What are
the clauses of marine
insurance ?
Answers
A marine insurance policy may have a number of clauses. These clauses may be general for all types of policies, or may be special to cover certain agreed points. A policy should cover all types of things so that it may avoid misunderstanding or avoid disputes at a later stage.
Some of the clauses covered in a marine insurance policy are given as under:
1. Valuation Clause:
The value of the subject is given in the clause. The value is agreed upon between both the parties. In case of loss or damage, the compensation will not exceed the amount given in the policy. If the value of the policy is to be decided at the time of loss, then this column is left blank.
This clause refers to the time when risk commences. According to this clause the risk coverage starts when the ship is lying at the port of its departure and from the time it leaves the port. If insurance policy states the words, ‘at and from Madras’, it means the risk is covered when the ship is at Madras port and also when it leaves this port. This clause applies to Hull and Freight Insurance.
Warehouse to Warehouse Clause:
Warehouse to Warehouse Clause:This clause covers the risk from the warehouse of the shipper or consignor to the warehouse at the destination. If the cargo is to be brought from the hinterland to the port, one marine policy will cover the risk at land and also at sea. The risk of taking goods to the port from sender’s warehouse to the arrival of goods at the receiver’s warehouse is covered. This clause saves the shipper from lot of troubles and he is sure of the safe arrival of the subject.
Change of Voyage:
Change of Voyage:The details of the voyage are mentioned in the policy. The ports of departure and arrival are mentioned in the policy. The route to be followed by the ship is also given. In case of any deviation, the insurer will be relieved of his liability. If the ship changes its original route and follows same route later on, it will be taken as deviation. The insurer will not be liable to indemnify the loss if the original route is changed.
The ship should go and stay only at those ports which are mentioned in the policy. In case the ports are not mentioned, then the ship should take the customary route and stay at the port coming on that route only. If the ship goes to any other port, it will amount to deviation. The calling at ports must be for justifiable reasons.
Inchmaree Clause:
Inchmaree Clause:Under this clause any loss caused by the negligence of the master or a crew member is also covered. The damage caused to the cargo in loading and unloading operations is also recoverable. This clause was inserted after a famous case involving a ship named ‘Inchmare’ in 1857. This ship was damaged by the negligence of the crew and the insured could not get the claim for damages because it was not covered under the ‘perils of the sea’. Later on, underwriters included this clause in Marine Insurance.
Memorandum Clause:
Memorandum Clause:Sometimes perishable goods are the subject-matter of insurance. The memorandum clause is used to save the insurer from paying small losses of perishable goods. Under this clause the insurer is not liable for partial losses. In certain commodities this loss is allowed up to 50%. However, if there is a general loss or the ship is stranded, the insurer will be liable to pay the loss.
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