MARINE

INSURANCE

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Meaning & Definition:
Marine insurance covers the loss or damage of ships, cargo, terminals, and
any transport or cargo by which property is transferred, acquired, or held
between the points of origin and final destination.
An insurance policy that protects the buyer of a good being transported over
water from the loss of that good. Most of the time either the buyer or the
seller is required to purchase marine cargo insurance (or at least to assume
the risk of transit); their specific agreement determines which one is
responsible. See also: Incoterm.
Cargo insurance—discussed here—is a sub-branch of marine insurance,
though Marine also includes Onshore and Offshore exposed property
(container terminals, ports, oil platforms, pipelines); Hull; Marine Casualty;
and Marine Liability.
Origins of formal marine insurance
Maritime insurance was the earliest well-developed kind of insurance, with
origins in the Greek and Roman maritime loan. Separate marine insurance
contracts were developed in Genoa and other Italian cities in the fourteenth
century and spread to northern Europe. Premiums varied with intuitive
estimates of the variable risk from seasons and pirates.
The modern origins of marine insurance law in English law were in the law
merchant, with the establishment in England in 1601 of a specialized
chamber of assurance separate from the other Courts. Lord Mansfield, Lord
Chief Justice in the mid-eighteenth century, began the merging of law
merchant and common law principles. The establishment of Lloyd's of
London, competitor insurance companies, a developing infrastructure of
specialists (such as shipbrokers, admiralty lawyers, and bankers), and the
growth of the British Empire gave English law a prominence in this area
which it largely maintains and forms the basis of almost all modern practice.
The growth of the London insurance market led to the standardisation of
policies and judicial precedent further developed marine insurance law. In
1906 the Marine Insurance Act was passed which codified the previous
common law; it is both an extremely thorough and concise piece of work.
Although the title of the Act refers to marine insurance, the general
principles have been applied to all non-life insurance.

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In the 19th century, Lloyd's and the Institute of London Underwriters (a
grouping of London company insurers) developed between them
standardised clauses for the use of marine insurance, and these have been
maintained since. These are known as the Institute Clauses because the
Institute covered the cost of their publication.
Within the overall guidance of the Marine Insurance Act and the Institute
Clauses parties retain a considerable freedom to contract between
themselves.
Marine insurance is the oldest type of insurance. Out of it grew non-marine
insurance and reinsurance. It traditionally formed the majority of business
underwritten at Lloyd's. Nowadays, Marine insurance is often grouped with
Aviation and Transit (ie. cargo) risks, and in this form is known by the
acronym 'MAT'.

Marine Insurance Act, 1906

Main article: Marine Insurance Act 1906
The most important sections of this Act include:
s.4: a policy without insurable interest is void.
s.17: imposes a duty on the insured of uberrimae fides (as opposed to
caveat emptor); ie. that questions must be answered honestly and the
risk not misrepresented.
s.18: the proposer of the insurer has a duty to disclose all material
facts relevant to the acceptance and rating of the risk. Failure to do so
is known as non-disclosure or concealment (there are minor
differences in the two terms) and renders the insurance voidable by
the insurer.
s.33(3): If [a warranty] be not [exactly] complied with, then, subject to
any express provision in the policy, the insurer is discharged from
liability as from the date of the breach of warranty, but without
prejudice to any liability incurred by him before that date.
s.34(2): where a warranty has been broken, it is no defence to the
insured that the breach has been remedied, and the warranty complied
with, prior to the loss.
s.34(3): a breach of warranty may be waived (ie. ignored) by the
insurer.

