Monday, 19 September 2022

Definition of Marine insurance

  NewTips.Info       Monday, 19 September 2022

What is marine insurance?

Marine insurance is the insurance against the risks related to seagoing ships, cargo of ships, chartering of ships. Insurance business started with marine insurance.

The name “Edward Lloyds” is particularly notable in marine insurance. He ran a coffee shop in London. '

Association of Lloyd's' or 'The corporation of Lloyd's' is the world's first insurance company or marine insurance company.

Types of Marine Insurance

Marine insurance can be divided into 4 categories according to content.

1. Ship Insurance:

If the shipping authority insures the name of the ship, it is called ship insurance. Any damage to the ship is covered by the insurance company.

2. Commodity Insurance:

The insurance contract taken out by the owner of the goods for the goods being shipped is called Commodity Insurance.

3. Freight or Freight Insurance:

The freight is paid by the owner of the goods to the shipping authority in return for the safe delivery of the goods. The owner of the goods does not want to pay the appropriate rent if the goods cannot be delivered properly. Hence the insurance taken out by the shipping authority for uncertainty of hire is called cargo or scaffolding insurance.

4. Marine Liability Insurance:

When the liability incurred  by the ship authority is accepted by the insurance company in return for the premium, it is called marine liability insurance. If there is any damage to the goods by any of the workers of the ship, if there is any damage to any of the workers of the ship or if there is any damage to any other ship or person due to the impact of the ship, the responsibility of the shipping company. However, the marine liability insurance company indemnifies.

Why is marine insurance necessary?

Introduction The history of looting by Firingi pirates is not unknown to the people of this country. Although the occurrence of water pirates has decreased, the number of natural disasters on the waterways has not decreased but is increasing. Even now, heavy storms, waves, pirate attacks, etc. can cause huge losses during sea shipping. At any time cargo ship can sink under sea with sailors. That is why the use of marine insurance has become essential in modern times. From this blog you can know about various aspects of marine insurance. So let's read it and find out.

Renowned insurance writer Professor M. N. Mishra (MN Mishra) said,"A contract of marine insurance is a type of agreement entered into between the insurer and the insured whereby the insurer undertakes to indemnify in accordance with the contract for any loss to the seagoing vessel and the interests connected with it.”

Marine insurance is a type of property insurance.

In the fire insurance unit we have learned about the types of property insurance and the required conditions. In this lesson we will learn about the concept of marine insurance and its differences. Marine Insurance Marine insurance is insurance against loss due to marine causes. Also, if the goods to be transported by sea have to be transported by inland waterways or by land to reach the sea, then the corresponding land route will also be covered by marine insurance. Now let us discuss the definition of Marine Insurance in the Insurance Act.

According to the British Insurance Act of 1906 (The British Insurance Act.1906) "A Contract of Marine Insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent there by agreed, against marine losses, that is to say the losses incident to marine adventure. (et – insurance is a contract in which the insurer undertakes to indemnify the insured against loss by sea in a prescribed manner and up to a prescribed limit.

Ghesh and Agarwala are well-known writers on insurance. According to them, marine insurance is "A contract of marine insurance is a contract of indemnity where by the insurer undertakes to indemnify the insured in a manner and to the extent there by agreed against the loss caused in connection with a marine adventure." Grete (a contract of indemnity by which the insurer undertakes to indemnify the insured in a specified manner and up to a specified limit) against any marine loss. Thus we see that their definition of marine insurance is essentially equivalent to the contract of insurance law. Now let us learn about another author's concept of marine insurance.

According to Halsbury, the contract by which the insurer undertakes to indemnify the insured in a specified manner and up to a specified limit is called marine insurance contract. Apart from this M,N Mishra said "Marine Insurance Contract is a contract between insurer and insured where by the insurer undertakes to indemnify the insured in a manner and to the interest there by agreed against marine adventure"

Now let us know what Indian law describes about marine insurance.

According to Section 2(13-A) of Indian Insurance Act 1938 “Marine Insurance business means the business of effecting contracts of insurance upon vessels of any description, including cargoes, freights and other interests which may be legally insured in or in relation to such vessels cargoes and freights, goods wares merchandise and property of whatever or not including warehouse risks or similar risks in addition or as incidental to such transit and includes any other risks customarily included among the risks insured against in marine insurance policies”, now the definition of boat insurance is known . However, this marine insurance can be of different types. So let's try to know them.

Classification of Marine Insurance

1. Hull Insurance

The insurance against the possible loss of merchant marine i.e. ship's equipment is called ship insurance.

2. Cargo Insurance

Insurance against uncertainty of loss in respect of goods transported in commercial vessels is called cargo insurance.

3. Freight Insurance

Damage to the ship's cargo due to marine peril or loss of cargo overboard is not recoverable. Insurance against this masul loss is called masul insurance. It should be noted that in order to escape from the fury of the storm on the sea route, sometimes the goods of the ship have to be thrown into the sea. Insurance is also provided for such matters.

4. Liability Insurance

In marine insurance the insurance against certain types of loss is called liability insurance. For example, the rules and regulations may change during the sea voyage. It can cause financial loss. The insurance against any such loss is called liability insurance in marine insurance.

Classification of Marine Insurance

Considering the benefits of the policyholder, nowadays insurance companies issue different types of policies:-

1. Valued Insurance: The insurance policy in which the subject matter i.e. the value of the insured asset is determined with the consent of both the parties is called the valued insurance policy. In this case, the value of the contents is determined before the damage occurs and damages are awarded according to that value. In this case compensation is not given according to the market value. Generally; Valuable insurance is accepted for photographs, paintings, valuable works of art etc.

