Documente Academic
Documente Profesional
Documente Cultură
A. HULL INSURANCE
Covers physical damage to the ship or vessel. In addition it contains a
collision liability clause that covers the owner’s liability if the ship collides
with another vessel or damages its cargo.
B. CARGO INSURANCE
Covers the shipper of goods if the goods are damaged or lost. The policy
cane be written to cover a single shipment. If regular shipments are made,
an open cargo policy can be used that insures the goods automatically when
a shipment is made. The open cargo policy has no expiration date and
remains in force till it is cancelled.
D. FREIGHT INSURANCE
Indemnifies the ship owner from loss of earnings if the goods are damaged
or lost and are not delivered.
INSURABLE PROPERTY
Insurable property means any ships, goods or other movables exposed to
maritime perils.
VOYAGE
Voyage is the journey that the vessel undertakes.
The ship could carry on the voyage in the specified route which is mentioned
the policy.
The term ‘Perils of the Sea’ refers only to fortuitous accidents or casualties
of the seas and does not include the ordinary action of winds and waves.
b. Collision or contact of vessels, ships, boats with internal and external objects.
k. Loss caused by heating due to the closure of ventilators to prevent the entry
of sea waters.
l. Loss caused by rat’s example, a hole made in the bottom of the ship, through
which sea water enters the ship and damages the cargo.
Marine insurance apart from indemnifying the assured against the maritime
perils also includes liability of the third party incurred by the owner of the
ship or other person interested in the property assured on happening of the
maritime event.
f. Insurance also includes all perils and risks incidental to money, documents,
securities and other valuable goods in the ship.
The clauses are framed in relation to risk covered, risk excluded and other
terms and conditions of insurance.
If either party does not disclose full facts, the other party can avoid the
contract at any time.
CONTRACT OF INDEMNITY
Under the contract, the underwriter agrees to indemnity the insured against
losses by sea risk to the extent of the amount insured.
The insured can recover only the actual loss suffered and nothing more.
PRINCIPAL OF SUBROGATION
According to this principle after meeting the loss agreed, the insurer steps
into the shoes of the insured and becomes entitled to all rights and remedies
available to the insured against the insured properly or third persons.
Express Warranties
The expressly stated written warranties and may be like
1. The ship is safe on a particular day.
2. The ship and goods are neutral and continue to be so.
3. The ship will proceed to its destination without any deviation.
4. The ship will sail on or before a certain dates.
Implied Warranties
There are certain warranties which are implied in every contract of marine
insurance unless excluded expressly. These are:
1. Warranty of sea worthiness.
2. Warranty of non-deviation from path.
3. Warranty as to the legality of the voyage.
4. Proper documentation related to the ship.
What is a Deviation?
1. When the course of the voyage specially designated in the policy, is departed
from or
2. Where the course of the voyage was not specially designated by the policy,
but the usual and customary course is departed from or
3. Where several ports of discharge were specified by the policy, but the ship
did not process to them in the order designated by the policy or
4. Where the policy did not specify the ports of discharge but the ship (which
should have) did not proceed to them in geographical order.
ASSIGNMENT OF POLICY
A marine insurance policy is assignable unless it contains terms expressly
prohibiting assignment.
It may be assigned either before or after loss.
A marine policy may be assigned by endorsement thereon or in any other
customary manner.
RE-INSURANCE
According to Marine Insurance Act, the insurer under a contract of marine
insurance has an insurable interest in his risk and may reinsure the subject
matter fully or partly as per his requirement. This is called as Reinsurance or
insurance of insurance.
In reinsurance, unless the policy provides otherwise, the original assured has
no right or interest in respect of such reinsurance.
CALCULATION OF RATES OF PREMIUM
Calculation of rates of premium depends on:
1. Description of goods: Full description of the goods to be insured must be
given:
The nature of commodity is very important for rating and underwriting.
3. Voyage and Mode if Transit: The name of the place from where, transit will
commence and the name of the place where it will terminate has to be
stated.
Mode of conveyance to be used in transporting goods by rail, lorry or by air,
etc. should be given.
Postal receipt number and date thereof is required in case of goods sent by
registered post.
4. Cover Required: The risk against which cover requires should be fully
described.
5. Name of the Vessel: The correct name of the vessel is necessary, to know the
details of the age, tonnage classification (tanker, bulk carrier, container ships,
fishing fleet, war vessels) ownership etc.
