I

NSURNCELAW

UNI
T–I
I
ntr
oduct
ion:Nat
ure-Def
ini
ti
on-Hi
stor
yofI
nsur
ance-Hi
stor
yanddev
elopmentof
I
nsur
ancei
nIndi
a-I
nsur
anceAct
,1938-(
mai
nsect
ions)I
nsur
anceRegul
ator
yAut
hor
it
y
Act
,1999:
Itsr
oleandf
unct
ions.

UNI
T–I
I
Cont
ractofI
nsur
ance:Cl
assi
fi
cat
ion ofcont
ractofI
nsur
ance Nat
ure ofv
ari
ous
I
nsur
anceCont
ract
s-Par
ti
est
her
eto-Pr
inci
plesofgoodf
ait
h– nondi
scl
osur
e–
Mi
srepr
esent
ati
on i
nInsur
ance Cont
ract
-Insur
abl
eInt
erest
-Pr
emi
um:Def
ini
ti
on-
met
hodofpay
ment
,day
s ofgr
ace,f
orf
eit
ure,r
etur
nofpr
emi
um,Mor
tal
i
ty;Ther
isk–
Meani
ngandscopeofr
isk,
CausaPr
oxi
ma,
Assi
gnmentoft
hesubj
ectmat
ter
.

UNI
T–I
II
Li
feI
nsur
ance:
Nat
ureandscopeofLi
feI
nsur
ance-Ki
ndsofLi
feI
nsur
ance.
Thepol
i
cyand f
ormat
ion ofa l
i
fei
nsur
ancecont
ractEv
enti
nsur
ed agai
nstLi
fe
i
nsur
ancecont
ract
-Ci
rcumst
anceaf
fect
ingt
her
isk-Amountr
ecov
erabl
eundert
heLi
fe
Pol
i
cy-Per
sonsent
it
lest
opay
ment
-Set
tl
ementofcl
aim andpay
mentofmoney
-Li
fe
I
nsur
anceAct
,1956I
nsur
anceagai
nstt
hir
dpar
tyr
ight
s-Gener
alI
nsur
anceAct
,1972-
TheMot
orVehi
clesAct
,1988–Sec.(
140-
176)
,inI
ndi
a.Nat
ureandscope-Absol
uteor
no-
faul
tli
abi
l
iti
es,
Thi
rd
par
tyorcompul
sor
yinsur
anceofmot
orsv
ehi
cles-Cl
aimsTr
ibunal
-Publ
i
c Li
abi
l
ity
I
nsur
ance–Legal
aspect
sofMot
orI
nsur
ance–Cl
aims–OwnDamagesCl
aims–Thi
rd
Par
tyLi
abi
l
ityCl
aims.

UNI
T–I
V
Fi
reI
nsur
ance:Nat
ureandscopeofFi
reI
nsur
ance–Basi
cPr
inci
ples–Condi
ti
ons&
War
rant
ies–Ri
ght&Dut
iesofPar
ti
es–Cl
aims–SomeLegalAspect
s.I
ntr
oduct
iont
o
Agr
icul
tur
eInsur
ance – Hi
stor
y ofCr
op I
nsur
ance i
nIndi
a – Cr
op I
nsur
ance
Under
wri
ti
ng,Cl
aims,Pr
obl
emsassoci
atedwi
thCr
opI
nsur
ance–Cat
tl
eInsur
ancei
n
I
ndi
a.

UNI
T–V
Mar
ine I
nsur
ance:Nat
ure and Scope-Cl
assi
fi
cat
ion ofMar
ine pol
i
cies-I
nsur
abl
e
i
nter
est
-Insur
abl
eval
ues-Mar
ine i
nsur
ance and pol
i
cy-Condi
ti
ons and expr
ess
war
rant
iesVoy
agedev
iat
ion-Per
il
sofsea-Loss-Ki
ndsofLoss-TheMar
ineI
nsur
ance
Act
,1963(
Ss1t
o91)
CONCEPT,
NATUREANDSCOPEOFI
NSURANCE

