What is Marine Insurance ?

hello students welcome to the lecture on marine insurance and after this lecture we will be able to learn the following objectives.

 What is Marine Insurance ?

explain the marine insurance business and its types. describe the principle of indemnity in valued marine policies, define the essential elements or principles of marine insurance. discuss the subject-matter of marine insurance. explain the warranties in marine insurance and operation of marine insurance.

understand the procedure to insure under marine insurance.

Brief Introduction

let us start with a brief introduction to marine insurance. this is the oldest branch of insurance and is closely linked to the practice of Bottomly which has been referred to in the ancient records of Babylonians and the Code of Hammurabi way back in BC 20 to 50.

manufacturers of goods advanced their material to traders who gave them recipes for the materials and a rate of interest was agreed upon if the trader was robbed during the journey. he would be freed from the debt but if he came back. he would people the value of materials and the interest a contract of marine insurance is an agreement whereby the insurer undertakes to indemnify the in short in the manner as and to the extent thereby accrete against the transit losses.

that is to say losses incidental to transit a contract of marine insurance may by its Express terms or by usage of trade is extended. so as to protect the insured against losses on inland waters or any land risk which may be incidental to any seaward.

Cargo insurance.

In simple words the marine insurance includes a cargo insurance which provides insurance cover in respect of loss of or damage to goods during transit by rail, road, sea or air.

thus cargo insurance concerns the following export and import shipments by OSHA ocean-going vessels of all types coastal shipments by steamers sailing vessels merchandised holes etc. shipments by inland vessels or country craft and consignments by rail route or air and articles sent by post B hull insurance which is concerned with the insurance of ship's hull machinery etc.

How does Marine Insurance Work.

this is a highly technical subject and is not dealt in this module hello I'm Benjamin Lupo certified financial planner of Kensington am i registered investment advisor with our next topic -- how does marine insurance work in this topic we're examining commercial marine insurance used in the shipping industry insurance.

for a small pleasure craft is a different topic shipping companies moving cargo from one port to another need to insure themselves against claims resulting from harm to their Freight crew passengers and any damage caused by their vessels to marine infrastructure such as bridges and harbor facilities. the ships themselves are insured by separate policies known as hull insurance which cover losses due to fire sinking stranding or collision with another vessel.

this type of insurance usually covers both vessels in case of a collision when it comes to cargo shipping companies need to select how much coverage is needed some types of cargo need more insurance than others insurance for commercial vessels can fluctuate in price substantially.

due to variability in weather patterns piracy and other factors insurance is a major cost item for shipping companies and a spike in insurance rates can affect their profits concern.

Marine Insurance Business.

let us talk about marine insurance business and its types a contract of marine insurance is an agreement whereby the insurer undertakes to indemnify you short in the manner as an to the extent agreed against losses incidental to marine and venture there is a marine adventure when any insurable property is exposed to merit barrels that is barrels consequent to navigation of the sea.

the term perils of the sea refers only to accidents or casualties of the sea and does not include the ordinary action of the winds and waves besides maritime perils include fire war perils pirates seizures and jettison etc.

hello Gary's here today we have an interesting topic why unit bought insurance some people simply overlook bought insurance they think that nothing bad is going to happen when is Realty bad things often happen evolve ik bolts if you own a boat you need bought insurance in fact many states.

now require body owners to carry watercraft liability insurance before they transport or operate boat if you bought has been financed the lender will almost always recur your to carry full coverage boat insurance again most people don't think anything bad will happen but bad things to end it.

there are some types of marine insurance a special declaration policy this is a form of floating policy issued to clients whose annual estimated dispatchers that is turnover by rail wrote Inland Waterways exceed inr to korone declaration of dispatchers shall be made at periodical intervals and premium is adjusted on expiry of the policy based on the total declared amount.

when the policy is issued some insured should be based on previous year's turnover or in case of fresh proposals on a fair estimate of annual dispatchers a discount in the rates of premium based on turnover amount example exceeding inr five crore etc.

lab basis and loss ratio is applicable be special storage risks insurance this insurance is granted in conjunction with an open policy or a special declaration policy. the purpose of this policy is to cover Goods lying at the railway premises or carriers godowns after termination of transit cover under open or special declaration policies but pending clearance clearance by the consignees.