Shipments made by first class vessels attract normal rates of premiums and
the vessels are approved by authorities like the Indian Registrar of Shipping.
If the vessel used for the voyage is tramp vessel example a vessel which does
not follow a fixed schedule and carries cargoes whenever available. The
vessels have to be approved by GIC and if not approved, then will attract a
very high premium.
While there is no tariff rate on premium and insurers can charge any rate
depending upon the nature of goods, the distance, the mode of trans-
shipment, type of package, the voyage route and the past claims experience.
Extended covers like SRCC (Strikes, Riots and Civil Commotion) and war risks
are governed by special regulations and the premium collected is credited to
the Central Government.
Shipping vessels are listed according to their age and draught weight. Full
details of every shipping vessel built anywhere in the world is available in
‘LIOYDS REGISTER’ (issued by LIOYDS OF LONDON). Minimum standards are
fixed. Any vessel falling short of these standards will attract loading premium.
Where the assured has parted with or lost his interest in the subject matter
insured, any subsequent assignment is inoperative.
The assignee who has acquired the beneficial interest in the policy is entitled
to see thereon in his own name.
Transit clause provides with respect to goods, for the risk to attach ‘from the
loading thereof aboard the said ship’ and for the insurance to continue until
the goods are discharged and safely landed at the port of discharge.
Through this clause, the policy does provide otherwise (that means permits
deviation) and the event is held covered.
The liberty to ‘touch and stay’ at any port or place whatsoever does not
authorize the ship to depart from the course of their voyage from the port of
departure to the port of destination.
It provides that if the insured vessel collide with another vessel, the
underwriter agree to pay three quarters of the amount of damage to which
the assured becomes liable.
f. Continuation Clause:
This clause refers that the vessel shall continue to be covered even after the
completion of voyage under the policy at a pro rate premium to their port of
destination.
g. Inch mares Clause or Negligence Clause:
This clause extend the underwriter liability to cover risk of a kind, which are
not included within the ordinary meaning of maritime perils.
This clause provides that liability shall not be exceeding the proportion that
the amount insured bears to the value of the vessels.
In absence of this provision, underwriters would be liable for the full amount
of sue and labour charges even when there was under insurance.
i. Memorandum Clause:
Example, He may find that his commitment on any one vessel or in any
locality have become too burdensome.
He may have accepted a line on ‘all-risks’ terms and then desire to reinsure
in respect to total loss only.
The term ‘perils of the sea’ refers to fortuitous accidents and casualties of
the sea. It does not include ordinary action of the winds and waves.
This clause provides that the insurance is against all risks of loss or damages
to the subject matter insures and the claims are payable irrespective of
percentage of loss.
This clause means that the arrangements in case of General Average Claim
which may arise under the policy, the average settlement made in foreign
country will be adopted as the basis for settlement.
n. Warrior Clause:
In this clause, either partly to the contract may take such steps, or incur such
expenses, as are contemplated under the sue and labour clause, to minimize
a loss without prejudice in the light of the assured on the one hand and the
underwriter on the other.
The general average clause refer to the losses that must be partly borne by
someone other than the owner of the goods that were damaged or lost.
All marine policies coverage for general average claims that may be made
against the insured.
p. Free of Capture and Seizure (FCS):
It means that insurer/ underwriter will not be liable for loss or claim arising
from seizure of ship as a price of war.
In times of war, this clause is inserted unless the insured pays the
underwriters additional premium for war risks.
Insurer is liable only for total loss and not for particular average or partial
loss.
The free of particular average clause provides that no partial loss will be
paid to single cargo interest the loss is caused by certain perils such as
stranding, striking, burning or collision.
MARINE INSURANCE POLICY AND LOSSES
TYPES OF MARINE INSURANCE POLICY
A. BOTTOMRY BOND:
It is repayable after a certain agreed number of days after the arrival of the
ship as specified in the bond.
If the vessel is lost before the arrival at destination, the lender losses his
money.
B. RESPONDENTIA BOND:
The loan is to be repaid within a certain period after the arrival of the cargo
at the destination as specified in the Respondentia Bond.
If the cargo is lost on its way, the lender losses his money.
1. VOYAGE POLICY:
As the name suggest this policy covers a voyage.
This is a policy in which the limits of the risk are determined by place of
particular voyage example Chennai to Singapore, Chennai to London.
