Explain Sales Turnover Policy and Its Various Advantages

One of the most important insurance policies available in the market for businesses involved in the transit of goods, is a marine insurance policy. It is a mandatory requirement in many international import-export trade proceedings. Since various businesses require marine insurance to cover different kinds of risks, this insurance policy is available in different types. One type of marine insurance policy is the marine sales turnover policy. In the article below, we shall learn more about this and its advantages in detail.

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Marine Sales Turnover Policy

This policy is usually referred to as STOP, is an adaptable, customizable, and flexible type of transit insurance. Unlike other marine open policies which cover the value of goods, this policy covers a company’s sales turnover. This means, that in this policy, the company gets coverage for all the transits that are needed to achieve sales. In STOP, the policyholder (the company) is not required to declare every single consignment movement, instead, they need to submit the sales turnover figures. The policy not only saves the policyholder from frequent and excessive documentation but also results in huge premium savings. The premium is charged based on the sales turnover. Additionally, these premiums can be paid in quarterly and half-yearly installments.

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Advantages of Sales Turnover Policy

Any entity whether importer, exporter, manufacturer etc. involved in the sale and purchase of goods should consider buying this policy. The advantages of this policy are numerous. Let’s have a look at them.

  • Seamless cover on a worldwide basis
  • Highly customizable policy based on business needs
  • Highly competitive premiums
  • Multiple premium payment options, that is, quarterly/ half-yearly/yearly
  • Hassle-free with less documentation, that is, no need to submit a periodic declaration of movements. Monthly or quarterly sales figures need to be submitted.
  • Coverage of import and export of goods
  • Additional coverage like intermediate storage cover can be added to the policy

Marine Sales Turnover Policy: Coverage

A marine sales turnover policy is a type of cargo insurance that provides the following coverage:

  • Domestic purchase of raw materials, consumables etc.
  • Imports and customs duty
  • Inter-depot, Inter-factory, and Inter-warehouse transfer
  • Domestic sales of finished goods
  • Export sales (FOB/CIF)
  • Temporary storage cover at intermediate locations
  • Protection against losses occurring due to theft, damage in transit, piracy attacks, loading or unloading.

Marine Sales Turnover Policy: Common Exclusions

A typical STOP does not cover damage or loss to cargo resulting due to:

  • Deliberate damage done to cargo or any act of willful misconduct
  • Unsuitable packing or insufficient safety precautions
  • Regular wear and tear, leakage, loss in weight or volume etc. while in transit
  • Delays caused due to unsuitable weather conditions, detention at customs etc.
  • Vessel that is not in a good condition, or not reasonably fit to encounter the perils of the sea.

Conclusion

Businesses with high sales turnover should consider buying a sales turnover policy as it is a customizable and highly flexible marine insurance policy. The advantages of this policy are unparallel which not only covers the sales turnover but also covers imports, exports, purchases, returns, loading, unloading etc.

Written By: PolicyBazaar - Updated: 28 December 2022