Voyage Policy
A voyage policy is marine insurance coverage for risks to a ship's cargo during a specific voyage. The policyholder may need to purchase additional insurance to cover the cargo during the entire transport process as voyage policies typically exclude losses that occur during the loading and unloading of the cargo. A voyage policy is marine insurance coverage for risks to a ship's cargo during a specific voyage. A voyage policy is in effect only while the ship is at sea; additional insurance is needed to cover losses during loading and unloading of cargo. A voyage policy, or marine cargo insurance, covers losses incurred to a ship's contents during a journey.
What Is a Voyage Policy?
A voyage policy is marine insurance coverage for risks to a ship's cargo during a specific voyage. Unlike most insurance policies it is not time-based but expires when the ship arrives at its destination. It covers only the cargo, not the ship that carries it.
A voyage policy is also known as marine cargo insurance.
Understanding a Voyage Policy
Voyage policies are commonly used by exporters who need marine shipping only occasionally or for relatively small amounts of cargo. Large exporters who ship by sea routinely tend to prefer open cover marine insurance, which covers all cargo shipped by the policyholder for a specified time period.
A voyage policy is in effect only while the ship is at sea; additional insurance is needed to cover losses during loading and unloading of cargo.
A voyage policy covers unforeseen risks but not preventable risks. For a voyage policy to be valid, the vessel transporting the cargo must be in good condition and capable of making the journey, and the vessel's crew must be competent.
Voyage policies generally cover against accidental damage and collisions as well as natural disasters. Losses due to delays may be covered as well. Voyage policies may specifically exclude losses caused by willful misconduct, ordinary leakage, ordinary wear and tear, improper or inadequate packaging, and labor strikes. Acts of war and terrorist activity also are usually excluded.
The policyholder may need to purchase additional insurance to cover the cargo during the entire transport process as voyage policies typically exclude losses that occur during the loading and unloading of the cargo.
The policy is in place for the duration of the voyage, however long it takes. If there are unanticipated delays en route, the coverage remains in place. This allows for factors such as inclement weather at sea or a shortage of docking at the destination port.
Because each policy is specific to a particular cargo and voyage, all details of both are recorded in the policy contract.
Related terms:
Bumbershoot Policy
A Bumbershoot policy is a specialized form of umbrella liability insurance that covers nonmarine and maritime liability exposures. read more
Cost and Freight (CFR)
Cost and freight (CFR) obligates a seller to arrange sea transportation and provide the buyer the needed documents to retrieve the goods upon arrival. read more
Cost, Insurance, and Freight (CIF)
Cost, insurance, and freight (CIF) is a method of exporting goods where the seller pays expenses until the product is completely loaded on a ship. read more
Export
Exports are those products or services that are made in one country but purchased and consumed in another country. read more
Ex Works (EXW)
Ex works (EXW) is a shipping arrangement in international trade where a seller makes goods available to a buyer, who then pays for transport costs. read more
Free Alongside Ship (FAS)
Free alongside ship (FAS) is a contractual term in the export trade that obligates a seller to deliver to a port and next to a designated vessel. read more
Insurance Coverage
Insurance coverage is the amount of risk or liability covered for an individual or entity by way of insurance services. read more
Mergers and Acquisitions (M&A)
Mergers and acquisitions (M&A) refers to the consolidation of companies or assets through various types of financial transactions. read more
Open Cover
Open cover is a type of marine insurance policy in which the insurer agrees to provide coverage for all cargo shipped during the policy period. read more