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s.39(1): implied warranty that the vessel must be seaworthy at the start
of her voyage and for the purpose of it (voyage policy only).
s.39(5): no warranty that a vessel shall be seaworthy during the policy
period (time policy). However if the assured knowingly allows an
unseaworthy vessel to set sail the insurer is not liable for losses caused
by unseasworthiness.
s.50: a policy may be assigned. Typically, a ship owner might assign
the benefit of a policy to the ship-mortgagor.
ss.60-63: deals with the issues of a constructive total loss. The insured
can, by notice, claim for a constructive total loss with the insurer
becoming entitled to the ship or cargo if it should later turn up. (By
contrast an actual total loss describes the physical destruction of a
vessel or cargo.)
s.79: deals with subrogation; ie. the rights of the insurer to stand in the
shoes of an indemnified insured and recover salvage for his own
benefit.

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What Is Marine Insurance?
Marine insurance is a type of insurance that covers boats and ships, as well
as their cargo and in some instances the places where the boat or ship is
docked. It has a colorful history, beginning informally in England during the
17th century. In 1906, the Marine Insurance Act was passed under British
law, creating a standard operating procedure for policies that dictates the
world's policies to this day. The standards set forth by the act are considered
reasonable, but due to changes in technology and social standards, the act is
generally seen as obsolete and is being replaced by more modern legislature.
There are several varieties of insurance that can be taken out by a boat or
ship owner. Marine cargo insurance covers whatever goods the boat is
carrying. Inland marine insurance can be procured for floating vessels that
are not ocean-bound, but travel primarily on lakes, rivers and reservoirs.
There are also more general policies that cover the boat itself and its
passengers, liability for damages to other moving vehicles and liability
during an encounter with a non-moving object. These all fall under the
heading of a marine insurance policy.
A private ship owner who uses his large boat for pleasure cruising in a
marina may wish to take out inland marine insurance, as well as specialty
yacht insurance. A merchant ship sailing in politically unsure waters may
find it necessary to take out cargo insurance as well as a specific war policy
that protects the boat and goods in the event of unfriendly actions. Marine
insurance is often available through general insurance companies, and many
car insurance dealers offer discounts to those who pay for more than one
policy through their company. There are also dealers who work singularly in
this area and only offer marine boat insurance. Policies can be broken down
to cover only the boat, only the cargo, or both; most do not include coverage
of objects on the boat that are not required for the ship's operation, such as
computers, cell phones, or other types of valuables.
The rates of a marine insurance company vary depending upon the type of
boat, size of boat, use of boat and the owner's current insurance history.
Some policies may have stipulations on what they will and will not cover,
and how much of the damages the owner of the boat is required to pay out of
pocket. As with other types of insurance, it is almost always best to look at
more than one policy before deciding on which to buy. Purchasers should be
aware that the necessity for watercraft insurance varies by country and
region.

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What Is Inland Marine Insurance?
Inland marine insurance is an insurance instrument which is designed to
protect property while in transit, along with high-value mobile items like
silverware and tools. Despite the rather peculiar name, inland marine
insurance is actually a very useful type of insurance, and it is commonly
recommended to business owners, especially people who need to travel for
work or people who work with high-value items. Many insurance companies
offer this type of policy, and can discuss options with their clients. This type
of insurance is typically purchased as a supplement to an existing insurance
policy.
The origins of this type of insurance allegedly started with Lloyd's of
London, a venerable provider of insurance which dates back to the 17th
century. Lloyd's initially insured the cargo of ships, holding policyholders
responsible for whatever happened to their goods on land. Eventually,
coverage expanded to include cargo after it had been offloaded, with inland
marine insurance covering cargo in transit, storage, or holding, providing
more complete coverage to policyholders. Today, inland marine insurance is
often used by people who are nowhere near the ocean and have no intention
of carrying anything by ship.
Commercial insurance usually covers a specific premises. Inland marine
insurance applies to the goods and property associated with someone's job,
wherever they might be. When a contractor's tools are stolen out of a truck
or off a work site, they would be covered by inland marine insurance.
Likewise, goods damaged in transit across dry land could be covered by this
type of insurance. People can also cover individual buildings and other types
of property with this type of insurance.
Insurance agents may recommend inland marine insurance to fill gaps in
coverage, ensuring that someone is totally covered in the event of a problem.
For example, many things covered by this type of insurance are specifically
excluded in conventional insurance policies, like jewels, for example.
Having inland marine insurance as a “floater” policy can protect people from
losses. This type of insurance is also not restricted to commercial customers.
When shopping for any kind of insurance policy, people should take note of
the deductible and any restrictions on the policy. They can choose between
named peril policies, in which everything covered by the policy is
specifically cited by name, or all-risks insurance, in which anything

