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Sales Turnover Policy

Protect your business's sales turnover with a comprehensive policy, ensuring coverage for all essential transactions.

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Coverage worth
50 Lakhs
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50+ years of collective insurance experience

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5,000 Cr+ of cumulative risks insured

What Is

Sales Turnover Policy?

A sales turnover policy (STOP) is a type of marine insurance in which a business is covered for all transits necessary to generate sales.

With STOP, the policyholder (the business) needs only to disclose sales turnover data, rather than declaring every individual consignment movement as is customary with other marine policies. This kind of coverage alleviates the task of managing an abundance of paperwork, concurrently offering policyholders notable savings on insurance premiums. The premium's magnitude is influenced by the sales volume. Policyholders are granted the flexibility to pay premiums either quarterly or semi-annually instead of on a monthly basis. If the sum insured under the policy isn't wholly utilized or consumed, the client possesses the prerogative to request a premium refund from the insurer. This policy is optimally suited for industries wherein the creation or manufacturing of the final product for sale mandates numerous internal transits.

Like other marine cargo insurance policies, a sales turnover policy provides coverage against various risks that cargo may encounter during transportation. The most frequently observed causes for cargo loss or damage during transit encompass explosions, fires, hijackings, collisions, accidents, and overturns.

Features of Sales Turnover Policy

  • Offers uninterrupted coverage on a global scale.
  • The policy can be tailored according to specific business needs.
  • Presents various premium payment options: quarterly, semi-annually, or annually.
  • Demands less paperwork. The insured isn't obligated to tender a periodic declaration of movements. It's adequate to present sales data from the preceding month or quarter.
  • Ensures coverage for both the import and export of goods.
  • Supplementary coverage, such as intermediate storage cover, can be procured through endorsements.
  • Given that the policy encompasses multiple transit phases under a singular policy, it results in significant premium savings.
  • The insurance coverage commences from the moment the raw material is acquired and continues through all transportation phases and storage at intermediary sites, culminating at the final destination or the juncture where the customer's liability concludes.

Who Needs

Sales Turnover Policy ?

A sales turnover policy is relevant and advantageous for a broad spectrum of businesses spanning various industries. Here are some types of businesses that stand to gain from this policy:

  • Small, medium, and large businesses
  • Manufacturing companies
  • Exporters and importers 
  • Retailers
  • Startups
  • Service providers
  • FMCG (fast-moving consumer goods) companies
  • Food and hospitality industry
  • Automobile industry

Why Get

Sales Turnover Policy?

A marine sales turnover policy is an apt choice for industries where creating or manufacturing the final product for sale necessitates numerous internal transits. The policy's intent is to shield businesses from financial setbacks stemming from unforeseen events such as fire, theft, or damage to stock, equipment, or property. It offers fiscal safeguarding for the company's assets and operations, providing coverage premised on the insured's annual sales turnover. Unlike policies that cover only a specific type of transit, this policy encompasses domestic purchasing of goods and services, exports, transfers between factories, warehouses, or depots, job & labor movements (to and fro), domestic sales, imports, etc.

Given that the sales turnover policy encapsulates multiple transit stages under a singular policy, it results in notable premium savings. By accurately projecting sales turnover and selecting apt coverage, businesses can sidestep excessive expenditure on superfluous coverage. As the sales turnover policy operates on a consumption basis, insurers have the discretion to present alluring payment alternatives to clients, such as the option of paying premiums quarterly or biannually, rather than upfront. This versatility aids the insured in enhancing cash flow management. Furthermore, by amalgamating all marine insurance risks under one policy, STOP affords convenience and coherence for the insured, streamlining the administrative procedure and simplifying claims management.

