__________________________________________________________________________

SUBJECT- INSURANCE LAW

TOPIC - MARINE INSURANCE: A STUDY OF ITS

RELEVANCE IN THE MODERN ERA OF SEA TRADING

Supervised By:shruti das gupta

NAME: RATUL KHANDAKAR

ROLL NO: Admit Card No- 102/LLB3/17028
Class Roll No- 23
COURSE: LLB 3YEARS (5TH SEMESTER)

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ACKNOWLEDGEMENT

With profound gratitude and sense of indebtedness I place on record my sincerest thanks

to……, Assistant Professor in Law, Indian Institute of Legal Studies, for her invaluable

guidance, sound advice and affectionate attitude during the course of my studies.

I have no hesitation in saying that he/she molded raw clay into whatever I am through his/her

incessant efforts and keen interest shown throughout my academic pursuit. It is due to his/her

patient guidance that I have been able to complete the task.

I would also thank the Indian institute of Legal Studies Library for the wealth of information

therein. I also express my regards to the Library staff for cooperating and making available

the books for this project research paper.

Finally, I thank my beloved parents for supporting me morally and guiding me throughout the

project work.

Date: RATUL KHANDAKAR

(LLB 3YEARS 5TH SEMESTER)_

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 TABLE OF CONTENTS
__________________________________________________________
Acknowledgement…………………………………………………….……………………………..…………………2
Research Methodology……………………………………….…………………………..……………………….4 - 5
A. Aims and Objectives……………………………………………………………………..…………………4
B. Statement of Problem……………………………………………………………………….………….4
C. Research Hypothesis…………………………………………………….…………………….
……………………..4
D. Research Questions……………………………………………………….….……………..
………………………4
E. Methodology of Research…………………………………………….……………….………………………5
F. Scope and Limitations……………………………………………………………………………………..5
G. Review of Literature…………………………………………………………..…………………………5
H. Mode of Citation…………………………………………………………………………………………..5

Table of Cases…………………………………………………………………………………………………….6
Chapter – I: Introduction……………………………………………………………..……………………7
Chapter II: . Marine Insurance: Definition………………………….……..8-10

Marine Insurance Policy Exclusion………………………………………………………………………8

A. Marine insurance cover……………………………..…………………………9-10

Chapter III: 1The different types of marine insurance can be elaborated as follows:………11

Chapter IV: Case Study…………………………………………………………………………………………….11

A. Facts of the case……………………………………………………………………………………………..12

B. Issues Involved…………………………………………………………………………………………….12
C. Judgment……………………………………………………………………………………….13
ChapterV: Conclusion…………………………………………………………………….
…………………………....14
Bibliography…………………………………………………………………………………………………………………15

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 RESEARCH METHODOLOGY
_____________________________________________________

A. AIMS AND OBJECTIVES

The aims and objectives of this project are to understand the concepts of Agent, Sub-Agent,
And Substitute Agent: Judicial Interpretation. One of the aims of the project is to have a
comparative study on the topic, marine insurance concept of Agent, Sub-Agent, And
Substitute Agent: Judicial Interpretation.

B. STATEMENT OF PROBLEM

Despite the laws and Acts, the current systems do not give an equal chance to access and
flourish. Though we have various Laws and Statutes yet essential things are missed out and
very few literates know the proper meaning and nature of marine insurance.

C. RESEARCH HYPOTHESIS

This research work is an attempt to distill lessons from the concept of Agent, Sub-Agent, And
Substitute Agent: Judicial Interpretation. It is an attempt to know the concept of various
terminologies within the concept of Agent, Sub-Agent, And Substitute Agent: Judicial
Interpretation. and how they are very much needed in our present society.

D. RESEARCH QUESTIONS

Based on the statement of problem and research hypothesis aforementioned, the following
research questions have been formulated:
1. What do you meant by insurance company ?

2. How it is essential in marine insurance

3. How there are related between each other ?

E. METHODOLOGY OF RESEARCH

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“Methodology” implies more than simply the methods the researcher used to collect data. It
is often necessary to include a consideration of the concepts and theories which underlie the
methods. The methodology opted for the study on the topic is Doctrinal. Doctrinal research in
law field indicates arranging, ordering and analysis of the legal structure, legal frame work
and case laws by extensive surveying of legal literature but without any field work.

F. SCOPE AND LIMITATIONS

The research work discusses the key points that the Learned Court observed as well as what
is deduced after going through the research work. Agent, Sub-Agent, And Substitute Agent:
Judicial Interpretation. topic being very vast like ocean, the work is limited to the project
topic.

G. REVIEW OF LITERATURE

The researcher while writing this project has taken recourse to various primary and secondary
sources. Primary sources would include various laws, books and articles. Secondary sources
would include reports and websites.