the cover terminates when delivery is taken by the Cassini our payment is received by the consignor which ever is earlier see annual policy this policy issued for 12 months covers goods belonging to the in short which are not under contract of sale which are in transit by rail road from specified devotes processing units to other specified.

defaults processing units D Duty insurance cargo imported into India is subject to payment of customs duty as per the Customs Act this Duty can be included in the value of the cargo in short under a marine cargo policy or a separate policy can be issued in which case the duty insurance clause is incorporated in the policy warranty provides that the claim under the Duty policy would be people only if the claim under the cargo policy is payable increased value insurance insurance may be goods at destination port on the data of landing.

if it is higher than the cost insurance and fright CIF and Duty value of the cargo in a contract of marine insurance be insured must have insurable interest in the subject matter.

in short at the time of the loss insurable interest is not required to be present at the time of taking the policy features of marine insurance. the features of marine insurance are offer and acceptance it is a prerequisite to any contract similarly the goods under marine transit insurance will be after the offer is accepted by the insurance company.

example a proposal submitted to the insurance company along with premium on 1st April 2011 but the insurance company accepted the proposal on 15 April 2011 the risk is covered from 15 April 2011 and any loss prior to this date will not be covered under marine insurance payment of premium and owner must ensure that the premium is paid well in advance.

so that the risk can be covered if the payment has made through cheque and it is dishonoured then the coverage of risk will not exist it is as per Section 64 we be of Insurance Act 1938 payment of premium in advance details under insurance a legislation module contract of indemnity marine insurances contract of indemnity and the insurance company is liable only to the extent of actual loss suffered.

if there is no loss there is no liability even if there is operation of in short barrel example. if the property under marine transit in insurance is insured for INR 20 lakhs and during transit it is damaged to the extent of INR 10 lakhs then the insurance company will not pay more than INR 10 lakhs utmost good faith the owner of goods to be transported must disclose.

all the relevant information to the insurance company while insuring their goods the marine policy shall be voidable at the option of the insurer in the event of misrepresentation misdescription or non-disclosure of any material information.

example the nature of goods must be disclosed that is whether the goods are hazardous in nature or not as premium rate will be higher for hazardous Goods insurable interest the marine insurance will be valid.

if the person is having insurable interest at the time of loss the insurable interest will depend upon the nature of seals contract types of marine insurance coverage marine insurance is an extremely important element of boat ownership this offers a wide variety of options for the boat including cover for physical damage liability medical emergency and other unforeseen circumstances that may occur on the water physical damage coverage.

this policy cuts the boat motor and equipment against theft fire vandalism wind lighting and other acts of nature any official drivers of the boat will be protected. if we crash into an underwater banked object in addition the boat equipment is covered up to a certain value we must select between an actual value and agreed value policy to determine exactly how much we will be covered or if the boat should ever sustain damage liability coverage.

this type of coverage insurance in the event that we or a passenger causes injury to another person or property while on board if we accidentally collide with another vessel or dock area we can feel secure knowing we are covered this coverage usually protects passengers and property up to inr 5 car or medical coverage in the event of a boat accident.

this policy gives us and our guests the medical protection we need to save ourselves from incurring astronomical hospital bills extensive coverage there are other items that mean we may want covered for our boating needs whether it is towing personal effects portable televisions stereos cameras mobile phones and fishing gear or uninsured boater prevention our partner has a plan to meet the needs.

there is also additional supporting liability insurance for those adventurous owners who like to race and participate in competitions origins of formal marine insurance maritime insurance was the earliest well-developed kind of insurance with origins in the Greek and Roman maritime loan separate marine insurance contracts were developed in Genoa and other Italian cities in the 14th century and

spread to northern Europe premiums varied with intuitive estimates of the variable risk from seasons and pirates the modern origins of maritime the modern origins of marine insurance law in English law were in the law merchants with the establishment in England in 1601 of a specialized chamber of Assurance

separate from the other courts Lord Mansfield Lord Chief Justice in the mid 18th century began the merging of Nohr merchant and common law principles the establishment of Lloyds of London competitor insurance companies are developing infrastructure of specialists such as ship brokers Admiralty lawyers bankers surveyors loss adjusters general average adjusters and the growth of the

