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What Is a Voyage Policy?
Let me explain what a voyage policy is: it's marine insurance that covers risks to a ship's cargo during a specific voyage. Unlike most insurance policies, this one isn't based on time but ends when the ship reaches its destination. Remember, it only covers the cargo, not the ship itself.
You might also hear it called marine cargo insurance.
Key Takeaways
- A voyage policy, or marine cargo insurance, covers losses to a ship's contents during a journey.
- It's mainly used by exporters who ship only occasionally or in small amounts of cargo.
- Exporters who ship routinely generally opt for open cover marine insurance.
Understanding a Voyage Policy
If you're an exporter who needs marine shipping only occasionally or for small cargo amounts, a voyage policy is what you should consider. Large exporters who ship by sea on a regular basis usually go for open cover marine insurance, which covers all their cargo shipments over a specified time period.
This policy covers unforeseen risks but not those that are preventable. For it to be valid, the vessel carrying the cargo must be in good condition and capable of the journey, and the crew must be competent.
Important Details
Keep in mind that a voyage policy is only in effect while the ship is at sea; you'll need additional insurance for losses during loading and unloading of cargo.
These policies generally cover accidental damage, collisions, and natural disasters. They might also cover losses from delays. However, they specifically exclude losses from willful misconduct, ordinary leakage, ordinary wear and tear, improper or inadequate packaging, and labor strikes. Acts of war and terrorist activity are usually not covered either.
You may have to buy extra insurance to protect the cargo throughout the entire transport process, since voyage policies typically don't cover losses during loading and unloading.
The policy stays in place for the whole voyage, no matter how long it takes. If there are unexpected delays, like bad weather or docking shortages, the coverage continues.
Since each policy is tailored to a specific cargo and voyage, all details are clearly recorded in the contract.
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