H. MODE OF CITATION

A uniform Blue Book Mode of citation has been adopted throug

TABLE OF CASES

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1.Oliver vs mariyland insurance company 11 U.S. 7 Cranch 487 487 (1813)

2.The New India Assurance Company ... vs Syed Mohammed, Anjalipuram on 15

March, 1991
Equivalent citations: AIR 1991 Ker 368

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 CHAPTER-1

INTRODUCTION : The need to insure property against the economic consequences of its
loss or damage has become a fundamental feature of modern society. Insurance underpins
key aspects of society by providing security and protection to individuals, communities and
businesses. It facilitates trade and commerce; generates employment; provides risk sharing;
encourages innovation by allowing individuals and businesses to

engage in more risky business activities, thereby fostering higher levels of economic activity;
and mobilizes domestic savings through the collection of premiums by insurance companies
which can help build a country’s financial market.

In the context of globalization, maritime transport is the backbone of international trade with
over 80 per cent of world merchandise trade by volume being carried by sea. Marine
transport involves risks related with the “perils of the sea". In this respect, marine insurance is
a mechanism that helps to mitigate the risks of financial loss to the property such as ship,
goods or other movables, in maritime transport. Insurance is, thus, a necessary component of
doing business on an international basis and plays an important role in the international trade.
Its purpose is to enable ship-owner, the buyer and seller of the goods to operate their
businesses, while relieving themselves, at least partly, of the burdensome financial
consequences of their property’s being lost or damaged as a result of various risks of the high
seas.

Marine insurance is an important component of international trade and commerce and subject
to international regulations in every stage of operations. It is governed by the Marine
Insurance Act 1963 in India and guided by the various clauses formulated by the Institute of
London Underwriters (ILU) and the international commercial terms known as ‘Incoterms’.
This paper analyses the legal aspects the marine insurance in India and provides an overview

and analysis of the Marine Insurance Act, 1963 .

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 CHAPTER-2

1. Marine Insurance: Definition

A contract or policy of marine insurance is an arrangement whereby one person called insurer
or underwriter, agrees, according to specific terms of contract, to indemnify another person,
called assured, for the losses incurred in connection with property, such as ship, goods or
other movables, in maritime transport (See, sections 25).

Section 3 of the Marine Insurance Act, 1963, defines ‘marine insurance’ as follows:

A contract of marine insurance is an agreement whereby the insurer undertakes to indemnify

the assured, in the manner and to the extent thereby agreed, against marine losses, that is to
say, the losses incidental to marine adventure.

“Marine adventure" includes any adventure where any insurable property is exposed to
maritime perils i.e. perils consequent to navigation of the sea. It also includes the earnings or
acquisition of any freight, passage money, commission, profit or other pecuniary benefit, or
the security for any advances, loans, or disbursements is endangered by the exposure of
insurable property to maritime perils (ibid., sections 2(e) Marine adventure also includes any
liability to a third party may be incurred by the owner of, or other person interested in or
responsible for, insurable property by reason of maritime perils.

A contract of marine insurance may, by its express terms, or by usage of trade, be extended
so as to protect the assured against losses on inland waters or on any land risk which may be
incidental to any sea voyage(ibid., Section 4[1]). Marine insurance is always written on an
occurrence basis, covering claims that arise out of damage or injury that took place during
the policy period, regardless when claims are made. Policy features often include extensions
of coverage for items typical to a marine business such as liability for container damage and
1
removal of debris.2

2-1: Marine Insurance Overview:

Ever since the ancient times, international trade has relied heavily on sea routes for
transportation. Well before airplanes or trains were invented, ships have been the primary

1
www.httpindiankanoon.com
2
www.ncbi.com

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 mode of trade related transport. However, sea routes in the old days were plagued by plenty
of risks like bad weather, attacks by sea pirates, collision, etc. All these perils have given rise
to the need for marine insurance which is believed to the very first form of developed
insurance.

. Benefits of Marine Insurance Plan:

Marine insurance is helpful for a variety of reasons.

1. It provides all-round coverage against a wide variety of risks faced while at sea.
2. Most marine insurance providers offer claim survey assistance worldwide, along with
claim settlement assistance.
3. Different marine insurance providers offer a variety of options and plans under marine
insurance policies to suit different budgets and requirements.
4. Marine insurance covers can often be customized and adjusted to meet specific needs
and budgets of the customers.