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excluded from the policy is specifically stated. For example, an all-risks
policy might indicate that it would not cover losses caused by negligence,
suggesting that it will cover everything else, from hurricanes to fires.

What Is Ocean Marine Insurance?

Ocean marine insurance is insurance used to protect cargo, vessels and other
items while they are being transported across the ocean. Both the vessel
owner and the owner of the cargo are able to benefit from this type of
insurance. Ocean marine insurance is not limited to ships, but can also cover
items traveling by air and land as well. Since the cargo is being moved
through international territories, this insurance is not regulated by any
particular countries.
There are different types of dangers that cargo may face when being
transported from one country to another. Goods can be damaged while they
are being loaded on or off the vessel. In addition, they can be broken en-
route. People, including passengers and staff, can be injured, and the vessel
itself can also be damaged. To protect against this, the vessel owner or the
owner of the cargo can get different types of ocean marine insurance to
compensate him in case of these damages.
Many types of ocean marine insurance exist: hull insurance, cargo insurance,
and protection and indemnity (P&I) insurance. Each of these types of
insurance covers something different. Hull insurance covers the vessel and
machinery if they get damaged. Many times the coverage will include
coverage for damage caused by stranding, sinking, fire, and collision. The
insurance can be written for an individual voyage or can be written to cover
a period of time.
Cargo insurance is used to protect the actual cargo that is being shipped.
This type of ocean marine insurance can be either specific — covering
certain damage — or all risk — covering a variety of incidences. Cargo
insurance can also be special or open-ended. Special insurance is bought on
a transaction to transaction basis. In contrast, open-ended insurance covers
the cargo from where it is picked up to where it is going and is the most
common type.
In order to protect the vessel’s owners against liability, protection and
indemnity insurance can be bought. Protection and indemnity insurance is a
kind of ocean marine insurance that covers liability due to damage to the

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cargo, death and injury to people, damage to piers, underwater cables, and
other such items. Ocean marine insurers can also offer policies to cover
pleasure crafts. This type of insurance can be referred to as yacht policies.
Yacht policies from ocean marine insurers are usually used to cover larger
vessels, while smaller vessels are mainly covered by inland marine insurers.
Various policies are also available to cover miscellaneous items associated
with shipping. Some of these items are piers, docks, marinas, shipyards, and
repair facilities. In addition, there are some incidences that are usually
excluded for coverage under ocean marine insurance policies. Examples of
such incidences are strikes, riots, acts of war, and confiscation. It is possible,
however, to have these things covered by endorsements.

How Do I Choose the Best Maritime Insurance?

Choosing the right maritime insurance could be crucial to protecting your
investment if something were ever to happen to your personal watercraft,
yacht, commercial boat or other seafaring vessel. It is important to ensure
that any insurance claim will get paid. To do so, you should investigate and
choose wisely from among the coverage options and from the many
maritime insurance companies and agents that are available. Some things to
consider include the type of maritime insurance coverage that you need, how
much coverage you need and the financial strength of the insurance
companies that you are considering. You also can consult with an insurance
professional for advice about which type of maritime insurance would be the
best for you.
The first step in the purchasing process is figuring out exactly what type of
maritime insurance meets your needs. Vessels for personal use can fit under
various subcategories of boat insurance, such as small boat, yacht, mega-
yacht, high-performance and personal watercraft such as jet skis. Insurance
for commercial vessels includes coverage for cargo, commercial hull, marine
liability, yacht club and dealer. Each of these insurance products suits a
different need, which might or might not match your needs. For instance,
cargo coverage would pay out for cargo damage or loss, whereas liability
coverage would pay for marine repairs to another vessel if you are held
liable for its damages.
Not only do you need to know which maritime insurance product suits your
needs, you should decide how much protection is required. As with any type

