Explain marine insurance policies.
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ᴍᴀʀɪɴᴇ ɪɴsᴜʀᴀɴᴄᴇ ɪs ᴀ ᴛʏᴘᴇ ᴏғ ɪɴsᴜʀᴀɴᴄᴇ ᴛʜᴀᴛ ᴄᴏᴠᴇʀs ᴄᴀʀɢᴏ ʟᴏssᴇs ᴏʀ ᴅᴀᴍᴀɢᴇ ᴄᴀᴜsᴇᴅ ᴛᴏ sʜɪᴘs, ᴄᴀʀɢᴏ ᴠᴇssᴇʟs, ᴛᴇʀᴍɪɴᴀʟs, ᴀɴᴅ ᴀɴʏ ᴛʀᴀɴsᴘᴏʀᴛ ɪɴ ᴡʜɪᴄʜ ɢᴏᴏᴅs ᴀʀᴇ ᴛʀᴀɴsғᴇʀʀᴇᴅ ᴏʀ ᴀᴄϙᴜɪʀᴇᴅ ʙᴇᴛᴡᴇᴇɴ ᴅɪғғᴇʀᴇɴᴛ ᴘᴏɪɴᴛs ᴏғ ᴏʀɪɢɪɴ ᴀɴᴅ ᴛʜᴇɪʀ ғɪɴᴀʟ ᴅᴇsᴛɪɴᴀᴛɪᴏɴ.
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11th
Business Studies
Business Services
Insurance
Marine Insurance
Marine Insurance
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MAIN ELEMENTS OF MARINE INSURANCE CONTRACT - DEFINITION
Marine insurance provides protection against loss from unforeseen events in the ocean. The events could be collision of ship with the rock, or ship attacked by the enemies, fire and actions of the captains and crew of the ship.
Marine insurance is further broken down into three categories of insurance. These are ship or hull insurance, cargo insurance and freight insurance.
The main elements of a marine insurance contract are:
(i) Unlike life insurance, the contract of marine insurance is a contract of indemnity. The insured can, in the event of loss recover the actual amount of loss from the insurer.
(ii) Similar to life and fire insurance, the contract of marine insurance is a contract of utmost good faith. Both the insured and insurer must disclose everything, which is in their knowledge and can affect the insurance contract.
(iii) Insurable interest must exist at the time of loss but not necessary at the time when the policy was taken.
(iv) The principle of causa proxima will apply to it. The insurance company will be liable to pay only if that particular or nearest cause is covered by the policy.
MARINE INSURANCE - ITS COMPONENTS - DEFINITION
Marine insurance is slightly different from other types. There are three things involved i.e., ship or hull,cargo or goods, and freight.
(a) Ship or hull insurance: Since the ship is exposed to many dangers at sea, the insurance policy is for indemnifying the insured for losses caused by damage to the ship.
(b) Cargo insurance: The cargo while being transported by ship is subject to many risks. These may be at port i.e. risk of theft, lost goods or on voyage etc. Thus, an insurance policy can be issued to cover against such risks to cargo.
(c) Freight insurance: If the cargo does not reach the destination due to damage or loss in transit, the shipping company is not paid freight charges. Freight insurance is for reimbursing the loss of freight to the shipping company i.e., the insured.
TYPES OF MARINE INSURANCE POLICIES - DEFINITION
Marine insurance is slightly different from other types. There are three things involved i.e., ship or hull,cargo or goods, and freight.
(a) Ship or hull insurance: Since the ship is exposed to many dangers at sea, the insurance policy is for indemnifying the insured for losses caused by damage to the ship.
(b) Cargo insurance: The cargo while being transported by ship is subject to many risks. These may be at port i.e. risk of theft, lost goods or on voyage etc. Thus, an insurance policy can be issued to cover against such risks to cargo.
(c) Freight insurance: If the cargo does not reach the destination due to damage or loss in transit, the shipping company is not paid freight charges. Freight insurance is for reimbursing the loss of freight to the shipping company i.e., the insured.