2.2: Marine Insurance Covers: The primary objective of a marine insurance policy
is to protect your finances and assets while they are being transported via sea. However,
different insurance companies offer multiple types of marine insurance policies. Due to this
reason, there is no standard list of risks against which every marine insurance will provide
protection. Though most marine insurance policies do provide cover against damages or
losses to expensive cargo, some policies may while some may not provide extended cover
against cross border civil disturbances or against pirates. Following is a list of some of the
common instances or losses which marine insurance provides cover against:

1. Import or export shipments.

2. Goods which are being transported via sea, rail, air, road or post.
3. Goods being transported by coastal vessels which ply between different ports inside
the country.3

2.3 :Marine Insurance Policy Exclusions:

3
www.http.orgh.com

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 Some of the common exclusions of most marine insurance policies are listed as below:

 Routine wear and tear or ordinary leakage.

 Incorrect and inadequate packaging of goods being transported.
 Damage caused due to delay.
 Damage caused willfully or intentionally.
 Damage caused due to civil commotion, strikes, war, riot, etc.
 Any damage or loss occurring due to bankruptcy or financial default of the owner of
the transport vessel.

Marine Insurance Claim Process:

The claim process for marine insurance is similar to that done for any other type of insurance.
Following are some of the basic steps to make a claim in case of marine insurance.

 You must either contact the claim representative or the nearest branch of your
insurance provider and intimate them about the claim.
 In the event that the damage has occurred to the goods while they are on the ship or
port, you must arrange for a port or a joint ship survey.
 You must submit the policy document / certificate which had previously been issued
to you at the time of taking the policy. You also need to provide the original invoice and
any other documents which may be required to authenticate your claim.4

CHAPTER-3
4
(1899)2 Q.B.530

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3.1The different types of marine insurance can be elaborated as
follows:

Hull Insurance: Hull insurance mainly caters to the torso and hull of the vessel along with
all the articles and pieces of furniture on the ship. This type of marine insurance is mostly
taken out by the owner of the ship to avoid any loss to the vessel in case of any mishaps
occurring.

Machinery Insurance: All the essential machinery are covered under this insurance and in
case of any operational damages, claims can be compensated (post survey and approval by
the surveyor).

The above two insurances also come as one under Hull & Machinery (H&M) Insurance. The
H&M insurance can also be extended to cover war risk covers and strike cover (strike in port
may lead to delay and increase in costs) Protection & Indemnity (P&I) Insurance: This
insurance is provided by the P&I club, which is ship owners mutual insurance covering the
liabilities to the third party and risks which are not covered elsewhere in standard H & M and
other policies.

Protection: Risks which are connected with ownership of the vessel. E.g. Crew related
5
claims.

Indemnity: Risks which are related to the hiring of the ship. E.g. Cargo-related claims.6

Liability Insurance: Liability insurance is that type of marine insurance where

compensation is sought to be provided to any liability occurring on account of a ship crashing
or colliding and on account of any other induced attacks.

3.2 Utmost Good Faith

5
Section 2 insurance act 1938
6
www.scribelaw.com

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The principle of utmost good faith is indispensable in any insurance contract. Under the open
policy the insurer usually knows only of the shipments made by the exporter after the receipt
of the insurance declaration form and/or the copy of the insurance certificates. Under such
circumstances, a consignment may have reached the importer in: good condition, that is,
without sustaining any loss or damage, before the insurer knows of such consignment. If
the exporter knows that the consignment has safely reached the importer and deliberately
does not declare such consignment in the insurance declaration form in order to avoid paying
the insurance premium, such action is a breach of good faith. Consequently, the insurer may
cancel the insurance policy issued to the exporter when the exporter's bad faith is known. bad
condition, that is, sustaining loss or damage, before the insurer knows of such consignment.
Whether or not the exporter knows that the consignment has not safely reached the importer
and fails to declare such consignment in the insurance declaration form, the insurer is liable
to pay for the loss or damage out of good faith.

3.3 Marine Policy Conditions

The Marine Insurance Act 1906 (MIA) provides a framework on which marine insurance is
based and the policy document hangs, upon this framework insurers are obliged to issue their
policies. Within the policy the insurers are free to use such words and other terms as they see
fit and most insurance companies have constructed ‗plain language‘ policies that try to meet
the demands of the modern insurance buyer. It is also usual for insurers to use the Institute
Clauses - the Institute Cargo Clauses (A) afford the most cover with (C) affording the least
i.e.

