Legal Definitions - time policy

A time policy is a type of insurance contract that provides coverage for a specific, predetermined period, rather than for a particular journey, event, or specific operation. This means that as long as an insured loss occurs within the defined timeframe, the policy will respond, regardless of how many separate voyages or activities take place during that period. Time policies are particularly common in marine insurance, where they are used to cover vessels or fleets for a continuous duration, typically six months or one year.

Here are some examples to illustrate how a time policy works:

• Example 1: Commercial Shipping Fleet

  A large international shipping company purchases a time policy to insure its entire fleet of container ships against perils like collision, sinking, or piracy for a period of one year. During this year, each ship in the fleet might complete dozens of voyages across various oceans. If one of their ships suffers damage during any of these voyages within that 12-month period, the insurance policy will cover the loss because it was active for that entire duration, not just for a single trip.

  This illustrates a time policy because the coverage is based on a fixed period (one year) and applies to all activities (multiple voyages) undertaken by the insured fleet within that timeframe, rather than being tied to a specific voyage or event.

• Example 2: Private Yacht Owner

  An individual who owns a recreational yacht obtains a time policy to cover their vessel for a period of six months. This policy protects the yacht against risks such as damage, theft, or liability, whether it is docked at the marina, cruising along the coast, or undertaking several short trips to nearby islands. If the yacht is damaged in a storm while anchored or collides with another vessel during one of its excursions within the six-month policy period, the owner can make a claim.

  This example demonstrates a time policy because the insurance protection is active for the entire half-year duration, covering any covered incidents that occur during that time, irrespective of the specific activities or number of trips the yacht makes.

• Example 3: Fishing Vessel Operations

  A fishing company insures its trawler with a time policy for a full fishing season, which lasts for nine months. This policy covers the vessel against various operational risks, including equipment breakdown, accidental damage, or salvage costs, throughout the entire season. The trawler makes numerous fishing expeditions during these nine months, returning to port between trips. Should the vessel experience a covered incident, such as engine failure at sea or damage to its hull while docking, at any point within the nine-month period, the policy will provide coverage.

  This situation exemplifies a time policy because the insurance coverage is continuous for the defined nine-month period, encompassing all fishing operations and associated risks that occur during that specific timeframe, rather than being limited to individual fishing trips.