MARINE INSURANCE Presented By: Gourav Mukherjee (11DCP073) Richa Sethi (11DCP091)

Marine Insurance - Definition Marine Insurance is: A Contract of Indemnity for a specified consideration (prem ium) for specific Risks (winds and waves not included).

Marine Insurance - Definition Marine insurance will include the insurance of hulls, the cargo they carry, liab ilities that may devolve upon ships and ship operators, known as protection and i ndemnity and also the insurance of wharves, ports and harbours, container termina ls and even oil platforms and drilling rigs. - TRAFALGAR INTERNATIONAL LTD. Insurance Brokers and Consultants

Types of Marine Insurance Hull Insurance Liability Insurance Marine Insurance Cargo Insurance Freight Insurance

Types of Marine Insurance Hull Insurance Cargo Insurance Freight Insurance Liability Insurance Hull Insurance covers the insurance of the vessel and its equipment i.e. furnitu re and fittings, machinery, tools, fuel, etc. It is effected generally by the ow ner of the ship

Types of Marine Insurance Hull Insurance Cargo Insurance Freight Insurance Liability Insurance Cargo Insurance includes the cargo or goods contained in the ship and the person al belongings of the crew and passengers

Types of Marine Insurance Hull Insurance Cargo Insurance Freight Insurance Liability Insurance 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, o nly 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 c ompany loses the freight. Freight insurance is taken to guard against such risk

Types of Marine Insurance Hull Insurance Cargo Insurance Freight Insurance Liability Insurance 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 c aused by collision of the ship and other similar hazards

Basic Risks Perils of Sea Fire Jettison Barratry

Basic Risks Perils of Sea Fire Jettison Barratry Perils of the Sea These include damage to the vessel or cargo by forces of waves, storms, strandin g of the vessel, sinking of the vessel and collision with other vessel, etc.

Basic Risks Perils of Sea Fire Jettison Barratry Fire This includes damage directly due to fire or efforts to extinguish the fire.

Basic Risks Perils of Sea Fire Jettison Barratry Jettison It means voluntary throwing overboard of some cargo to save the ship and the res t of the cargo.

Basic Risks Perils of Sea Fire Jettison Barratry The term Barratry includes every wrongful act wilfully committed by the master o r crew to the prejudice of the owner, or, as the case may be, the charterer. In Maritime law, as set out within the British Marine Insurance Act of 1906, it ref ers to "barratrous conduct"

Types of Losses Total Loss Partial Loss General Average Loss Particular Average Loss

Types of Losses Total Loss Total Total Loss Loss may be either an actual total loss or a constructive total loss. Actual Total Loss - In this type of a loss, the goods insured are destroyed or d amaged as to cease to be a thing of the kind insured, or where the assured is ir retrievably deprived. Constructive Total Loss This is the loss which appears to be unavoidable or because it could not be preserved from actual loss without an expenditure which would exceed their value when the expenditure had been incurre d. Partial Loss General Average Loss Particular Average Loss

Types of Losses Partial Loss Total Loss Partial Loss is defined as a loss other than the total loss. Partial Loss It may include particular average loss or general average loss. General Average Loss Particular Average Loss

Types of Losses General Average Loss Total Loss In Partial Loss time of general peril an extraordinary sacrifice or expenditure may be made or i ncurred for the purpose of preserving the properties in common. Examples of gene ral average sacrifice are: 1. Cargo Jettisoning 2. Damage caused by fire/attempt to extinguish fire. 3. Expenses of entering and leaving the port of refuge. 4. Expenses of discharging, storing and reloading of the cargo if that be necessary for the common safety. General Average Loss Particular Average Loss

Types of Losses Particular Average Loss Total Loss A particular average Partial Loss loss is a partial loss of the goods insured, caused by a peril insured against, and which is not a general average loss. While the general average loss is volunt arily undertaken for the common safety of all the parties insured, a particular average loss is fortuitous or accidental. It cannot be partially shifted to othe rs but has to be borne by the person directly affected. General Average Loss Particular Average Loss

Types of Losses- Summary Marine Loss Total Loss Partial Loss Constructive Total Loss Actual Total Loss Particular Average Loss General Average Loss

Risks Covered Institute Cargo Clause (C) Institute Cargo Clause (B) Institute Cargo Clause (A) War and SRCC Cover

Risks Covered Fire or Explosion. Standing, grounding, sinking or capsizing of the vessel. Over turning or derailment of land conveyance. Collision or contact of vessel. Discha rge of cargo at a port of distress Jettison Institute Cargo Clause (C) Institute Cargo Clause (B) Institute Cargo Clause (A) War and SRCC Cover

Risks Covered Loss or damage attributable to earthquake, volcanic eruption of lightning. Washi ng overboard. Loss or damage to the goods caused by entry of sea, lake or river into vessel, container or van etc. Total loss of any package lost overboard or d ropped whilst loading on to or unloading from vessel. Institute Cargo Clause (C) Institute Cargo Clause (B) Institute Cargo Clause (A) War and SRCC Cover