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of insurance, marine products can be bought to certain limits of how much
they will pay out for a claim and at certain deductibles. This calculation is a
matter of how much risk you want to be responsible for versus how valuable
your boat or cargo is. If you do not like taking risks, buy the amount of
insurance to cover the full value but with the lowest deductible. Of course,
though, the more maritime insurance you buy, the higher its premium, or
price.
The appropriate insurance professional can help you make these decisions.
Maritime insurance is a specialty. The best choices for both an insurance
company and the agent could be those with more experience working in this
particular field. These professionals most likely have sold boat or cargo
insurance to clients such as yourself, and they can better gauge what would
meet your needs. What’s more, experienced marine insurers and agents
typically employ veteran insurance claims staff members who can best assist
you if cargo loss occurs or if boat repairs are necessary.
Another important factor to consider is the financial strength of the maritime
insurance companies you’re considering. A financial rating from an
accredited agency is a good indicator. If an insurance company’s rating is
high, it is more likely to be around when you need it to pay a claim. A less-
reputable insurer, on the other hand, might offer cheaper prices but could be
out of business by the time an accident occurs.

Who are the Merchant Marines?

Almost every nation has a merchant marine, a fleet of ships which are
usually owned and registered in that nation and fly under its flag, but are
separate from the military. The merchant marine carries goods and people,
and is a vital part of the national economy. In addition, many countries use
their merchant marine to supplement the military in times of war, with the
merchant marine transporting goods and equipment to areas where it is
needed. For this reason, the merchant marine is sometimes called the
merchant navy, indicating the dual role of the merchant marine.
The people who staff the merchant marine are known as merchant marines,
and while some have served in the military as well, most have chosen a
career as merchant marines. The merchant marines are usually well trained,
dedicated men and women who have ranks and procedures just like
members of the military do. Many merchant marines have served during

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periods of war, and have been recognized and decorated for services to their
home governments.
Merchant marines have a system of ranks and specialties which closely
correlates to that of the military. Some merchant marines specialize in a
particular field, such as navigation, communications, or heavy equipment
operations. Others attend a merchant marine academy to begin careers as
officers. Most merchant marines intend to remain in the merchant marine for
the duration of their careers, and many companies provide benefits and
incentives to encourage their staff to continue serving.
Most governments recognize the importance of the merchant marines to the
economy and safety of the nation, and therefore supervise a Merchant
Marine Academy. In the United States, the Merchant Marine Academy has
been run by the government since 1943. Graduates of the academy have
taken part in conflicts such as Vietnam and the Gulf War, in addition to
serving as merchant marines on their home ships.
In general, to be considered a member of a nation's merchant marine, a ship
must fly that nation's flag. Some ships may have foreign registration, but
choose to fly under the flag of another nation for various reasons. The staff
may be of mixed nationalities, although generally the officers represent the
nation whose flag is flown. Depending on the country, some of the merchant
marines may have military training as well as nautical training.
Merchant marines also rely on an extensive ground network, which includes
shipyards, truck and train systems, and ground staff who manage the
company. When marine insurance companies, lawyers, research companies,
and a variety of other industries related to the merchant marine are added, it
represents a sizable portion of the economy, with ships being a crucial part
of the transportation system.