I
nsur
ance i
s of pr
imar
yimpor
tance bot
hint
he nat
ionaleconomy and
i
nter
nat
ionalt
rade.I
nsur
ancepr
emi
um cash-
fl
owsgener
atef
undsf
ori
nvest
menti
n
t
heeconomy
.Thedev
elopmentoft
hei
nsur
ancesect
ordependsont
hegener
all
evel
of
economi
cdev
elopmentandpr
ospect
sfort
hei
mmedi
atef
utur
e.
Gener
all
y,t
her
eisaposi
ti
vecor
rel
ati
onbet
weent
heeconomi
cdev
elopmentof
acount
ryandt
heamountwhi
chpeopl
espendoni
nsur
ance;cont
ract
ual
,fi
nanci
aland
l
egal
aspect
sofi
nsur
ance.
I
nsur
ancei
sacont
ract
ualr
elat
ionbet
weeni
nsur
erandt
heassur
edt
hrough
whi
cht
hef
ormerunder
takest
oindemni
fyt
hel
osscausedt
othel
att
erduet
oan
uncer
tai
nri
ski
nvol
ved ort
opayacer
tai
nsum ofmoneyi
ntheev
entofani
nci
dent
happeni
ngornothappeni
ng,
agai
nstaconsi
der
ati
oncal
l
edaspr
emi
um.
Ev
ery
thi
ngi
nthi
suni
ver
sei
ssubj
ectt
oacci
dent
,dest
ruct
ionandwi
l
lper
ish.A
busi
nessmanusedt
hisi
deaofr
iskast
hesubst
anceofhi
sbusi
ness.Heunder
takes
t
hebur
den ofr
iskagai
nstaconsi
der
ati
onbyapr
obabi
l
ityst
udyandaf
fi
xat
ionofan
adequat
econsi
der
ati
on.Het
her
efor
eear
nspr
ofi
tont
het
radeofr
iskwher
east
he
i
nsur
edi
sent
it
ledt
orecei
vet
hei
ndemni
fi
cat
ionoraf
ixedsum ont
hehappeni
ngoft
he
uncer
tai
nev
entcausi
ngl
oss.Hence,
thecont
ractofi
nsur
ancet
heni
sdescr
ibedasa
mechani
sm ofr
iskdi
str
ibut
ion andshar
ing.

SOMEI
MPORTANTDEFI
NITI
ONS
Theai
m ofi
nsur
ancei
stopr
otectt
heownerf
rom av
ari
etyofr
iskswhi
chhe
ant
ici
pat
es.Fundament
alf
unct
ionofI
nsur
ancei
sto
‘
Shi
ftt
hel
osssuf
fer
edbyasol
eindi
vi
dualt
oawi
l
li
ngandcapabl
epr
ofessi
onalr
isk-
bear
ersi
nconsi
der
ati
onofacompar
ati
vel
ysmal
lcont
ri
but
ioncal
l
edpr
emi
um’

Economi
stsay
‘
I
tisapr
ocesswher
ebyt
her
iskoff
inanci
all
ossar
isi
ngf
rom deat
hordi
sabi
l
ityofa
per
son ordamage,det
eri
orat
ion,dest
ruct
ionorl
ossofpr
oper
tyowi
ngt
oper
il
sof
whi
cht
heyar
eexposed,
isassumedbyanot
her
’
 4

Accor
dingt
oMacl
ean
‘
I
nsur
ancei
samet
hod ofspr
eadi
ng ov
eral
argenumberofper
sonsapossi
ble
f
inanci
all
osst
ooser
ioust
obeconv
eni
ent
lybor
nebyani
ndi
vi
dual
’

I
nthewor
dsofRi
egel&Mi
ll
er
‘
I
tser
vessoci
alpur
pose;
iti
sasoci
aldev
icewher
ebyuncer
tai
nri
sksofi
ndi
vi
dual
smay
becombi
nedi
nagr
oupandt
husmademor
ecer
tai
n;smal
lper
iodi
ccont
ri
but
ionbyt
he
i
ndi
vi
dual
spr
ovi
dingaf
undoutofwhi
cht
hosewhosuf
ferl
ossesmayber
eimbur
sed’

Har
dyI
vamywr
it
esi
nhi
swor Gener
k-“ alPr
inci
plesofi
nsur
anceLaw”t
hat
,
A cont
‘ ractofi
nsur
ance i
s a cont
ractwher
eby one per
son cal
l
ed t
he ‘
i
nsur
er’
,
under
takesi
nret
urnf
ort
heagr
eed consi
der
ati
oncal
l
ed t
he‘
premi
um’t
o payt
o
anot
herper
son,cal
l
edt
he‘
i
nsur
ed’asum ofmoneyori
tsequi
val
entont
hehappeni
ng
ofaspeci
fi
edev
ent
’.

nPr
I udent
ialI
nsur
anceCompanyv.I
nlandRevenueCommi
ssi
oner
,Channel
J.sai
d
Ther
‘ emustbeei
thersomeuncer
tai
ntywhet
hert
heev
entwi
l
lev
erhappenornot
,ori
f
t
he ev
enti
s one whi
ch musthappen atsome t
ime oranot
her
,ther
e mustbe
uncer
tai
ntyast
othet
imeatwhi
chi
twi
l
lhappen’
.

