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Marine Insurance Act Marine Insurance Contents of an Insurance Policy Perils of The Sea Types of Marine Insurance Policy Aviation Insurance

Marine Insurance Act

Implied condition as to commencement of risk. (1) Where the subject-matter is insured by a voyage policy "at and from" or "from" a particular place, it is not necessary that

the ship should be at that place when the contract is concluded, but there is an implied condition that the adventure shall be commenced within a reasonable time, and that if the adventure be not so commenced the insurer may avoid the contract.

The implied condition may be negatived by showing that the delay was caused by circumstances known to the insurer before the contract was concluded, or by showing that he waived the condition.

Where the place of departure is specified by the policy, and the ship instead of sailing from that place sails from any other place, the risk does not attach.

Sailing for different destination.

Sailing for different destination. Where the destination specified in the policy, and the ship, instead of sailing for that destination, sails for any other destination, the risk does not attach.

(1) Where, after the commencement of the risk, the destination of the ship is voluntarily changed from the destination contemplated by the policy, there is said to be a change of voyage.

(2) Unless the policy otherwise provides, where there is a change of voyage, the insurer is discharged from liability as from the time of change, that is to say, as from the time when the determination to change it is manifested; and it is immaterial that the ship may not in fact have left the course of voyage contemplated by the policy when the loss occurs.

In the case of a voyage policy, the adventure insured must be prosecuted throughout its course with reasonable dispatch, and, if without lawful excuse it is not so prosecuted, the insurer is discharged from liability as from the time when the delay became unreasonable.

When premium payable. Unless otherwise agreed, the duty of the assured or his

agent to pay the premium, and the duty of the insurer to issue the policy to the assured or his agent, are concurrent conditions, and the insurer is not bound to issue the policy until payment or tender of the premium.

Where the ship concerned in the adventure is missing, and after the lapse of a reasonable time no news of her has been received, an actual total loss may be presumed.

Particular average loss. (1) A particular average loss is a partial loss of the subject-

matter insured, caused by a peril insured against, and which is not a general average loss.

(2) Expenses incurred by or on behalf of the assured for the safety or preservation of the subject matter insured, other than general average and salvage charges, are called particular charges. Particular charges are not included in particular average.

Marine insurance is a Insurance coverage for goods in transit and the vehicles of transportation on waterways, land, and air.

• Marine Insurance is Governed by The Marine Insurance Act, 1963The insurance act 1938 and The Insurance Rules 1939.

• It is an Insurance Cover for Marine Cargo, Air Cargo and Post Parcels.

• The Purpose of Cargo Insurance is to Protect goods against physical loss or damage during transit.

Indemnify Insurance

Company(Insurer)

The Owner(Insured)

Utmost good faith Insurable interest Indemnity Doctrine of proximate cause

The insured should give full information about the subject to the insured. He should not withhold any information.

If a party does act in good faith, the other party is at liberty to cancel the contract.

Insurable interest means that the insured should have interest in the subject when it is to be insured.

He should be benefited by the safe arrival of commodities and he should be prejudiced by loss or damage of goods.

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• This principle means that the insured will be compensated only to the extent of loss suffered.

• He will not be allowed to earn profit from marine insurance .

• The underwriter provides to compensate the insured in cash and not to replace the cargo or the ship.

• The money value of the subject-matter is decided at the time of taking up the policy. Sometimes the value is calculated at the time of loss also.

This is a Latin word which means the nearest or proximate cause.

It helps is deciding the actual cause of loss when a number of causes have contributed to the loss.

If the proximate cause is insured against, the insurer will indemnify the loss.

Insurance Policy -all terms and conditions

Certificate of Insurance: › evidence of Insurance , › also known as Cover Note

Insurance Broker’s Note

i) The name insured, or of some person who effects the insurance on behalf of the insured.

ii) The subject matter insured and the risk insured against losses.

iii) The voyage or period of time or both, as the case may, covered by the insurance;

iv) The sum or sums insured.v) The name or names of the insurer or

insurers.

• Shippers/Exporters• The buyer

Three main types of sales of goods in overseastrade:1. CIF – Shipper/exporter has to take the

insurance on the goods2. CFR – Buyer has to effect insurance3. FOB – Buyer has to effect insurance

Freely assignable (transferable) A Marine (Cargo) Insurance Policy can be

assigned either before or after the loss. The assignment is done by endorsement

and delivery. Insurable interest of the claimant must

exist at the time of loss of the cargo. The value of the insurance policy is the

sum agreed between the insured and the insurer.

• The contract of marine insurance is a contract of commercial indemnity.

• The duration of the marine insurance policy is based on the institute cargo clause.

• Provision to include period of transit, time of discharge of the goods and time of arrival of the goods.

Time duration of the policy:-Upto 30 days after arrival of the goods in case

of air shipments.-Upto 60 days after arrival of shipments by sea.

Institute cargo clause A

Institute cargo clause B

Institute cargo clause C

War and Strikes, Riots and Civil Commotion (SRCC) Clause

The policy covers loss of or damage to the goodscaused bya) Fire or Explosionb) Stranding, grounding, sinking or capsizing of

the vesselc) Overturning or derailment of land conveyanced) Collision or contract of vessel, craft or

conveyance with any external object other than water.

e) Discharge of cargo at a port of distress f) General average sacrificeg) Jettison

The policy will not cover the following risks:

a) Loss, damage or expense caused by delay and inherent vice or nature of the subject matter.

b) Loss, damage or expense attributable to willful misconduct of the insured.

c) Ordinarily leakage, ordinarily loss in weight or volume, or ordinary wear and tear of the subject matter insured.

d) Insufficiency or unsuitability of packinge) Deliberate damage to or deliberate

destruction of the goods.f) Loss, damage or expense arising from

insolvency or financial default of the owners, managers, characters or operators of the vessel.

g) Loss, damage or expense arising from the use of atomic weapons

In addition to the risks covered under Institute

Cargo Clause (C ), the following risks are covered

a) Loss of or damage to the goods attributable to earthquake, volcanic eruption or lighting.

b) Washing overboardc) Damage caused by entry of sea, lake or

river water into vessel, place of storage.

d) Any package lost overboard or dropped whilst loading onto, or unloading from, vessel or craft.

