for situations where the total insurable amount
can be reasonably estimated but cannot be determined accurately-enough for computing correct premium
, until the insurance policy
comes to an end. For example, a trader
will take a floating policy on a sum estimated to be large enough to cover shipments during a period
(say, one year) and pays premium accordingly. As the shipments are sent out, the insurer
and the value
of those shipments is deducted from the insured
sum. This procedure
is repeated until the insured sum is almost exhausted. The insurer then recomputes the premium according to the total value
of the already-sent shipments, and adjusts it against the premium paid by the trader.
At this stage
the trader takes another floating policy and whole process
starts over again.