British Empire give English law of prominence in this area which it largely maintains and forms the basis of almost all modern practice the growth of the London insurance market led to the standardization of policies and judicial precedent further developed marine insurance law in 1906 the marine Insurance Act was passed which codified the common law it is both an extremely thorough and

concise piece of work although the title of the Act refers to marine insurance the general principles have been applied to all non-life insurance the principle of indemnity in valued marine policies the principles of insurance law are an idiosyncratic mixture of contract law and practice in the context of marine insurance the contract embodied in the policy of assurance is given prime of place is fostered

by the Marine Insurance Act 1963 and market practice the parties to the policy the assured and insured are given relative freedom to mold the agreement to their specifications however this freedom is not without limitation mandatory rules of public policy come into play these rules serve to bind this freedom and bring a sense of homogeny to what could otherwise be an extremely varied tapestry of

contracts in insurance practice overriding public policy concerns against profiteering centered on the prohibition of gaming and wagering unlawful adventure and fraud act to curb any policy arrangements which are considered to elicit to be allowed marine policy as a contract of indemnity a contract of marine insurance is a contract whereby the insurer undertakes to indemnify your shot in the manner

and to the extent thereby agreed against marine losses that is to say losses incident to the marine adventure expressly the contract agreed by the insurer and the Ishod is one of indemnity the insurer agrees to provide protection against stipulated losses here short may incur by reason of being connected to a marine adventure as consideration for this protection nearshore pays a premium calculated by

reference to the nature and degree of ride risk involved in the adventure the ultimate objective behind this exchange is to ensure that in the event that a peril for which provision is made causes loss or damage to the subject matter the Ishod would be compensated under the policy in effect the quality transfers the risk of loss or damage occurring to the subject matter from there short to the insurer who

will bear it should actual ice historically the transfer of risk by way of marine insurance policy was vital to the development and preservation of international trade did you know the first known marine insurance agreement was executed in Genoa on 1310 1347 and marine insurance was legally regulated in 1369 they're moving on further.

Essential Elements or Principles of Marine Insurance.

let's talk about essential elements or principles of marine insurance. new marine insurance has the following essential features which are also called fundamental principles of marine insurance. features of general contract insurable interest utmost good faith doctrine of indemnity, subrogation warranties proximate cause.

features of general contract proposal the broker will prepare a slip upon recipt of instructions to insure from ship owner merchant or other proposals proposal forms. so common in other branches of insurances are unknown in the marine insurance and only the slip so called the original slip is used for the proposal.

the original slip is accompanied with other material information with the broker deems necessary for the purpose the brokers are expert and well-versed in marine insurance law and practice the various kinds of marine proposals are altogether too diverse.

so elaborate rating schedules are not possible and the proposals are considered on individual merits acceptance the original slip is presented to the Lloyds underwriters or other insurers or to the lead of insurers who initial this slip and the proposal is formally accepted but the contract cannot be legally enforced until a policy is assured consideration.

the premium is determined on assessment of the proposal and his speed at the time of contract the premium is called consideration to the contract issue of policy having affected the insurance. the broker will now send his client a cover note advising the terms and conditions on which the insurer has been placed the brokers cover note is merely an insurance memorandum and and naturally has no value in enforcing the contract with the underwriters.

I did marketing at Lille an associate international I'm Nelson October I'm the manager of business development union associates international Lilian is a full-service reporter headquartered in Miami Florida we specialize in ocean freight and we have offices around the world specifically Guatemala Colombia Venezuela Panama and most recently China we get a lot of questions from our importers and exporters on cargo insurance what does it entail how much do you need what's covered.

so if you were to give kind of a basic overview of cargo insurance to importers and exporters what would you tell them that's a great point actually carb insurance is very important in the supply chain the first thing I would say to our importers and exporters friends is don't assume the car was insured make sure that the insurance coverage is stated in writing. make sure I recommend always to make sure it's door-to-door coverage because port-to-port coverage really doesn't cover anything port to port is from a port to the port on the other port so basically you're limited to what happens within the ship or the

airplane and usually nothing happens it's not being transported it's not a city it's having a highway so the scope is very limited as to what could happen within the confines of a ship now when the cargo gets unloaded and it goes into the port and it goes into our highway and to a warehouse people are driving in

there's a lot of theft up there whatever city might be that's when the likelihood of something happening is is that an all-time high so the second thing I'm customer is make sure it's a door to port coverage port support is much cheaper but it doesn't cover anything and should you should not be paying 1% of the CIF value of 14 Insurance make sure that the insurance company is triple-a rated and has the ability