Gener
all
y,ani
nsur
anceagr
eementt
obeav
ali
dcont
ractmustbe
i
.Acont
ractbet
weenan‘
i
nsur
er’
andt
he‘
i
nsur
ed’
;
i
i
.Thecont
racti
sbasedont
hel
ossduet
ohappeni
ngornothappeni
ngofaf
utur
einci
dent
;
i
i
i.Aconsi
der
ati
oni
nthef
orm ofpay
mentofanamountbyt
hei
nsur
edand
i
v.Thei
nsur
erpr
omi
sest
omakegoodt
hel
ossi
nsof
armoneycandoi
t,i
ncaset
he
l
ossoccur
sont
hehappeni
ngoft
hecont
ingency
.

Thus,onecanobser
vet
hati
nacont
ractofi
nsur
ance,onecani
nsur
eshi
por
housebutcannotensur
ethatt
heshi
pshal
lnotbel
ostort
hehouseshal
lnotbebur
nt,
butwhatonecani
nsur
eist
hatasum ofmoneyshal
lbepai
dont
hehappeni
ngofa
cer
tai
nev
ent
.Thus,
thesubj
ectmat
terofi
nsur
ancei
sthecompensat
ioni
nthef
orm of
moneyt
obepai
dtot
heassur
edonhappeni
ngofar
isk.
 5

Obj
ect
ivesofi
nsur
ance
I
nsur
anceser
vest
wo-
fol
dpur
pose
1.I
mmedi
ate–shor
tranged&pr
oxi
mat
epur
poseLoss/
ri
sk/
damagespr
eadov
er
l
argenumberofr
iskbear
ersandt
hei
mmedi
atebenef
ici
aryi
sthei
nsur
ed.
2.Far
-si
ght
ed– l
ong-
range& r
emot
epur
pose,wher
eitaccel
erat
eseconomi
c
gr
owt
h ofnat
ion t
hrough i
nvest
mentby I
nsur
ance Compani
es t
he i
n
dev
elopmentofcommer
ce&i
ndust
ryoft
henat
ion.

HI
STORY
I
nIndi
ainsur
ancewasment
ioned i
nthewr
it
ingsofManu (
Manusmr
it
hi)
,
Yagnav
alky
a(Dhar
masast
ra)andKaut
il
ya(
Art
hashast
ra)
,whi
chexami
nedt
hepool
i
ng
ofr
esour
cesf
orr
edi
str
ibut
ionaf
terf
ir
e,f
loods,epi
demi
csandf
ami
ne.The l
i
fe-
i
nsur
ance busi
ness began i
n 1818 wi
tht
he est
abl
i
shmentoft
he Or
ient
alLi
fe
I
nsur
anceCompanyi
nCal
cut
ta;
thecompanyf
ail
edi
n1834.I
n1829,
Madr
asEqui
tabl
e
began conduct
ing l
i
fe-i
nsur
ancebusi
nessi
nthe Madr
asPr
esi
dency
.The Br
it
ish
I
nsur
anceActwasenact
edi
n1870,andBombayMut
ual(
1871)
,Or
ient
al(
1874)and
Empi
re ofI
ndi
a(1897)wer
efounded i
nthe Bombay Pr
esi
dency
.The er
a was
domi
nat
edbyBr
it
ishcompani
es.

I
n1914,t
hegov
ernmentofI
ndi
abeganpubl
i
shi
ngi
nsur
ance-
companyr
etur
ns.
TheI
ndi
anLi
feAssur
anceCompani
esAct
,1912wast
hef
ir
stst
atut
eregul
ati
ngl
i
fe
i
nsur
ance.I
n1928t
heI
ndi
anI
nsur
anceCompani
esActwasenact
edt
oenabl
ethe
gov
ernmentt
ocol
l
ectst
ati
sti
cali
nfor
mat
ionaboutl
i
feandnon-
li
fe-
insur
ancebusi
ness
conduct
ed i
nIndi
a byI
ndi
an and f
orei
gn i
nsur
ers,i
ncl
udi
ng Pr
ovi
dentI
nsur
ance
Soci
eti
es.I
n1938t
hel
egi
slat
ionwasconsol
i
dat
edandamendedbyt
heI
nsur
anceAct
,
1938,
wit
hcompr
ehensi
vepr
ovi
sionst
ocont
rol
theact
ivi
ti
esofi
nsur
ers.