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What Are the Marine Corps Reserves?
The United States Marine Corps Reserves is a component of the United
States Marine Corps. This organization consists of corpsmen who perform
duty one weekend each month, along with a two-week annual training
period each year. They train at a military facility during these times, to
prepare themselves for a call to active duty.
The Marine Corps Reserves is composed primarily of prior active-duty
Marines who have time remaining on their enlistment contracts, yet have
served their required active-duty time. The primary function of the reserve
components of the United States military is to support the active troops
during a time of national emergency. This means that a Marine Corps
reservist may be deployed to a war zone or mobilized state-side if needed.
Members of the Marine Corps Reserve must maintain the same levels of
physical fitness as that of active-duty Marines. They must also meet the
requirements for height and weight established by Marine Corp regulations.
They are responsible for properly maintaining and wearing their uniforms
during periods of official duty. Reservists must also be properly groomed
while in uniform. This means that a Marine's hair must be within
regulations, unauthorized jewelry is not permitted, and males are clean-
shaven.
Individuals who are members of the Marine Corps Reserves receive pay and
allowances for attending weekend drills and annual training periods. This
amount will be based upon the service members rank and his time in service.
Members are also eligible for medical and dental insurance, life insurance,
and a thrift savings program. Such service personnel also have Post
Exchange and commissary shopping privileges while they are members of
the reserve component. When called to active duty, Marine reservists receive
the same pay and benefits as their active-duty counterparts.
Marine Corps Reservists receive promotions just like their active-duty
counterparts. They are also eligible for retirement benefits after 20
qualifying years of service. Unlike retirement from active military service,
however, reserve retirement pay is not be issued until the retiree reaches 60
years of age.

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Members of the United States Marine Corps Reserve play a vital role in the
security and defense of America. They provide strength to deploying units
who would otherwise have a lack of personnel available to perform the
mission. The Marine Corps Reserves have played a huge role in many major
conflicts throughout the nation's history. Many are currently serving in the
Global War on Terrorism, where some have even paid the ultimate sacrifice
of perishing in battle.

What Does a Marine Surveyor Do?

A marine surveyor is an individual that inspects boats, ships, and other water
vessels. The job requires an evaluation of these vessels to ensure that federal
and international boating requirements are met. In the case of a boating
accident, the marine surveyor is often called upon by law enforcement to act
as an investigator and piece together details of the accident. This individual
is also frequently employed by insurance companies to examine the extent of
damage to any vessel involved in an accident.
An individual who works as a marine surveyor must have great oral and
written communication skills. He or she has to communicate with many
individuals involved in a large survey project and is required to write a
detailed report on the findings of the survey. This is a job where each survey
situation is potentially unique. He or she must have enough boating expertise
and experience to adapt to each new situation presented.
When a ship is being manufactured, a marine surveyor is brought in to
monitor the development process. In addition, a yearly survey is often
performed on each vessel. When a significant storm causes damage to a
vessel, this individual is hired to detail the damage. A marine surveyor is
also used to evaluate a vessel immediately before a sale. He or she can help
buyers get top value on their purchases.
A marine surveyor must have good mathematics and measuring skills
because he is often hired to measure vessels for the amount of weight they
can sustain. This is a crucial ability, as a vessel carrying too much cargo
weight can run into great problems on the water. On the other hand, if the
vessel capacity is underestimated, then there will be a lot of wasted space
that could have been used for cargo. A marine surveyor is commonly called
upon for salvaging purposes as well. If significant damage has been done to