This Policy does not cover the excluded risks mentioned under Institute Cargo Clause (C )

Covers all risks of loss of or damage to the goods insured and is the widest cover.

This policy will not cover the risks excluded under Institute Cargo Clause (C ).

Extension to the Policy issued on Institute Cargo Clause (B) to cover any or all the following extraneous perils.

a) Theft, pilferage and non-deliveryb) Rain or river water damagec) Hook, oil, mud, acid and damage by other cargod) Heating and sweatinge) Breakage, denting, chipping, scratching and

blendingf) Leakageg) Bursting and tearing

The shipper/exporter can obtain war, riots, strikes and civil commotion cover along with all the three types of policies by payment of an additional premium.

The shipper/exporter need to attach Institute War Clause (Cargo) and Institute Strike Clause (Cargo) to the policy of insurance.

The term “Perils of the Sea” refers only to fortuitous accidents or casualties of the sea

Does not include ordinary action of winds and waves.

Perils of the sea are also called “Maritime Perils”

Pilferage

Jettisoning

Barratry

Sinking , stranding and grounding of ship

• Collision or contact of vessels

• Discharge of cargo at the port of distress

• Dropping of packets during loading and unloading while on board or off the board

• Strikes, Lockouts , Civil commotion and terrorism

• Loss caused by heating

• Loss due to rats

• Wars and other perils like cyclones, typhoons and spirals

General Average Loss1. It is incurred for the

benefits of all parties.2. It is always done

voluntarily and is reasonably incurred.

3. General Average is shared by all those who are benefited by the Average Act.

4. It includes expenditure and sacrifice along with loss.

Particular Average Loss1. It is in connection with

any of the parties.2. It is accidental and

fortuitous.

3. It is paid by the insurers.

4. It results from an accident or normal perils of the sea.

Marine Insurance covers the loss or damage of ships, cargo, terminals, and any transport or property by which cargo is transferred, acquired, or held between the points of origin and final destination.

In a contract of marine insurance,the insured must have insurable interest in the subject matter insured at the time of the loss

Voyage policy› subject matter is insured for a particular voyage

irrespective of the time involved in it› usually not exceeding 12 months say from

January 1, 1981 to December 31, 1981› This policy is most suitable for hull insurance

Time policy› subject matter is insured for a definite period of

time› continuation clause

risk shall be covered until the voyage is completed, or till the arrival of the ship at the port of call

Mixed policy› a combination of voyage and time policies and covers the

risk during particular voyage for a specified period of time

Valued policy› value of the subject matter insured is agreed upon

between the insurer and the insured and it is specified in the policy itself

› cargo value = the cost of goods

+ freight and shipping charges+ 10% to 15% margin for anticipated profit

› The said value may be more than the actual value of goods

Open or Un-valued policy› value of the subject matter insured is not specified› Where the value of the subject matter of insurance

is not declared but left to be ascertained and proved later it is called unvalued policy

Floating policy› relatively large sum by the regular suppliers of

goods› covers several shipments › This policy is most situated to exporter in order to

avoid trouble of taking out a separate policy for every shipment

Builder's risk policy› This policy is issued for more than one year› This covers the risk of damage to vessels from

the time its construction commences until its trail is completed.

Port risk policy › This policy covers all the risk of a vessel while it

is standing at a port for particular period of time.

Special hazards policy› This policy covers special risks incident to piracy and

war› It provides protection to insured under agreement

against seizure, capture, detention and other war risks

Composite policy› This type of policy is purchased from more than one

under writers› If there is no any motive of fraud then insured will be

indemnified by each under writer separately in case of loss

Insurance

Aviation Insurance

Directly related to

Policy Covers

Hull "ALL Risks"

Pertains to chances of physical loss or damage to the aircraft. The term "all risks“ ;the term is not subjected to any kind of consequential loss, or loss of use and delay. The term addresses to the restoration of the aircraft to its previous condition before the loss. There is no option for replacement under such an agreement.

Hull Total Loss Only Cover

Hull total loss only cover is subjected solely to total loss of the aircraft and is particularly formed for the old aircrafts as the condition of such are very poor and are insured for low amount the premium of which would also be very low. The proportion of partial losses to total losses in case of such aircraft is very inadequate

• Liability Insurance

Liability is basically categorized in two aspects

• In regard of passengers, baggage and cargoes carried on the aircraft.

• Aircraft Third Party Liability - the liability for any sort of property damage or to the people outside the aircraft

The exceptions of Liability insurance are:

Any kind of loss incurred by the own property of the insured.

War and allied risks associated with it.

• GIC of India has emerged as a significant aviation (re)insurance underwriter in the years following WTC loss.

• Among the fraternity of about 40 underwriters worldwide, GIC of India perhaps ranks statutory cessions of 5% on each and every policy of Indian airline operators for all types of insurance covers while simultaneously offering significant capacities for major airlines of the world.

• On the general aviation side, GIC Re capacities are INR 50 crore for hull and USD 150 Mln for liability.

• This high liability limit facilitates absorption of liability limits of the business jets flying into and over European Union air-space.

• GIC Re has also significant capacities for Hull War Cover (excluded from the Hull All Risk Cover) going right up to USD 40 Mln for Indian and SAARC aviation accounts.