2. Non-valued insurance policy: The insurance policy in which the insurance contract is executed without determining the value of the contents is called non-valued insurance policy. In this case, compensation is made according to the then market value by determining the value of the property after the loss. Generally, valued insurance policies are accepted for those types of assets whose market value can be easily determined.

3. Travel Insurance: The travel insurance policy that mentions the itinerary is called travel insurance. In this case there will be no mention of time. For example:- The ship will go to Bangkok with goods from Dhaka' — this will be included in the travel insurance.

4. Term insurance policy: The insurance policy that provides marine insurance for a specific period of time is called term insurance policy. In this case there will be no mention of the itinerary. Eg:- Marine insurance is done for the next 6 months/Insured for the period from 31st January 2016 to 31st January 2017.

5. Mixed insurance policy: The insurance policy which contains specific itinerary as well as time or date is called mixed insurance policy. For example:- The ship will reach Bangkok from Dhaka in next 15 days.

6. Large risk insurance policy : When two or more insurance companies jointly insure any content, it is called large risk insurance policy.

7. Port Risk Insurance: Port risk insurance is accepted by the port authority to indemnify the assets of the port such as lighter ships, barges, goods lying in the port.

8. Floating or Canopy Insurance: Floating or Canopy Insurance if more than one ship or property of the same owner is insured under one policy. If Uddip is to insure more than one vessel or property, it should be understood as blanket insurance.

9. Open Defense or Open Insurance: Open or Open Defense insurance policies are taken for one year at a time to avoid the hassle of opening the policy repeatedly.

Scope of Marine Insurance

Insurance against possible loss of property only by sea is not called sea insurance; Inland waterways and even land routes are covered by marine insurance. It may be necessary to carry the goods by inland waterways for the purpose of loading the goods on board for sea transport; At any point on the way, for some reason, the goods may have to be temporarily stored in a warehouse somewhere. Therefore, the risk of keeping and carrying the goods on the said route and place will also be covered under marine insurance. So for the purpose of transportation by sea, all the insurance from the warehouse to the point of destination will be covered by the marine insurance.

What are marine hazards?

All the dangers faced by ships while navigating the waterways are called maritime dangers.

There are two types of marine hazards

  • Natural hazards.
  • Unnatural/moral/man-made hazards.

1. Natural Hazards: When a disaster occurs due to natural causes, it is called a natural hazard. For example: sea storms, submerged mountains or impact with ice blocks etc.

2. Unnatural/Ethical/Man-Made Hazards: When a hazard is caused by humans or any other cause other than natural causes, it is called moral hazard. For example: pirate attacks, product dumping, arson etc.

What is marine damage?

The amount of erosion caused by sea waves is called marine damage.

Marine damage is mainly of two types:

  • Overall loss.
  • Recoverable total loss.

1. Total Loss: If the insured property or contents are completely damaged or destroyed, it is called total loss. If it is destroyed to such an extent that it cannot be salvaged then it will be actual total loss.

2. Recoverable Total Loss: And if salvage is possible but not salvaged because salvage cost is too high then it will be recoverable total loss.

What is partial damage?

Partial loss is when the insured property or contents are partially damaged.

Partial damage is of two types:

  • General partial damage.
  • Special Partial Damage.

General Partial Damages: Voluntary sacrifices to protect all parties are called general partial damages. Basically, general damage is caused to save the ship. For example: Gutcha, sacrifice etc.

Special Partial Loss:  Damage to any part of the ship, cargo or freight caused by accident or natural causes is called special partial loss. No one has a hand in this matter.

What is called jettison or product launch?

Casting of cargo is the voluntary throwing away of certain goods in order to save the ship and its cargo from sinking or to avoid great danger. This makes the ship lighter. In this case, the other party will compensate the person whose product has been thrown away at a proportionate rate. If such risk is insured, compensation is available from the insurance company.

How does marine insurance increase invisible exports?

Generally, foreign exchange earned by providing services is called invisible export. In marine insurance, the goods are insured and sent to the importer by ship. The cost of goods and insurance costs are collected from the importer. The amount realized on the cost of goods is the visible export and the amount realized on insurance cost is the invisible export.

Marine insurance needs to be kept in mind

1. Jettison = renunciation ie jettison and renunciation are the same thing. If the question wants to know any kind of danger then it will be jettison and if it wants any kind of damage it will be sacrifice.

2. If you hide the information from the insurance company, the policy of good faith is violated, so the insurance company will not cover the loss.

3. Claiming damages for the subject matter insured is lawful but claiming damages for any other subject matter would be against the insurable interest.

4. If there is a loss due to which the insurance company will compensate the loss directly, if the loss is not due to the same reason, the insurance company will not cover it. For example, product damage due to storms will be covered. It turned out that there was a storm at sea but the goods were not damaged by the storm, the ship got stuck in the ford and there were oranges that rotted because of the stuck. In this case the insurance company will not compensate.

5.Insurance “If the policyholder himself” insures his property with multiple insurance companies, it will be collateral insurance, but if the insured property is re-insured by the “insurance company” with another insurance company, then it will be reinsurance. In case of loss, all companies will compensate proportionally. If one company pays damages alone, it will later recover the balance from the other company.

6. Date of voyage, date of destination and date of arrival, validity of insured property, declaration of sea route and nationality, keeping with escort the express conditions of marine insurance as these are mentioned in the contract.

7. Seaworthiness of the ship, not to change the route, validity of which, to start the journey at the specified time, are unspoken conditions because they are not written but have to be observed. The insurance company will not indemnify in case of breach of any express or implied condition.

logoblog

Thanks for reading Definition of Marine insurance

Previous
« Prev Post