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a vessel, then this individual can determine which parts of the vessel can be
saved and reused.
During an inspection, the hull is typically the first part examined to ensure
the boat can be properly used on the water. Other parts of the vessel,
including sea valves, rudders, and propellers, are also essential to examine.
These important parts are usually evaluated in a methodical and painstaking
fashion. The on-board machinery and electrical equipment is tested to
measure vessel response and maintain utmost safety. The job of the marine
surveyor requires a lot of work and much expertise in the various aspects of
a water vessel.
Protection and indemnity
Main article: Protection and indemnity insurance
A marine policy typically covered only three-quarter of the insured's
liabilities towards third parties. The typical liabilities arise in respect of
collision with another ship, known as 'running down' (collision with a fixed
object is an 'allusions'), and wreck removal (a wreck may serve to block a
harbour, for example).
In the 19th century, ship-owners banded together in mutual underwriting
clubs known as Protection and Indemnity Clubs (P&I), to insure the
remaining one-quarter liability amongst themselves. These Clubs are still in
existence today and have become the model for other specialised and
uncommercial marine and non-marine mutuals, for example in relation to oil
pollution and nuclear risks.
Clubs work on the basis of agreeing to accept a ship owner as a member and
levying an initial 'call' (premium). With the fund accumulated, reinsurance
will be purchased; however, if the loss experience is unfavorable one or
more 'supplementary calls' may be made. Clubs also typically try to build up
reserves, but this puts them at odds with their mutual status.
Because liability regimes vary throughout the world, insurers are usually
careful to limit or exclude American Jones Act liability.

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Warranties and conditions
A peculiarity of marine insurance and insurance law generally, is the use of
the terms condition and warranty. In English law, a condition typically
describes a part of the contract that is fundamental to the performance of that
contract, and, if breached, the non-breaching party is entitled not only to
claim damages but to terminate the contract on the basis that it has been
repudiated by the party in breach. By contrast, a warranty is not fundamental
to the performance of the contract and breach of a warranty, whilst giving
rise to a claim for damages, does not entitle the non-breaching party to
terminate the contract. The meaning of these terms is reversed in insurance
law. Thus, the Marine Insurance Act 1906 refers to implied warranties, one
of the most important of which is that the vessel is seaworthy.

Choose The Best Marine Insurance Providers In India:

Insurance Guide
Marine Insurance, it must be understood 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. Its value
therefore can easily be understood. It is especially critical for fishing
industry for it is extremely unlikely that the sea would not turn choppy and if
it so happens which invariably happens there is every likelihood that there
would be huge loses both of material and of men. It is here that marine
insurance comes handy as it ensures that in case of any such nasty events the
loss at least of property would be borne by the insurance companies.

The popularity of marine insurance can be gauged from the fact that today
there are a large number of insurance companies that provide marine
insurance. However, it is advised that people do a thorough research before
opting for the policy of any company. This is an extremely monumental job
as there are a number of companies that offer marine insurance so it is
difficult to properly research them. It is here that Jai Insurance Brokers, a
highly reputed name in the field of insurance sector, swings into action. It

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has the list of all such reputed and credible insurance companies that provide
marine insurance on its website.

Marine Insurance

A contract of marine insurance is an agreement whereby the insurer

undertakes to indemnify the assured, in the manner and to the extent agreed,
against losses incidental to marine adventure. There is a marine adventure
when any insurable property is exposed to maritime perils i.e. perils
consequent to navigation of the sea. The term 'perils of the sea' refers only to
Accidents or causalities of the sea, and does not include the ordinary action
of the winds and waves. Besides, maritime perils include, fire, war perils,
pirates, seizures and jettison, etc.
There are four types of marine insurance:-
• Hull Insurance:- covers the insurance of the vessel and its equipment
i.e. furniture and fittings, machinery, tools, fuel, etc. It is affected
generally by the owner of the ship.

• Cargo Insurance: - includes the cargo or goods contained in the ship

and the personal belongings of the crew and passengers.

• Freight Insurance: - provides protection against the loss of freight. In

many cases, the owner of goods is bound to pay freight, under the
terms of the contract, only when the goods are safely delivered at the
port of destination. If the ship is lost on the way or the cargo is
damaged or stolen, the shipping company loses the freight. Freight
insurance is taken to guard against such risk.

• Liability Insurance:- is one in which the insurer undertakes to

indemnify against the loss which the insured may suffer on account of
liability to a third party caused by collision of the ship and other
similar hazards.