TheI
nsur
anceAmendmentActof1950abol
i
shedpr
inci
palagenci
es,butt
he
l
evelofcompet
it
ionwashi
ghandt
her
ewer
eal
l
egat
ionsofunf
airt
radepr
act
ices.The
Gov
ernmentofI
ndi
adeci
dedt
onat
ional
i
zet
hei
nsur
ancei
ndust
ry.

Anor
dinancewasi
ssuedon19Januar
y1956,nat
ional
i
zingt
hel
i
fe-
insur
ance
sect
or,
andt
heLi
feI
nsur
anceCor
por
ati
onwasest
abl
i
shedt
haty
ear
.TheLI
Cabsor
bed
154 I
ndi
an and16non-
Indi
ani
nsur
ersand75Pr
ovi
dentSoci
eti
es.TheLI
Chada
monopol
yunt
ilt
hel
ate1990s,
whent
hei
nsur
ancei
ndust
rywasr
eopenedt
othepr
ivat
e
sect
or.
 6

Gener
ali
nsur
ancei
nIndi
abegandur
ingt
heI
ndust
ri
alRev
olut
ioni
ntheWest
andt
hegr
owt
hofsea-
far
ingcommer
cedur
ingt
he17t
hcent
ury
.Itar
ri
vedasal
egacy
ofBr
it
ishoccupat
ion,wi
thi
tsr
oot
sint
he1850est
abl
i
shmentoft
heTr
it
onI
nsur
ance
Companyi
nCal
cut
ta.I
n1907t
heI
ndi
anMer
cant
il
eInsur
ancewasest
abl
i
shed,
thef
ir
st
companyt
ounder
wri
teal
lcl
assesofgener
ali
nsur
ance.I
n1957t
heGener
alI
nsur
ance
Counci
l(awi
ngoft
heI
nsur
anceAssoci
ati
onofI
ndi
a)wasf
ormed,f
rami
ngacodeof
conductf
orf
air
nessandsoundbusi
nesspr
act
ice.

El
eveny
ear
slat
er,
theI
nsur
anceActwasamendedt
oregul
atei
nvest
ment
sand
setmi
nimum sol
vencymar
ginsandt
heTar
if
fAdv
isor
yCommi
tt
eewas est
abl
i
shed.
I
n1972,wi
tht
hepassageoft
heGener
alI
nsur
anceBusi
ness(
Nat
ional
i
zat
ion)Act
,the
i
nsur
ancei
ndust
rywasnat
ional
i
zedon1Januar
y1973.Onehundr
edsev
eni
nsur
ers
wer
eamal
gamat
edandgr
oupedi
ntof
ourcompani
es:Nat
ionalI
nsur
anceCompany
,
New I
ndi
a Assur
ance Company
,Or
ient
alI
nsur
ance Company and Uni
ted I
ndi
a
I
nsur
anceCompany
.TheGener
alI
nsur
anceCor
por
ati
onofI
ndi
awasi
ncor
por
atedi
n
1971,
eff
ect
ivef
rom 1Januar
y1973.

Ther
e-openi
ngoft
hei
nsur
ancesect
orbegandur
ingt
heear
ly1990s.I
n1993,
t
hegov
ernmentsetupacommi
tt
eechai
redbyf
ormerReser
veBankofI
ndi
agov
ernor
R.N.Mal
hot
rat
opr
oposer
ecommendat
ionsf
ori
nsur
ancer
efor
m compl
ement
ing
t
hosei
nit
iat
edi
nthef
inanci
alsect
or.Thecommi
tt
eesubmi
tt
edi
tsr
epor
tin1994,
r
ecommendi
ng t
hatt
hepr
ivat
esect
orbeper
mit
tedt
oent
ert
hei
nsur
ancei
ndust
ry.
For
eigncompani
esshoul
dent
erbyf
loat
ingI
ndi
ancompani
es,pr
efer
abl
yasj
oint
v
ent
ureswi
thI
ndi
anpar
tner
s.