Coverages & Exclusions in

Sales Turnover Policy
The coverages provided by a sales turnover policy may be categorized as mentioned below
Domestic Purchase of Raw Materials, Consumables, etc
The coverage includes protection for raw materials, consumables, and other goods procured domestically. This means that when a business purchases these items and they are in transit to the business's location, they are covered against risks such as damage during transportation, theft, accidents, and unforeseen events that may lead to loss or damage.
Imports and Customs Duty
A STOP policy can include coverage for customs duties paid in the event of a loss to imported goods. This means that if the insured goods suffer a covered loss during transit, the policy can help reimburse the customs duties paid, reducing the financial impact on the business.
Inter-depot, Inter-factory, and Inter-warehouse Transfer
A STOP policy can extend its protective reach to cover the movement of goods between different depots or storage locations within a company's network. Thus, it ensures that goods remain insured during these movements, safeguarding against potential damage, theft, or loss. It also encompasses the transit of raw materials, semi-finished products, or finished goods between multiple factory locations or warehouses of a business.
Domestic Sales of Finished Goods
A STOP policy extends its protective coverage to the domestic transit of finished goods. This means that when finished products are being transported from the manufacturing facility or warehouse to customers, distributors, or retailers within India, they are covered against the risks and perils during transit. This includes coverage for goods in transit via road, rail, or other means of domestic transportation.
Export Sales (FOB/CIF)
This policy is designed to safeguard businesses engaged in export sales, whether on a free-on-board (FOB) or cost, insurance, and freight (CIF) basis. When sales are conducted on a FOB basis, the coverage begins when the goods are placed on board the vessel at the Indian port of shipment. The policy ensures that the goods are protected during their voyage to the foreign port. Under CIF sales, the coverage extends further, including not only the voyage but also for the goods during transit and until they are delivered to the overseas buyer's destination.
Theft, Pilferage & Non-delivery (TNPD)
These policies provide basic coverage against these specific perils that can occur during the complex journey of goods from the point of origin to the destination. This coverage ensures that businesses are compensated for the value of goods that are stolen, pilfered, or not delivered to their intended destination.
In the event of an explosion or similar event, explosion coverage protects your shipment as well as any cargo or property on board. In addition, it covers the costs of salvage and recovery efforts incurred because of the explosion, and liability for damages to other carriers and property.
Temporary Storage Cover at Intermediate Locations
This policy offers comprehensive coverage not only during the transit of goods but also during temporary storage at intermediate locations. This means that the goods remain protected even when they are not in motion and are awaiting further transportation or processing.
Natural Calamities
In the event of natural disasters like storms, hurricanes, earthquakes, or tsunamis, this coverage protects against damages or losses to the cargo.

Sales Turnover Policy Claims Examples

Claim for Machinery Damage in Road Accident
ABC Manufacturing, a leading Indian firm renowned for crafting top-tier industrial machinery, recently wrapped up a major production cycle. However, en route to delivering a substantial machinery order to a different Indian city, the transport truck encountered an unexpected accident due to adverse road conditions. Sadly, this incident led to substantial damage, rendering the machinery non-functional and unsuitable for the customer's delivery.
ABC Manufacturing made a prudent move by investing in a Sales Turnover Policy (STOP) a few months back. Following an unfortunate incident, the company promptly notified their insurance provider, furnishing all essential documents, including the bill of lading, accident evidence, and machinery damage particulars. The insurance company thoroughly assessed and validated the claim, which was swiftly approved, as the incident fell within the coverage of the STOP policy. ABC Manufacturing received a compensation matching the machinery's value, ensuring they could recover their investment from the lost shipment. Thanks to STOP, ABC Manufacturing avoided a significant financial setback, enabling them to replace the damaged machinery or fulfill the customer's order, safeguarding business continuity.

About Sales Turnover Policy

What is an annual turnover? Plus Icon
What are sales turnover and net turnover? Plus Icon
What are the different types of sales turnover? Plus Icon
What are the other names for sales turnover? Plus Icon
What is an umbrella policy in marine insurance? Plus Icon

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This is an article by YouStory written by Palak Agarwal and published on October, 2022

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