Such policies are always used for goods insurance, sometimes for freight
insurance but only rarely nowadays for hull insurance.
2. TIME POLICY:
This policy is designed to give cover for some specified period of time say for
example noon of 1st January 2009 to noon of 1st January 2012.
It is a policy which covers the risk during a particular voyage for a specified
period. Example A ship may be insured for voyage between Chennai to
London for a period of one year.
4. VALUED POLICY:
This policy specifies agreed value of the subject matter insured, which is
not necessarily the actual value. This agreed value is also known as insured
value.
Once agreed these values cannot be changed and remains binding on the
parties
5. UNVALUED POLICY/ OPEN POLICY:
In case of unvalued policy, the value of the subject matter insured is not
specified at the time of effecting insurance.
It is taken for a specified amount and the insurable value is ascertained at the
time of loss.
The insurer is liable to pay only up to actual loss incurred to the policy
amount.
6. FLOATING POLICY:
A floating policy describes the insurance in general terms, leaving the
name of the ship or ships to be defined by subsequent declarations.
The declaration may be made by endorsement on the policy or in another
customary manner.
Declaration must be made in the order of shipment unless the policy provides
otherwise.
I t must comprise all the consignments within the terms of the policy and the
values must be stated honestly.
Errors and omissions however, may be rectified even after the loss has
occurred, if made in good faith.
When the total amount declared exhausts for which the policy has been
issued, it is said to be ‘run off or fully declared’.
The assured may then arrange for a new policy to be issued to succeed the
one about to lapse, otherwise the cover terminates when the policy is fully
declared.
7. WAGERING POLICY/ PPI POLICY:
This policy is issued without there being any insurable interest or policy
bearing evidence that the insured is willing to dispense with any proof of
interest.
Under Section 4 of the Marine Insurance Act, such policies are void in Law
but such policies continue to be common.
In the case of very large vessel, the period may extend over several years.
The insurer is liable for any loss proximately caused by a peril insured against.
The insurer is not liable for any loss attributable to the wilful misconduct of
the assured but unless the policy otherwise provides, he is liable for any loss
proximately caused by a peril insured against even though the loss would not
have happened but for the misconduct or negligence of the Master or Crew
of the Ship.
Unless the policy otherwise provides, the insurer is not liable for ordinary
wear and tear, ordinary leakage and breakage, inherent vice or nature of
subject matter insured or for any loss proximately caused by rat or vermin or
any injury to machinery not caused by maritime perils.
TYPES OF MARINE LOSSES
MARINE
LOSSES
A. TOTAL LOSS:
A ship having ceased to exist after a casualty, either due to being
irrecoverable (actual total loss) or due to being subsequently broken up
(constructive total loss) (LMIS, 1995). The constructive total loss occurs when
the cost of repair exceeds the insured value of the ship.
c. When the ship concerned in the adventure is missing and after the lapse of a
reasonable time period, still no news of it is received.
d. In case of Actual Total Loss, the insurer has to pay either the insured amount
or the actual loss whichever is less but the cause of the loss must be one of
the perils insured against.
CONSTRUCTIVE TOTAL LOSS:
Constructive total loss is said to have occurred.
b. In the case of damage of goods, where cost of repairing the damage and
forwarding the goods to their destination would exceed their value.
d. Effect of Constructive Total Loss: When there is a constructive total loss, the
assured may either treat the loss as a particular loss or abandon the subject
matter insured to the insurer and treat the loss as if it were an Actual Total
Loss.
NOTICE OF ABANDONMENT:
When the notice of abandonment is properly given, the rights of the assured
are not prejudiced by the fact that the insurer refuses to accept the
abandonment.
EFFECT OF ABANDONMENT:
b. Money is paid to pirates for the purpose of saving the ship and cargo.
c. Expenses incurred due to outside help taken in making vessel reach its
destination.
d. The liability of General Average extends to the owner of the ship, the cargo
and the freight.
YORK ANTWERP RULES
The association for reform and codification of the law of nature meet at
Antwerp in 1877, where code of rules were adopted and known as ‘York
Antwerp Rules’. The rules were further revised in 1890 and 1924.
These rules deal only with certain specific method relating to General
Average Loss and further provided that in case of matters not included in
the rules, which should be dealt with according to the law and practice of
the court of destination.
CLAIM DOCUMENTS