Fol
l
owi
ng t
he r
ecommendat
ions oft
he Mal
hot
ra Commi
tt
ee,i
n 1999 t
he
I
nsur
anceRegul
ator
yandDev
elopmentAut
hor
it
y(I
RDA)wasconst
it
utedt
oregul
ate
anddev
elopt
hei
nsur
ancei
ndust
ryandwasi
ncor
por
atedi
nApr
il2000.Obj
ect
ivesof
t
he I
RDA i
ncl
ude pr
omot
ing compet
it
ion,t
o enhance cust
omersat
isf
act
ion wi
th
i
ncr
easedconsumerchoi
ceandl
owerpr
emi
umswhi
l
eensur
ingt
hef
inanci
alsecur
it
y
oft
hei
nsur
ancemar
ket
.

The I
RDA opened up t
he mar
keti
n August2000 wi
th an i
nvi
tat
ion f
or
r
egi
str
ati
onappl
i
cat
ions;
for
eigncompani
eswer
eal
l
owedowner
shi
pupt
o26per
cent
.
The aut
hor
it
y,wi
tht
he powert
ofr
ame r
egul
ati
ons underSect
ion 114A oft
he
I
nsur
anceAct
,1938,
has
 7

f
ramedr
egul
ati
onsr
angi
ngf
rom companyr
egi
str
ati
onst
othepr
otect
ionofi
nter
est
s
ofpol
i
cy-
hol
der
s,si
nce2000.

I
nDecember2000,t
hesubsi
diar
iesoft
heGener
alI
nsur
ance Cor
por
ati
on of
I
ndi
awer
erest
ruct
uredasi
ndependentcompani
esandt
heGI
Cwasconv
ert
edi
ntoa
nat
ionalr
e-i
nsur
er.Par
li
amentpassedabi
l
lde-
li
nki
ngt
hef
oursubsi
diar
iesf
rom t
he
GI
CinJul
y2002.Ther
ear
e28gener
ali
nsur
ancecompani
es,i
ncl
udi
ng t
he Expor
t
Cr
edi
t Guar
ant
eeCor
por
ati
onofI
ndi
aandt
heAgr
icul
tur
eInsur
anceCor
por
ati
onof
I
ndi
a,and 24 l
i
fe- i
nsur
ancecompani
esoper
ati
ngi
nthecount
ry.Wi
thbanki
ng
ser
vices,
insur
anceser
vicesaddaboutsev
enper
centt
oIndi
a’
sGDP.

I
n2013t
heI
RDAIat
tempt
edt
orai
set
hef
orei
gndi
recti
nvest
ment(
FDI
)li
miti
n
t
hei
nsur
ancesect
ort
o49per
cent f
rom i
tscur
rent26per
cent
.TheFDIl
i
miti
nthe
i
nsur
ancesect
orwasr
aisedt
o100per
centaccor
dingt
othebudget2019.

Hi
stor
yofi
nsur
ancei
nIndi
acanbest
udi
esi
nthef
oll
owi
ng5i
mpor
tantst
ages
1.Per
iodofMushr
oom gr
owt
h(1900-
1912)– dur
ingt
hisper
iodt
her
ewasa
mushr
oom gr
owt
h ofI
ndi
an compani
es and t
his was mai
nlydue t
o t
he
swadeshi mov
ement whi
chpr
ompt
edt
heboy
cot
tofBr
it
ishgoods,Br
it
ish
i
nst
it
uti
onsandev
ery
thi
ng Br
it
ish.Thei
ndi
scr
imi
nat
emushr
oom gr
owt
hof
i
nsur
ancecompani
esl
edt
otheappear
anceofsomeev
ilwhi
chhadt
obe
checked bypassi
ng I
ndi
an Li
fe Assur
ance Act
,1912.Fort
he f
ir
stt
ime
publ
i
shi
ngofr
etur
nsofl
i
fei
nsur
ancebeganf
rom 1914.

2.Per
iodofst
ruggl
e&st
eadygr
owt
h(1913-
1938)–t
he per
iod bet
ween t
wo
wor
ldwar
s.Thei
ndi
genouscompani
eshadt
opasst
hrought
ought
ime.Sudden
gr
owt
hofcompani
esduet
oimpet
usgi
venbyswadeshimov
ementbr
oughwi
th
i
tev
ilofaccumul
ati
onofweal
thandi
nexper
iencei
nbusi
ness.Thi
shasl
edt
o
economi
csl
ump,busi
nesshadt
ost
ruggl
efori
tsgr
owt
h.Manysmal
lof
fi
ces
hadt
obewoundupand f
ewt
hatsur
viv
edhadt
ofacet
hecompet
it
ionofmany
f
lour
ishi
ngf
orei
gnof
fi
ces.