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In a contract of marine insurance, the insured must have insurable interest in
the subject matter insured at the time of the loss. Insurable interest is not
required to be present at the time of taking the policy. Under marine
insurance, the following persons are deemed to have insurable interest:-
• The owner of the ship has an insurable interest in the ship.

• The owner of the cargo has insurable interest in the cargo.

• A creditor who has advanced money on the security of the ship or

cargo has insurable interest to the extent of his loan.

• The master and crew of the ship have insurable interest in respect of
their wages.

• If the subject matter of insurance is mortgaged, the mortgagor has

insurable interest in the full value thereof, and the mortgagee has
insurable interest in respect of any sum due to him.

• A trustee holding any property in trust has insurable interest in such

property.

• In case of advance freight the person advancing the freight has an

insurable interest in so far as such freight is repayable in case of loss.

• The insured has an insurable interest in the charges of any insurance

policy which he may take.

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Types of Marine Insurance Policies:-
• Voyage policy:- is a policy in which the subject matter is insured for a
particular voyage irrespective of the time involved in it. In this case
the risk attaches only when the ship starts on the voyage.

• Time policy:- is a policy in which the subject matter is insured for a

definite period of time. The ship may pursue any course it likes; the
policy would cover all the risks from perils of the sea for the stated
period of time. A time policy cannot be for a period exceeding one
year, but it may contain a 'continuation clause'. The 'continuation
clause' means that if the voyage is not completed within the specified
period, the risk shall be covered until the voyage is completed, or till
the arrival of the ship at the port of call.

• Mixed policy:- is a combination of voyage and time policies and

covers the risk during particular voyage for a specified period of time.

• Valued policy:- is a policy in which the value of the subject matter

insured is agreed upon between the insurer and the insured and it is
specified in the policy itself.

• Open or Un-valued policy:- is the policy in which the value of the

subject matter insured is not specified. Subject to the limit of the sum
assured, it leaves the value of the loss to be subsequently ascertained.

• Floating policy:- is a policy which only mentions the amount for

which the insurance is taken out and leaves the name of the ship(s)
and other particulars to be defined by subsequent declarations. Such

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 policies are very useful to merchants who regularly despatch goods
through ships.
Wagering or Honour policy:- is a policy in which the assured has no
insurable interest and the underwriter is prepared to dispense with the
insurable interest. Such policies are also known as 'Policy Proof of Interest
(P.P.I).
Marine Hull
Marine Hull insurance covers nearly everything that floats and moves,
starting with rowing boat to huge ocean going tankers. It covers loss or
damage to hull and machinery. The hull is the structure of the vessel.
Machinery is the equipment that generates the power to move the vessel and
control the lighting and temperature system such as boiler, engine, cooler
and electricity generator. Just as a motor insurance policy is taken to cover
the vehicles plying on the road, similarly a marine hull policy is taken to
cover the vessels.

PRINCIPLE OF INDEMNITY IN MARINE INSURANCE

Both Marine Cargo & Marine Hull policies are issued as ‘Valued’ Policies.
A valued policy is one which specifies the agreed value of the subject matter
insured value. This value is the insured value. Goods which are covered
under marine policies will be in the course of transit from one county to
another the price of which are subject to fluctuations from time to time. The
value will be the maximum at the time when the cargo reaches the
destination. It is difficult to arrive at the value when the goods are in transit.
Therefore agreed value policies are issued on cargoes. The agreed value
includes purchase cost, freight, internal & inland transport, expenses on
loading & unloading, cost of insurance, port trust charges, local agency
commission, Taxes & duties. Marine hull insurance policies are also issued
as valued policies. The market value of ship also fluctuates widely. The
market value of a ship may not reflect its true value to the owner. A vessel
may be3 old but to a ship owner it is as valuable as a new vessel from the
point of freight earning capacity. The sum insured is fixed be agreement
between the insurer and the insured which is arrived as a fair value.

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19
COMMERCIAL GEOGRAPHY

Scope and relevance to marine insurance.

International trade and factors governing supply and demand.

