MARINE INSURANCEMARINE INSURANCE

MARINE INSURANCE

• Definition – assurer:

– insured:

Perils

• Perils– the sea and damage:

– fire

– errors of navigation– jettison

Perils

– war,riots:

– pilferage:– willful misconduct of master or crew– breakage

Perils

• Exclusions (types of loss excluded):

INSURANCE & INCOTERMS

• Who InsuresExporter Insures Importer Insures

TYPES OF MARINE INSURANCE

• TWO TYPES OF POLICIES:– Simple– Open Policy:

• shipper’s advantages

• to the underwriter

ADJUSTMENT OF CLAIMS

• The Adjustment– in cases of total loss:– Particular Average:

– Example Total invoice $1,000

Insured For 1,000

Invoice Value of Loss 50

Insured in proportion (110%) 55

ADJUSTMENT OF CLAIMS

• General Average

General Average

• Illustration:

General Average

• EXAMPLE

Mkt Value of jettisoned cargo:$20,000

Cost of hull $50,000and engine repairs:

Salvage vessel svcs: $70,000

Disbursements at port $35,000Total Vessel Sacrifice 155,000

General Average

Total to be allowed or to be

made good in general average: $175,000

Value of Cargo (plus sacrifice) 100,000

Value of Vessel (plus sacrifice) 400,000

Total Contributory values $500,000

Rate of General Average 35%

General Average

• The cargo and the vessel will each contribute

General Average

Pays Contribution of Receives Balance

Owed

Cargo $35,000 $20,000 $15,000

Vessel$140,000 $155,000 $15,000

If cargo insured: $0 If uninsured:

TERMS AND CONDITIONS OF COVERAGE

Free From Particular Average (FPA)

TERMS AND CONDITIONS OF COVERAGE

With Average

BASIC CONDITIONS

All Risk

Containerization & Marine Insurance

Problems with Containers

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