What is “floating policy” in international trade? Can anyoine give the forum a deifnition?

Thanks

Replying To [Admin]:

Seeing that no-one has had a stab at it, I'll go for it.



A Floating policy is not a promise that a politician makes while lying on an airbed in a swimming pool, but rather an Insurance policy that covers damage and/or loss to goods that are transported by sea, regardless of the ship which is carrying them.

Hey Sivaras, I'll second you for the 100 smackaroos.

There's not too many who know the meaning of Fixed and Floating Charges over assets ... and there's only a handful of bankers and commercial lawyers who really understand the meaning and impact of Crystallisation like you do ... and even fewer Accountants.

I'm impressed.

Replying to [Admin]:

Hi Aussie, i agree with you, Admin should give sivaras the points !

I ever thought a ?floating policy? in international trade is my contract that I receive a "German weekly newspaper" here in Thailand !!

rgds
Wilhelm

Replying to [Admin]:
Floating policy is an insurance policy for sea transport: Which covers loss of or damage to goods being transported by sea
Thanks



Also as per answer.com
an insurance policy covering loss of movable property regardless of its location

Replying To  [Aussie]:

Hey Aussie. I agree with you here, so sivaras got the points.


Congratulations sivaras.


 

Replying to [Grigo]:

While the topic is about Floating Policies (insurance) Sivaras rightly compared it to Floating Charges and Crystallisation in commercial loans. I know that even many lawyers do not understand "crystallisation" as Sivaras apparently does. It was his word "crystallisation" that grabbed my attention.

You often see companies and business people giving a "floating charge over all assets and revenues" as security for a loan. A floating charge which includes "revenues" is a pretty lethal weapon in the hands of a lender.

In the event of default by the borrower (and the default might even be a simple non-monetary administrative sort of default) the lender can "crystallise" the floating charge merely by delivering a one paragraph "Notice of Crystallisation" (at least in Australian securities law).

Delivery of the crystallisation notice means that every asset and revenue of the borrower effectively becomes the property of the lender, immediately.

Yep, upon crystallisation of the floating charge over revenues, the borrower must keep handing over every cent of ongoing business revenue to the lender without deduction of one cent to pay for business costs including the cost to buy stock. Imagine how long any business could keep its door open under that little scenario!

I've seen a couple of lenders in my time deliberately force the doors of businesses to close by a simple crystallisation notice. Yet, your average lawyer or accountant doesn't bat an eyelid when their clients sign a "floating charge over all assets and revenues" to secure a business loan ... because they don't understand the impact of crystallisation of charges over revenues.

If a bank ever wants a floating charge over all your revenues tell em to go get stuffed.

It's sort of a reverse situation under a marine cargo insurance Floating Policy ... the insurer's floating risk crystallises when an insured event occurs.

It's just boring-interesting stuff that you pick up along the way in business. (But, I've found I've had to learn some of it in order to know how to instruct lawyers else the buggers often leave you out in the cold.)

Replying to [Admin]:

a policy that provides protection of a broad nature for shipments of merchandise and that is valid continuously until canceled

an insurance policy covering loss of movable property regardless of its location its provides protection of a broad nature for shipments of merchandise and that is valid continuously until canceled.it describes the insurance in general terms and leaves the name of the ship and other particulars to be defined by subsequent declarations, either by endorsement on the policy or in any other customary manner.

Replying to [Admin]: As far as I know, floating policy is the insurance for the movable property, i.e. consignment sent by ships, marine insurance Act 1909 specified the same in detail.
In Floating policy the sum insured for the whole group of item is mentioned and not for an individual item. The proper description of the group are mentioned in the schedule of the policy. Each claim reduces the sum insured and has to be reinstated by paying extra premium.