MARINE INSURANCE

Marine Insurance is the oldest form of insurance .It is concerned with the foreign trade conducted through sea routes. Marine risks are usually related to the ship or cargo. The businessman and the owner of ship always want to ensure the safe arrival of their cargo and ships.

Marine Insurance covers a large number of risks including sinking, burning of ship standing or going astray of the ship0,accident stormy winds, collision of ships ,jettison ,explosion ,sea dacoities etc. Causing losses to the ship and cargo and many other perils of the sea.

Definition:Marine insurance has been defined as a contract between

insurer & insured whereby the insurer undertakes to indemnify the insured in a manner & to the interest thereby agreed, against marine losses incident to marine adventure.

Section 2(13) A of the insurance Act 1938 defines marine insurance as follows:

“Marine insurance business” means the business of effecting contracts of insurance upon vessels of any description, including cargoes, freights & other interests which may be legally insured in or in relation to such vessels, cargoes and freights, goods, wares, merchandise & property of whatever description insured for any transit by land or water or both, & whether or not including ware house risk or similar risk in additional or as incidental to such transit & includes any other risk customarily included among the risks insured against in marine insurance policies.

The above definition clearly lays down the following classification of the marine insurance.

(I ) Hull insurance:Insurance of vessel & its equipment are included under hull insurance.

There are a number of classifications of vessels such as ocean steamers, sailing vessels, builders, risks, fleet policies & so on.

(ii) Cargo insurance:It may be written under a single risk policy or floating policies. The

cargo may be of any description, for example, wares, merchandise, property, goods & so on.

(iii) Freight insurance:Freight is to be payable for the carriage of cargoes or if the vessel is

chartered, the money to be paid for the use of the vessel. The carrier is unable to earn freight if the goods or property (called cargoes) are not safely transported.

(iv) Liability insurance:The Marine insurance policy may include liability

hazards such as collision or running down. Insurance can also be taken for the expenses involved in non-compliance of rules & regulation without any intention to deceive. It should be clear here that marine perils insurance covers not only the “ocean but also the inland perils.” The perils to be included in the policy are clearly defined & the

Insurer will be liable only for the insured perils.

Based on the contract between insured and insurer.

The insured is under an obligation to pay certain amount of premium as

consideration

The insurance may be for a single journey or a number of journey during

a specific period of time.

Under marine insurance, the insurer only guarantees to compensate the loss caused by sea uncertainties .

Cargo , Ship and freight can be insured under marine

insurance policy.

Characteristics

Marine Insurance may be inland also i.e. for railway , road transportation.

 A marine policy must specify, (a) the name of the assured or of some

person who effects the insurance on behalf of the assured;

(b) the subject-matter insured and the risk insured against;

(c) the voyage or period of time, or both, as the case may be, covered by the insurance;

(d) the sum or sums insured; and (e) the name or names of the insurers.

MARINE INSURANCE POLICY

Signature of insurer(1)  A marine policy must be signed by or on behalf of the insurer;

provided that in the case of a corporation the corporate seal may be sufficient, but nothing in this section shall be construed as requiring the subscription of a corporation to be under seal

Subscription by two or more insurers(2)  Where a policy is subscribed by or on behalf of two or more

insurers, each subscription, unless the contrary is expressed, constitutes a distinct contract with the assured.

Voyage and time policies  Where the contract is to insure the subject-matter at and from, or

from one place to another or others, the policy is called a “voyage policy”, and where the contract is to insure the subject-matter for a definite period of time the policy is called a “time policy” and a contract for both voyage and time may be included in the same policy.

Designation of subject-matter (1)  The subject-matter insured must be designated in a marine policy

with reasonable certainty. Nature and extent of interest(2)  The nature and extent of the interest of the assured in the subject-

matter insured need not be specified in the policy

Designation in general terms

(3)  Where the policy designates the subject-matter insured in general terms, it shall be construed to apply to the interest intended by the assured to be covered.

Usage(4)  In the application of this section regard shall be had to any usage regulating

the designation of the subject-matter insured.

Valued policy or unvalued (1)  A policy may be either valued or unvalued.

Valued policy(2)  A valued policy is a policy that specifies the agreed value of the subject-matter

insured. Value fixed(3)  Subject to this Act, and in the absence of fraud, the value fixed by the policy is,

as between the insurer and assured, conclusive of the insurable value of the subject intended to be insured, whether the loss is total or partial.

Idem(4)  Unless the policy otherwise provides, the value fixed by the policy is not

conclusive for the purpose of determining whether there has been a constructive total loss.

Unvalued policy

 An unvalued policy is a policy that does not specify the value of the subject-matter insured, but, subject to the limit of the sum insured, leaves the insurable value to be subsequently ascertained in the manner hereinbefore specified.

Floating policy by ship or ships(1)  A floating policy is a policy that describes the insurance in general

terms and leaves the name of the ship or ships and other particulars to be defined by subsequent declaration.

Declaration(2)  The subsequent declaration or declarations may be made by

endorsement on the policy or in other customary manner. Idem(3)  Unless the policy otherwise provides, the declarations must be

made in the order of dispatch or shipment and they must, in the case of goods, comprise all consignments within the terms of the policy, and the value of the goods or other property must be honestly stated, but an omission or erroneous declaration may be rectified even after loss or arrival, provided the omission or declaration was made in good faith.

Idem

(4)  Unless the policy otherwise provides, where a declaration of value is not made until after notice of loss or arrival, the policy must be treated as an unvalued policy as regards the subject-matter of that declaration.

Policy form (1)  A policy may be in the form in the Schedule.

Construction of terms in Schedule(2)  Subject to this Act, and unless the context of the policy otherwise

requires, the terms and expressions mentioned in the Schedule shall be construed as having the scope and meaning in the Schedule assigned to them.

Premium to be arranged(1)  Where an insurance is effected at a premium to be arranged, and no

arrangement is made, a reasonable premium is payable. Additional premium(2)  Where an insurance is effected on the terms that an additional premium

is to be arranged in a given event, and that event happens but no arrangement is made, then a reasonable additional premium is payable.

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90m02_e.htm#BK26

http://insurancewindows.blogspot.in/2012/06/nature-of-marine-insurance-contract.html

WWW.google.com Insurance Principal and Practice by M.N.

Mishra ,S.B. Mishra

REFERENCES