the insurer will call upon the insured to inspect the loss.

Please keep the following documents handy when the surveyor visits:

A. Copy of the intimation letter sent to the insurance company.

B. Invoice Copy

C. Packing List

D. GR Copy

E. Copy of FIR incase lodged. FIR will be lodged by the transporter / courier in case of theft of goods, damage to goods due to rioting, damage to goods due to a major road accident etc.

F. Shortage / Breakage certificate, if received from the courier / transporter.

G. Copy of the intimation letter sent to the courier / transporter as described above and a copy of the A.D. card with postal receipt, if the original A.D. has not returned back.

H. Copy of the recovery letter sent to the courier / transporter and a copy of the A.D. card with postal receipt, if the original A.D. has not returned back.

A claim form has to be filled with the description of the loss and its quantum Estimate of loss.
The surveyor will submit his report to the insurer.
In case any document is taken by the surveyor in original get the same acknowledged from him.
Send all the documents mentioned above, in original, to Epoch to file the claim on the insurer.

Indicative General Documents for Settlement of Claim

Ocean Transit

Claim Form duly filled in & signed
Original Policy /Certificate
Short Landing Certificate /Landed But Missing Cargo/Damage Certificate (as applicable)
Suppliers Invoice
Packing List
Quadruplicate copy of Bill of Entry
Steamer Survey report in original. (if arranged)
Copy of Claim Notice served on Carrier/Port authorities along with postal acknowledgment card
Copy of correspondence with the carrier/Port authorities/Customs authorities
Copies of Correspondence exchanged with the suppliers (reply from suppliers is a must) in connection with short packing (if applicable)
Lost Overboard Certificate from the Port Trust countersigned by the master of the vessel or steamer agents (in respect of Loss Over Board /Sling Losses)
Original Repair Bills with receipt/Proforma Invoice for value of item lost/damaged
Copy of Application filed with Customs for refund of Duty (if applicable)
Photographs if arranged
Letter of Subrogation cum special power of Attorney

Inland Transit (Rail)

Claim Form duly filled in & signed
Original Policy /Certificate
Open delivery Certificate or copy of application for open delivery, Reply received from the Railways refusing open delivery, Copy of the letter of protest sent to Railways with the acknowledgment thereto and certified extract of the remarks made in the station delivery or complaints book
Suppliers Invoice
Packing List
Copy of Claim Notice served on Railway along with postal acknowledgment card
Copy of correspondence with the Railways
Copies of Correspondence exchanged with the suppliers (reply from suppliers is a must) in connection with short packing (if applicable)
Original Railway Receipt
Original Repair Bills with receipt/Proforma Invoice for value of items lost/damaged
Photographs if arranged
Letter of Subrogation cum special power of Attorney

Inland Transit (Road)

Claim Form duly filled in & signed
Original Policy /Certificate
Original Open delivery certificate or copy of notice given to carriers advising about survey, protest made to them (for Packages delivered apparently in damaged condition)
Suppliers Invoice
Packing list
Copy of Claim Notice served on carriers along with postal acknowledgment card
Copy of correspondence exchanged with the carriers
Copies of correspondence exchanged with the suppliers (reply from suppliers is a must) in connection with short packing (for short receipt claims)
Original Non Delivery Certificate (for Non Delivery Claims)
Original Repair Bills with receipt / program invoice for value of items lost/damaged
Photographs if arranged
Letter of Subrogation cum Special Power of Attorney

Air Transit

Claim Form duly filled in & signed
Original Policy /Certificate
Original Airway Bill
Quadruplicate copy of bill of Entry
Suppliers Invoice
Packing list
Copy of Claim Notice served on carriers along with postal acknowledgment card
Copy of correspondence exchanged with the carriers
Copies of correspondence exchanged with the suppliers (reply from suppliers is a must) in connection with short packing (for short receipt claims).
Original Non Delivery Certificate (for Non Delivery Claims)
Original Short Delivery Certificate (for Short Delivery Claims)
Copy of application filed with Customs for refund of Duty
Original Repair Bills with receipt / program invoice for value of items lost/damaged
Photographs if arranged
Letter of Subrogation cum Special Power of Attorney

Postal Transit

Claim Form duly filled in & signed
Original Policy /Certificate
Original Post Parcel Receipt
Suppliers Invoice
Copy of Claim Notice served on Postal Authorities along with postal acknowledgment card
Copy of correspondence exchanged with the Postal authorities
Original Non Delivery Certificate (for Non Delivery Claims)
Original Short Delivery Certificate (for Short Delivery Claims)
Original certificate of damage /loss issued by the postal authorities (for Shortage/Damage Claims)
Letter of Subrogation cum Special Power of Attorney

Our Insurance Partners

Claim Case Study - 1

Situation

A client trading in high quality paper had a consignment of raw material badly damaged by heavy rain.

Challenge

It was found on discussing with the surveyors that the proper covering on the truck was not maintained. It would have adversely effected the claim.

Solution

We convinced the insurance company that this was one solitary instance and otherwise the tarpaulin covering was always adequately done. The claim was paid accordingly.

Advisory/Conclusion

It was made very clear to the client that the right kind of transporters should be used so that such occurrences do not recur.

Claim Case Study - 2

Situation

Client deals in solar module. The module efficiency decreases if it falls due to micro cracks not apparent from external appearance.

Challenge

Since testing had to be done on large number of sample modules, the cost of which was high. The cost of disposal latter was also extremely high. It was opined by the surveyor that both this costs will have to be borne by the insured.

