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Marine
insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby by agreed, against marine losses, i.e. the losses incident to marine adventure
Why Marine Insurance should be done? Once the goods are moved out from the warehouse of the seller, they are no more in the custody of the seller or the buyer. They are rather in the hands of a third party called the carrier. During the transit loss can arise from: Fire, explosion Contact with water Breakage Accident Derailment of conveyance Theft Pilferage Non-delivery Exposure to these risks and the fact that the goods are in possession of a third party enhances the chances of loss.
Marine Policy
Meaning :The terms and conditions on which a contract of marine insurance is entered into between the assured and the insurer are incorporated in a document. It must be signed by or on behalf of the insurer [Sec.26(1)]. It must be duly stamped under the Stamp Act, 1899.
It must specify 1. 2. 3.
4. 5.
the name of the assured, or of some person who effects the insurance on his behalf the subject-matter insured and the risk insured subjectagainst the voyage, or period of time, or both, as the case may be, covered by the insurance the sum or sums insured the name or names of the insurer or insurers
Where the contract is to insure the subjectsubjectmatter at and from or from one place to another or others [Sec.27(1)].
Where the contract is to insure the subjectsubjectmatter for a definite period of time [Sec.27(1)]. It cant be for a period more than a year [Sec.27(2)]. It may, however, contain a continuation clause.
III. Valued Policy: is a policy in which the value of the goods are not fixed, (eg., things like painting, historical coins, work of art, ancient things) and the prices agreed to both the parties is fixed for this. IV. Unvalued Policy: is the policy in which the value of the subject matter is not decided at the time of issuing the policy however it is ascertained in the event of loss. When the loss occurs the value is decided by taking into account the cost of goods as per he invoice and does not include any anticipated profit.
V. Floating Policy :
It only mentions the amount for which the insurance is taken out, and leaves the name of the ship or ships and other particulars to be defined by subsequent declarations, which will be declared by the assured by endorsement on the policy or in other customary manner.
term warranty in case of MARINE INSURANCE ACT means that the assured undertakes that some particular thing shall or shall not be done , or that some stipulation shall be fulfilled , or that a particular state of facts does or does not exist.
Types of warranty
Expressed warranty
Date on which the ship will sail Place and manner of loading Statement that the cargo is lawful merchandise
Implied Warranty
Seaworthiness of the ship Legality of the voyage Proper documentation Clauses of marine insurance act
LOSSES
Unless the policy otherwise provides, the insurer is liable for any losses proximately caused by a peril insured against. Further unless the policy otherwise provides, the insurer is not liable ::1.If the loss is not caused by a peril insured against. 2. If the loss is caused by delay, which is caused by a peril insured against.
3. If the loss is caused by the ordinary wear & tear, ordinary leakage or breakage. A loss may be either total or partial. Any loss other than Total is partial loss.
TOTAL LOSS
A Total loss may be either ::1.An Actual total loss 2. A Constructive total loss.
1.ACTUAL 1.ACTUAL TOTAL LOSS :- An actual total loss occurs (a) Where the subject matter is actually destroyed or irreparably damaged. (b) Where the subject matter ceases to be a thing of the kind insured. (c) Where the assured is irretrievably deprived of the of the subject matter.
2. CONSTRUCTIVE TOTAL LOSS :- A constructive total loss occurs where the subject matter insured is reasonably abandoned because its actual total loss appears to be unavoidable. In particular there is a constructive total loss :- In the :case of damage to goods, the cost of repairing the goods will exceed their value after arrival.
LOSSES
PARTICULAR AVERAGE LOSS GENERAL AVERAGE LOSS
PARTIAL LOSS
1. 2. 3.
The three things under risk during the course of voyage are:are:Ship. Cargo The freight( compensation paid for the transportation of goods)
Cont
As a general rule ,any loss to these interest sustained must be borne by that interest alone. For ex: if the ship is carried away by storm, then this loss is P.A.L. and is borne by shipshipowner alone or by the insurance company which has insured the ship. It gives no right of contribution from the other parties interested in the adventure. So, particular average losses are those in which damage is caused by accident in the marine adventure by the peril of sea.
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Comparison between the institute cargo clauses (A), (B) & (C)
A comparative analysis of the institute Cargo Clauses (A), (B) & (C) Type of risks Covered (D) not covered (U) (D (U A
D D D D D D D D
B
D D D D D D D D
C
D D D
D U D D
A
9. Jettison 10. 10. Washing overboard 11. Entry of sea, lake or river water into the vessel, 11. craft, hold, conveyance, container, lift van or place of storage. storage. 12. 12. Rainwater damage 13. 13. Total loss of any package lost overboard or dropped whilst loading or unloading from vessel or craft. craft. 14. Piracy. 14. Piracy. 15. 15. Deliberate damage or destruction by wrongful act of any person or persons, (i.e. by malicious acts) (i. (Can be covered by malicious Damage Clause for I.C.C (B) and (C) upon payment or extra premium) 16. 16. In the event of frustration of the voyage resulting from a risk covered, extra charges incurred in unloading, storing and forwarding to destination D D
B
D D
C
D U
D D
D U
U U
D D D
D U U
U U U
A
17. Reasonable charges for averting or minimizing loss recoverable under this insurance and also those incurred, to pursue recovery rights against carriers, bailees or third parties. parties. 18. 18. Other or extraneous perils all involving a fortuity and from external causes, for example: example: Damage as a result of shifting in heavy weather Improper stowage Rough handling Breakage, leakage, denting, scratching, crushing, crumpling, chipping D Heating sweating Infestation, mould, mildew, rust, county damage Hook and sling damage Contact with mud, oils and acids, damage by other cargo Shortage, theft, pilferage, non-delivery non Other loss/damage caused fortuitously and from external cause or causes
D D D U D D D D D D
U U U U U U U U U U
U U U
U U U U U U
A
19. liability under Both to blame collision Clause of Bill of Lading. Lading. D
B
D
C
D
COMMON EXCLUSIONS
Loss, damage or expenses attributable to willful misconduct of the assured Ordinary or inevitable losses Loss, damage or expense caused by inherent vice or nature of the subject matter insured Loss/damage due to insufficient, unsuitable or defective packing (including stowage) Loss/damage or expenses proximately caused by delay even if the delay is caused by a peril insured against Loss damage or expenses arising from insolvency of the owners, managers, charters or operators of the vessel. Loss damage due to un seaworthiness of the vessel or craft, container, lift van employed for carrying the insured matter. Wars, strikes and civil commotions unless covered under separate endorsements.
E Commerce
E Commerce is the conduct of transactions to buy, sell, or deliver goods and services over the internet. E commerce transactions are B to B,which involves inter firm transactions including government procurement. B to C, between firms and individuals purchasing goods or services over internet. and C to C, involves individual transactions via online auction.
E- business refers to the performance of business activities, such as designing products, managing supply chain, operations, marketing etc. it usually enhances three primary processes: Production process: include procurement, ordering and replenishment of stock, processing of payments, electronic links with suppliers, and production control processes.
Customer focused processes: which include promotional and marketing efforts, selling over internet, processing of customers purchase orders and payments, and customer support and others. Internal management processes: includes employee services, training, internal information sharing, video confrencing and recruiting.
(Electronic Data Interchange): Refers to the exchange of information through computers between organizations in a standard, computer process able, and universally accepted format. Used to eliminate paper work in supply chain management and getting regulatory clearances from government authorities.
Internet:
the internet refers to network of networks Extranet: internet based network between a business enterprise and its suppliers, distributors and business partners. Such systems are replacing EDI systems. Intranet: internal private network to link various divisions of a business.
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