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