Solution

We were able to Negotiate strongly with the surveyor that this cost testing and salvage was necessary for both the sites. It was eventually agreed that 50% of these costs will be paid to the insured.

Advisory/Conclusion

Claim Preparation and Salvage Disposal add-on was advised to be taken in the policy.

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FAQ's

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How the premium rate of STOP is arrived at?

The premium rate is arrived at considering the total number of transits taking place including the inward outward movement and the rate is applied on the Annual sales turnover.
Is there any minimum rate for Marine STOP Policy?

Yes, as per the recent guideline there is a minimum rate to be charged for Marine STOP Policies or if the claims in last 3 years is below 70% then expiring rate would be charged.
Is there any minimum sum insured required to offer Marine STOP Policy?

Yes, as per the recent guideline the minimum sum insured required is 100 Crores.
Can premium be refunded if Sum Insured is not exhausted in Marine STOP policy?

Yes, it can be refunded subject to favorable loss ratio.

What transit insurance coverage is available with a STOP?

The Marine Sales Turnover Policy (STOP) provides you Transit insurance coverage on the following:
Domestic Purchase and SalesA Marine Sales Turnover Policy covers all kinds of domestic purchases including raw materials and consumables. This also includes returns, loading, unloading, intermittent storage, movement of goods from factory to depots or warehouses and domestic sales of finished goods and products.
Imports and ExportsA Marine Sales Turnover Policy covers all imports, custom duty and all exports. (FOB/CIF).
Theft and PiracyThe Marine Sales Turnover Policy will protect your shipment from losses occurring due to theft, piracy attacks, damages in transit, loading or unloading.
What coverage a Sales Turnover Policy provides?

Imports + Customs Duty (Actual or Deemed/Contingent)
Domestic purchase of raw materials, consumables & stores
Any number of inter- factory/inter-depot/to & fro job worker movements
Exports (FOB/CIF)
Domestic sales of finished goods
Temporary storage cover at intermediate locations like Job workers / C & F premises etc.
What Add on covers are available with a STOP?

Inland transit policies can be extended to cover the following perils on payment of additional premium: 1. SRCC – Strike, riot and civil commotion (including terrorist act) 2. FOB – Where the inland transit is required to be extended to cover the goods till they are loaded on board the vessel , this extension can be taken.Export /Import policies can be extended to cover War and /or SRCC perils on payment of an additional premium.

How an insured can claim the losses under STOP Policy?

The following steps should be taken in event of a loss or damage to goods insured:
Take immediate steps to minimize loss.
1. Inform nearest office of the insurance company or claim settling agent mentioned on the policy.
2. In case of damage to goods whilst on ship or port , arrange for joint ship survey or port survey.
3. Lodge monetary claim with carrier within stipulated time period.
4. Submit duly assigned insurance policy/certificate along with the original invoice and other documents required to substantiate the claim such as:
Bill of Lading / AWB/GR
Packing list
Copies of correspondence exchanged with carriers.
Copy of notice served on carriers along with acknowledgment/receipt.
Shortage/Damage Certificate issued by carriers.
A survey fee is to be paid to the surveyor appointed by the insurance company. This fee will be reimbursed along with the claim if the claim is otherwise admissible.
How would you ensure a claim under STOP is not denied?

1. Ensure transparency in all sales records: Since premium for a marine sales turnover policy is based on the annual sales turnover of the enterprise, any fudging of data or records may lead to a claim denial. Ensure transparency in records to increase the ambit of STOP cover.
2.Submit monthly sales figure without fail: Unlike individual marine cargo insurance plans, STOP does not warrant submission of each movement or declaration of movements of goods every time. However ensure you are submitting monthly sales figure to the insurer without fail to ensure continues protection under STOP.
Can a claim under Sales return be covered in a Marine STOP Policy?

If Sales return Sum Insured is communicated to the insurer at the time of taking policy then it is covered with ITC-B/ICC-B.
Can a claim under inter factory/depot movement be covered in a Marine STOP Policy?

Claim under Inter Depot Movement can be covered in a Marine STOP Policy provide its description in mentioned in Sum Insured Bifurcation.

What is marine sales turnover policy?

Sales Turnover Policy is a highly flexible and customizable marine insurance cover. Instead of covering a particular type of transit, this policy can cover all the transits that are required to achieve sales. Hence the policy can cover: Domestic Purchase of raw material, consumable & stores.
Who should buy Sales Turnover Policy?

Any entity whether it’s a manufacturer, importer, exporter, etc. involved in purchase and sales of goods with a Sales Turnover of above 10Crore must have Sales Turnover Policy. By buying Sales Turnover Policy the entity will not have to buy specific marine insurance cover for the movement of its goods. The premium of Sales Turnover Policy is also very competitive when compared to Marine Specific Insurance cover. Entity need not declare each and every leg of goods movement but instead needs to file a Sales Declaration on monthly/quarterly basis for the same.
What are the advantages of Sales Turnover Policy?

Sales Turnover Policy has many advantages for sellers/manufacturers of goods/tangible products.
1. This policy covers Sales, Purchases & returns in a single policy.2. Premium in Sales Turnover Policy is very competitive.3. Premium can be paid quarterly/ half-yearly/ yearly.4. There is no need to declare each and every shipment. Monthly/Quarterly declarations are acceptable in this.5. Loading, Unloading, Intermittent storage of goods can be covered in this.6. Import and Export of goods are also covered in this.7. Policy covers value of goods, freight etc.