CHAPTER-4

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 CASE STUDY :

A Case Study of Oliver

VS

The Maryland Insurance Company

Facts of the Case

In 1807, the snow Comet, owned by wealthy Baltimore merchant Robert Oliver, shipped out
of Baltimore for Barcelona. Oliver had taken out an insurance policy on the ship from the
Maryland Insurance Company, a Baltimore insurance company of which Oliver
coincidentally also had an ownership interest.1 The insurance policy specifically insured the
Comet only “at and from Baltimore to Barcelona and at and from thence back to Baltimore.”
2 The ship and her crew sailed into Barcelona on July 25th, 1807, and port officials there
deemed it necessary to place the ship in quarantine. She was not unloaded and ready to sail
on until November 28th, 1807.3 On this date, the Comet departed Barcelona for the port city
of Salou, sixty miles south of Barcelona, to take on cargo for the return trip to Baltimore.4
Again, the insurance policy strictly covered merely sailing from Baltimore to Barcelona and
back.

Conclusion

As mentioned above, this case still holds some precedential value today. It has been cited in
twenty-two cases, including 3 before the Supreme Court. In addition, it was mentioned in two
other opinions of the Court.160 A full Shepardization of the case on Lexis databases reveals
twenty-six decisions that have cited to Oliver. Of these, only one is listed as distinguishing
from the holding of Oliver; the rest cite to the case or follow it. Furthermore, of the four
Supreme Court cases that have relied on the Oliver opinion, none have a negative indication
of the Court’s decision.161 It is therefore evident that the Court deemed its own reasoning in
this case to be logical precedent, and it has therefore been adopted as an important aspect of
the canon of marine insurance law.

2.THE NEW INDIA ASSURANCE COMPANY

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 VS

SYED MOHAMMAD ANJALIPURAM AIR 1991 Ker 368

FACT: The plaint averred the insurance of the boat, the events of 3-4-1977, the missing of
the boat from 4-4-1977, the submission of the claim on 7-5-1977, the refusal of the defendant
to settle the claim the ultimate repudiation by the defendant of the plaintiff's claim by letter
dated 16-9-1977, and the unjustifiable stand of the defendant in the matter. The Insurance
Company relied on clause 7 of the policy, a warranty, reading :

"When not in use Vessel should be safely anchored, moored or secured with proper watch
and ward."

According to the defendant, the words "with proper watch and ward" were to be read
distinctively and not conjunctively. It was further averred :

"At the time of the casualty the vessel was anchored and the plaintiff had by way of abundant
caution engaged Deck hand A. Ahammed Kunju to keep watch and ward over the Vessel,
though plaintiff had no obligation to do so under the warranty clause when once the Vessel is
anchored."

The further averments only refer to the communication sent by the plaintiff on 27-10-1977,
the reiteration of the defence stand as contained in the letter dated 21-11-1977 where in there
was a direction to the plaintiff to contact the Average Adjusters whose opinion had been
sought by the Insurance Company. It was stated that the plaintiff had sent a representation to
the Average Adjusters but did not obtain any reply from them. The inability to consider the
claim of the plaintiff was reiterated in its letter dated 26-9-1979. The defendant had referred
to the views of the Average Adjusters that the defendant was guilty of breach of warranty in
regard to the maintenance of watch and ward. Contending that such a stand was untenable the
suit as brought.

JUDGMENT:  The conduct of the officials before the nationalisation in relation to their
business activities and the conduct of the cases before the court has left such an impression in
the minds of those who had occasion to deal with this type of litigation during the different
periods. It is time that the deficiencies are looked into seriously at the highest level of
Government of India. A copy of the judgment will be forwarded to the Ministry of Finance,
Government of India, for that purpose.7

CHAPTER –5
7
AIR 1991 Ker368

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CONCLUSION

The Constitution of India is federal in nature in as much there is division of powers between
the Centre and the States. Insurance is included in the Union List, wherein the subjects
included in this list are of the exclusive legislative competence of the Centre. The Central
Legislature is empowered to regulate the insurance industry in India and hence the law in this
regard is uniform throughout all the territories of India. Insurance law in India has its origin
in the United Kingdom with the establishment of a British firm, the Oriental Life Insurance
Company in 1818 in Calcutta, followed by the Bombay Life Assurance Company in 1823,
the Madras Equitable Life Insurance Society in 1829 and the Oriental Life Assurance
Company in 1874. However, till the establishment of the Bombay Mutual Life Assurance
Society in 1871, Indians were charged an extra premium upto 20% as compared to the
Britishers. The first statutory measure in India to regulate the life insurance business was
taken in 1912 with the passing of the Indian Life Assurance Companies Act, 1912 (which
was based on the English Act of 1909). Other classes of insurance business were left out of
the scope of the Act of 1912, as such kinds of insurance were still in rudimentary form and
legislative controls were not considered necessary.

BIBLIOGRAPHY:

Books

1.general principles of law of insurance by R N CHAUDHARY

2. general principles of law of insurance book by k r murthy

Secondary sources…………………….

1.www.httpp.orghlaw.com

2.www.scribelaw.com

3.www.ncbi.com

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