Sales turnover policy and marine open policy both play a vital role as marine insurance policy plans in providing insurance coverage to businesses. Understanding the differences between these two policies helps businesses ensure they obtain the most ideal insurance coverage based on their financial objectives. This includes careful assessment of policy-specific requirements and risk exposures before deciding on a marine open policy.
While Sales turnover policy plans tend to focus primarily on risks related to sales operations, marine open policy plans, on the other hand, focus on coverage against damage during transit and marine-related risks.
Sales turnover policy marine insurance and marine open policy are both valuable insurance coverage options for businesses engaging in international trade and transportation. While they both provide coverage against various risks, they differ significantly in terms of certain aspects. Here are some of the key differences between the Marine Open Policy Vs Sales Turnover Policy:
| Parameters | Marine Sales Turnover Policy | Marine Open Policy |
|---|---|---|
| Coverage | Marine Sales Turnover Policy provides businesses with a comprehensive solution by offering coverage for a wide range of transit incidents. This includes not only exports and imports but also domestic transits, internal transport return transits and job works. Encompassing various types of transits under a single policy allows for the simplification of insurance management for businesses. This ensures that all their transit needs are adequately covered without the hassle of maintaining multiple policies. | The Marine Open Policy is specifically tailored for businesses that engage in frequent shipping activities over an extended period. It focuses solely on multiple shipments over 12 months. This policy structure is ideal for businesses with regular shipping needs as well as businesses that deal with precious cargo. It provides comprehensive coverage against marine-related risks for all shipments made within the defined policy period. This policy generally lasts up to a year. |
| Premium Charges | Premium charges for a Sales turnover policy marine insurance are determined based on the annual sales value of the organisation. This approach offers predictability for businesses which lets them estimate their yearly earnings and plan their budgets accordingly. Since the premium is calculated on the entire turnover of the business, it provides comprehensive coverage for various types of transits. These include exports, imports, domestic transits, internal transport return transits and job works. | Premium charges for a Marine Open Policy are paid upfront based on the anticipated sum insured. This sum insured is determined by the expected value of the cargo shipments to be covered during the policy period. Depending on the declared shipments, adjustments are made to the sum insured throughout the coverage period. |
| Operational Processes | Operational processes under a Sales turnover policy marine insurance are relatively straightforward in nature. Businesses are only required to declare their sales transits during the policy’s validity period. Monthly declarations or replenishments are generally only necessary if some significant changes occur in the business activities. This streamlined approach simplifies insurance management for businesses. This allows them to focus on their core operations without the burden of frequent reporting requirements. | Operational processes under a Sales turnover policy marine insurance are relatively straightforward in nature. Businesses are only required to declare their sales transits during the policy’s validity period. Monthly declarations or replenishments are generally only necessary if some significant changes occur in the business activities. This streamlined approach simplifies insurance management for businesses. This allows them to focus on their core operations without the burden of frequent reporting requirements. |
| Examples | Suppose there is a manufacturing firm that specialises in the production and procurement of electronic raw materials from overseas supplies. This firm also distributes finished products domestically and internationally. In this scenario, opting for a Sales turnover policy marine insurance will offer several benefits to the firm. First, the firm gets to enjoy the simplification of insurance management as all transit types are covered under a single comprehensive policy. Second, the firm enjoys the benefit of cost efficiency, with premiums being based solely on the organisation’s annual turnover rather than individual transits. | Suppose there is a manufacturing firm that specialises in the production and procurement of electronic raw materials from overseas supplies. This firm also distributes finished products domestically and internationally. In this scenario, opting for a Marine Open Policy will offer several benefits to the firm’s shipment activities. It is the ideal policy choice for frequent shipment activities. This policy will focus solely on multiple shipments over 12 months. Although premiums are paid upfront based on the anticipated sum insured, the policy allows adjustments throughout the coverage period based on declared shipments. However, it demands meticulous monthly declarations to maintain continuous coverage, which adds complexity to the operational processes. |