Risks Covered By paying extra following can be including in Clause (B): Theft, pilferage or non -delivery. Rain water damage. Hook, oil, mud, acid and damage by other cargo. He ating and sweating. Leakage. Institute Cargo Clause (C) Institute Cargo Clause (B) Institute Cargo Clause (A) War and SRCC Cover

Risks Covered All risks except war, strike, riots or civil commotion Institute Cargo Clause (C) Institute Cargo Clause (B) Institute Cargo Clause (A) War and SRCC Cover

Risks Covered Cover for war, strike, riots or civil commotion along with any of the above clau ses Institute Cargo Clause (C) Institute Cargo Clause (B) Institute Cargo Clause (A) War and SRCC Cover

Marine Insurance Policies Voyage Policy Time Policy Mixed Policy Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour policy

Marine Insurance Policies Voyage Policy Time Policy Mixed Policy Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour Policy Voyage Policy is a policy in which the subject matter is insured for a particula r voyage irrespective of the time involved in it. In this case the risk attaches only when the ship starts on the voyage.

Marine Insurance Policies Voyage Policy 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 st ated period of time. A time policy cannot be for a period exceeding one year, bu t it may contain a 'continuation clause'. The 'continuation clause' means that i f the voyage is not completed within the specified period, the risk shall be cov ered until the voyage is completed, or till the arrival of the ship at the port of call. Time Policy Mixed Policy Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour Policy

Marine Insurance Policies Voyage Policy Time Policy Mixed Policy Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour Policy Mixed policy is a combination of voyage and time policies and covers the risk du ring particular voyage for a specified period of time. Mixed policy = Voyage Policy + Time Policy

Marine Insurance Policies Voyage Policy Time Policy Mixed Policy Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour Policy Valued policy is a policy in which the value of the subject matter insured is ag reed upon between the insurer and the insured and it is specified in the policy itself.

Marine Insurance Policies Voyage Policy Time Policy Mixed Policy 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. Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour Policy

Marine Insurance Policies Voyage Policy Time Policy Mixed Policy Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour Policy Floating Policy is a policy which only mentions the amount for which the insuran ce is taken out and leaves the name of the ship(s) and other particulars to be d efined by subsequent declarations. Such policies are very useful to merchants wh o regularly despatch goods through ships.

Marine Insurance Policies Voyage Policy Time Policy Mixed Policy Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour Policy Wagering or Honour Policy is a policy in which the assured has no insurable inte rest 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 Insurance Policies Voyage Policy Contents of the Policy The name of the assured or of some person who affects the insurance on his behal f. Time Policy Mixed Policy The subject matter insured and risk insured against. The voyage or period of time Valued Policy Open or Un-Valued Policy Floating Policy Wagering or Honour Policy both. The sum or sums insured. The name or names of insurer or insurers.

Risks Not Covered Loss, damage or expense caused by delay and inherent vice or nature of the subje ct matter. Loss, damage or expense caused by willful misconduct of the insured. Ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of subject matter insured. Insufficiency or unsuitability of packing. Deliberate d amage to or deliberate destruction of goods. Loss due to insolvency or financial default of the owners, managers, charters or operators of the vessel, Loss or d amage arising from nuclear weapon or other radioactive force.

Warehouse to Warehouse Clause Warehouse to Warehouse clause states that the goods are insured from the time th ey leave the warehouse of the exporter and remains in force till the goods reach the goods reach the destination and are stored in a warehouse there. But on the ship reaching the destination, if the goods cannot be taken delivery of due to reason beyond the control of the consignee, the insurance will be valid for 60 d ays from the date of arrival of the ship after which it expires.

Warehouse to Warehouse Clause Thus the insurance will expire on the goods being placed in a godown in the impo rters country or on expiry of 60 days from the date of arrival of the ship whiche ver is earlier. The period of 60 days is allowed only in cases where the delay i s beyond the control of the importer.

Claim Procedure Give a notice of loss to the insurance company immediately. Take all steps to mi nimize the loss, preserve all rights against third parties. Arrange for survey b y ship surveyors if the packages show any outward sign of damage. Arrange for in surance survey by the insurance company in other cases. Prefer claims with shipp ing companies and other parties where required. Submit insurance policy, copy bi ll of lading, invoice, packing list and claim bill.

To Summarize Types of Marine Insurance- Hull, Cargo, Freight and Liability Risks Covered- Ins titute Cargo Clause (C), Institute Cargo Clause (B), Institute Cargo Clause (A), War and SRCC Cover Basic Risks- Perils of Sea, Fire, Jettison and Barratry Mari ne Insurance Policies- Voyage, Time, Mixed, Valued, Open or Un-Valued, Floating and Wagering or Honour Policy

United India Insurance Marine Hull Insurance Premium Rating The normal basis of valuation for ocean/air consignment will be C IF + incidentals up to a percentage which is agreed upon at the inception of the policy ( normally this is 10 %)

United India Insurance Marine Hull Insurance For example, Insurance Amount- $40,000 Cover Percent- 110% (10% included for rec overy charges for the claims) Total Amount= 110%*40,000= $44,000