to pay in case there's a pain to a great point what if they're either clean how does an importer or exporter kind of go about making that claim if the first thing you got to do is each insurance company will advise you of where the nearest inspection company is don't touch anything leave everything that has is called the inspector immediately have them take all the pictures preserve all the evidence do not

throw any boxes away in case of water damage for example or the actual goods being damaged to keep everything on the premises so when the inspector comes you provide them with a visual proof of the occurrence as far as our paperwork well your packing list your commercial invoice your bill of lading trucker weight bill released from the port because those that document has how much the goods

weighed at the time of being picked up at the port and the Bill of Lading also so they'll be able to do a comparison very quickly if you have all the documents ready obviously is the more proactive you are and the more the documents are squared away that quicker insurable interest section seven eight and nine to sixteen provide for insurable interest and in short person will have insurable interest in the

subject matter where he stands in any legal or equitable relation to the subject matter in such a way that he may benefit by the safety or D arrival of insurable property or may be prejudiced by its loss or by damage thereto or by the detention thereof or may incur liability in respect thereof since marine insurance is frequently affected before the commercial transactions to which they apply are formally

completed it is not essential for the ashore to have an insurable interest at the time of affecting insurance though you should have an expectation of acquiring such an interest if he fails to acquire insurable interest in due course he does not become entitled to indemnification exceptions there are two exceptions of the doctrine of indemnity in marine insurance profits allowed actually the doctrine says

that the market price of the loss should be indemnified and note profits should be permitted but in marine insurance a certain profit margin is also permitted in short value the doctrine of indemnity is based on the insurable value whereas the marine insurance is mostly based on and short value the purpose of the valuation is to predetermine the worth of insured did you know section 19 20 21 and 22

of the marine Insurance Act 1963 explained doctrine of utmost good faith subject-matter of marine insurance the insured may be the owner of the ship owner of the cargo or the person interested in flight in case the ship carrying the cargo sinks the ship will be lost along with the cargo the income that the cargo would have generated would also be lost based on this we can classify the marine insurance into

four categories hull insurance hull refers to the ocean-going ships trawlers etc as well as its machinery the hull insurance also covers the construction risk when the vessel is under construction the Wesser is exposed to many dangers or risks at sea during the which an assurance affected to indemnify the in short for such losses is known as hull insurance cargo insurance cargo refers to the goods and

commodities carried in the ship from one place to another the cargo transported from the sea is also subject to many fold risks at the port and during the voyage cargo insurance covers the shipper of the goods if the goods are damaged or lost fry it insurance fright refers to the fee received for the carriage of goods in the ship usually the ship owner and the fried receiver are the same person fried can be

received in two ways in advance or after the goods reached the destination in the former case fry it is secured in the latter the marine laws say that the fry it is payable only when the goods reached the destination port safely hence if the ship is destroyed on the way the ship owner will lose the fry it along with the ship that is why the ship owners purchase fright insurance policy along with the hull policy

liability insurance it is usually written as a separate contract that provides comprehensive liability insurance for property damage or bodily injury to third parties it is also known as protection and indemnity insurance which protects the ship owner for damage caused by the ship to docks cargo alas

or injury to the passengers or crew and fines and penalties assignment of marine policy a marine insurance policy may be transferred by assignment unless the terms of the policy expressly prohibit the same the policy may be assigned either before or after loss the assignment may be made either by endorsement on the policy itself or on a separate document the insured need not give a notice or

information to the insurer or underwriter about in silent in case of death of the in short a marine policy is automatically assigned to his heirs at the time of assignment the assignor must possess an insurable interest in the subject matter in short and in short that has spotted with or lost interest in the subject matter in short cannot make a valid assignment after the occurrence of the loss the policy can be

assigned freely to any person the assignor mainly transfers his own right to claim to the assignee now in the end let us summarize what we have learnt in this lecture marine insurance is an extremely important element of boat ownership physical damage coverage policy guards the boat motor and equipment against theft fire vandalism wind lightning and other acts of nature trying to save money by

not having marine insurance can cost one a fortune in the event of an accident or damage to one's vessel the principles of insurance law are an idiosyncratic mixture of contract law and practice in the context of marine insurance a total loss can take one of two forms either actual total loss or constructive total loss.