Study of basic geographical concepts, like the Solar System, Latitudes and
Longitudes, sea depth distribution, ocean currents, tides, coral reefs and
islands, etc. Earthquakes and volcanic eruptions and areas prone to these
catastrophes

Institute Warranties and their application.

A detailed study of the main sea routes of the world, including Suez and
Panama Canal Routes and geographical and commercial factors involved.

Rail and Road Transportation - Coastal trade - Air transport.

The attributes of ports, harbors and hinterlands. Principal ports of the world
including a study of conditions in each such port, Geographical location,
extent of commercial importance and facilities available for handling and
storing cargo etc.

Major principal commodities, conditions required for their growth and

production and their traffic or movement in world trade. Commodities
involved are cereals, grain and pulses, fruits, vegetables oils, beverages,
spices, meat and dairy products, metals, fuel, fertilizers, etc.

A study of maritime hazards and the locations where they occur.

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Marine Cargo
Marine Insurance is the oldest form of insurance in the world. Though the
name indicates that the policy covers the transit of goods only by waterways,
it is not so. It covers transportation of goods by rail, road, air as well as
couriers. During this entire process of transportation, storage, loading and
unloading, the goods are exposed to a large number of perils. Goods are
often lost or damaged due to the operation of these hazards and there is a
financial loss to the exporter/ importer. It is this loss that is taken care of by
marine cargo insurance or what is more popularly known as transit
insurance.
Marine Sales Turnover Policy
Marine policies are generally either “specific-voyage” policies or
“declaration” policies for either imports, exports, indigenous transits of raw
material or finished goods, customs duty, transits from anywhere to
anywhere in the world and to and from job works. While for a specific
policy, the cover is issued from commencement to landing at the final
destination, the other policies are generally continuous policies issued on an
annual basis or for a specified period of time for an agreed value of transits
based on the insured’s estimate of goods movement for the specified period.
It is mandatory for all transits in the agreed period to be declared.

There have been operational lapses resulting in claims getting repudiated for
declarations not made or insufficient balance of Sum insured at the time of
claim and many a client has been caught unaware. Discovering that a
particular damaged or lost consignment was unfortunately not covered, and
hence the claim not payable, can be very frustrating for an otherwise diligent
Insured.

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BIBLIOGRAPHY
ALL THE INFORMATION RELATED TO MARINE INSURANCE IS
TAKEN FROM FOLLOWING SEARCH ENGINS.
1) www.yahoo.com
2) www.google.co.in
3) www.scribd.com
4) www.wikipedia.com

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INDEX

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SR.NO TOPIC PAGE
NO.

1 MEANING AND DEFINATION 2

2 ORIGIN OF FORMAL MARINE INSURANCE 2
3 MARINE INSURANCE ACT. 3
4 WHAT IS MARINE INSURANCE? 5
5 WHAT IS INLAND MARINE INSURANCE? 6
6 WHAT IS OCEAN MARINE INSURANCE? 7
7 HOW DO I CHOOSE BEST MARITIME 8
INSURANCE?
8 WHO ARE THE MERCHANT MARINES? 9
9 WHAT ARE THE MARINE CORPS RESERVES? 11
10 WHAT DOES MARINE SURVEYOR DO? 12
11 PROTECTION AND INDEMNITY 13
12 WARRANTIES AND CONDITIONS 14
13 CHOOSE THE BEST MARINE INSURANCE 14
PROVIDERS IN INDIA
14 MARINE INSURANCE & TYPES OF MARINE 15
INSURANCE
15 TYPES OF MARINE INSURANCE POLICIES 17
16 MARINE HULL 18
17 PRINCIPLE OF INDEMNITY IN MARINE 18
INSURANCE
18 COMMERCIAL GEOGRAPHY 19
19 MARINE CARGO 20
20 MARINE SALES TURNOVER POLICY 20
21 BIBLIOGRAPHY 21

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