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📋 '''Floating policy''' is a type of [[Definition:Property insurance | property insurance]] or [[Definition:Marine insurance | marine insurance]] contract that provides a single blanket of coverage over goods or property whose quantity, value, or location fluctuates over time, rather than attaching to a fixed, scheduled list of items. It is most commonly encountered in [[Definition:Inland marine insurance | inland marine]], ocean cargo, and stock-throughput contexts, where an insured — such as a manufacturer, wholesaler, or logistics company — holds inventory that moves continuously between warehouses, transit routes, and customer sites.

🔄 Under a floating policy, the [[Definition:Sum insured | sum insured]] is set at a maximum limit representing the greatest value likely to be at risk at any one time, and the [[Definition:Insured | insured]] periodically declares the actual value of goods covered — often monthly or quarterly — so that the [[Definition:Premium | premium]] can be adjusted accordingly. This declaration mechanism distinguishes the floating policy from a fixed-value contract: the insurer's exposure tracks the insured's real economic position rather than a static estimate. In markets governed by the UK's Marine Insurance Act 1906, the floating policy has a long statutory heritage, and its principles have been adopted in many Commonwealth jurisdictions. Modern equivalents appear in [[Definition:Open cover | open cover]] arrangements used extensively in global cargo insurance, where each shipment attaches automatically to the master contract once declared.

💡 For businesses with volatile inventories, a floating policy eliminates the administrative burden and coverage gaps that would arise from purchasing separate policies each time goods move or stock levels change. It also benefits [[Definition:Underwriting | underwriters]], who gain a steady book of [[Definition:Premium | premium]] tied to a client's throughput rather than insuring discrete shipments on an ad hoc basis. Because [[Definition:Average clause | average clauses]] or [[Definition:Coinsurance clause | coinsurance provisions]] often apply, the insured has a strong incentive to declare values accurately; under-declaration can result in proportional reduction of [[Definition:Claims | claims]] payments. Across jurisdictions — from [[Definition:Lloyd's of London | Lloyd's]] cargo syndicates to Asian marine markets in Singapore, Hong Kong, and Tokyo — the floating policy remains a foundational structure for insuring goods in motion.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Open cover]]
* [[Definition:Marine insurance]]
* [[Definition:Inland marine insurance]]
* [[Definition:Blanket insurance]]
* [[Definition:Declaration]]
* [[Definition:Stock throughput insurance]]
{{Div col end}}

Definition:Floating policy - Revision history

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