Gov
ernmentwascompel
l
edt
opr
otectt
hei
nter
estofI
ndi
ani
nsur
ance
busi
nessandhencei
n1934Sr
iSCSenwasappoi
ntedasspeci
alof
fi
cert
o
i
nvest
igat
e and r
epor
tonr
efor
m ofi
nsur
ancel
aw i
nIndi
a. I
n1936a
commi
tt
eeunderchai
rmanshi
p ofSr
iNNSi
rcarwasappoi
ntedt
oexami
net
he
r
epor
tofspeci
alof
fi
cer
,whi
chl
edt
o
 8

t
hepassi
ng ofI
nsur
anceAct
,1938 whi
ch pr
ovi
desf
oruni
for
m cont
rolby
gov
ernmentov
eral
linsur
ers.For
eignof
fi
cesdi
scont
inuedt
hei
rbusi
nessi
n
I
ndi
a.

3.Per
iodofst
abi
l
ity&Consol
i
dat
ion(
1938-
1950)– bei
ng f
ree f
rom f
orei
gn
compet
it
ionI
ndi
anof
fi
cesgai
nedst
abi
l
ity
.Af
tersecondwor
ldwar swadeshi
mov
ementgai
nedst
rengt
handnat
ionalspi
ri
tincr
eased.Lar
ge amount
s of
capi
talwer
eav
ail
abl
ewi
tht
hem f
ori
nvest
menti
nthedev
elopi
ngi
ndust
ri
es.I
n
1945Cowasj
iJehangi
rcommi
tt
eecondemnedt
hemal
i
nvest
mentbyi
nsur
ance
compani
es,t
hisl
ed t
oregul
ati
onofi
nvest
mentandI
nsur
anceAct1938had
t
obeamendedsev
eral
times.Par
ti
ti
onoft
hecount
ryhadmadesi
tuat
ionwor
se.
Sr
iSRRanganat
hancommi
tt
eer
evi
ewedt
heent
ir
einsur
ancel
awandbasedon
t
hisr
epor
tamendmentof1950 wascar
ri
ed outwhi
ch madef
arr
eachi
ng
changes t
o make i
nsur
ance i
nst
it
uti
ons mor
e usef
ulf
ort
he count
ry’
s
economi
cgr
owt
h.

4.Per
iodofBoom &Nat
ional
i
zat
ion(
1950-upt
odat
e)–byFi
ve-
YearPl
ansI
ndi
a
has gr
own f
rom agr
ari
an soci
etyt
oindust
ri
ali
sed soci
ety
.Conf
idence i
n
domest
iccompani
esi
ncr
eased.Al
lthi
scont
ri
but
edt
oaboom i
ninsur
ance
busi
ness.Huge amountofcapi
talwasav
ail
abl
ewi
thi
nsur
ersandgov
ernment
f
ound i
n handy t
out
il
iset
hesef
undsf
ori
tsdev
elopment
alpl
ansandal
sot
o
ensur
ethei
nvest
ingpubl
i
c, abet
tersecur
it
y.Lat
eri
n1956Li
feI
nsur
anceAct
,
1956waspassednat
ional
i
singl
i
fei
nsur
ancebusi
nessi
nIndi
a.Fur
theri
n1972
t
he Gener
ali
nsur
ancewasnat
ional
i
sed bypassi
ngofGener
alI
nsur
ance
(
Emer
gencyPr
ovi
sions)Act
,1972.Gener
ali
nsur
ancecor
por
ati
onwasf
ormed
wi
thf
oursubsi
diar
ies.

5.Er
aofPr
ivat
izat
ion(
1991onwar
ds)–i
nsur
ancesect
oropent
opr
ivat
eent
it
ies
on t
he r
ecommendat
ions ofMal
hot
ra Commi
tt
ee.Bot
h publ
i
c and pr
ivat
e
compani
es pl
ayed i
mpor
tantr
ole si
mul
taneousl
y.Gr
owt
h ofmor
e pr
ivat
e
ent
it
ieshasl
edt
o t
hepassi
ng ofI
nsur
anceRegul
ator
yandDev
elopment
Aut
hor
it
yAct
,1999t
ocont
rol
andr
egul
atei
nsur
ancesect
ori
nIndi
a.

Regi
str
ati
onofI
nsur
anceCompani
es

I
nsur
anceAct1938pr
ovi
desundersec3t
hatnoper
sonshal
lst
artanew
busi
nessonanybr
anchoft
hei
nsur
ancebusi
ness,af
tert
hecommencementofI
RDA
Act
,1999,
unl
esshehasobt
ainedacer
ti
fi
cat
eofr
egi
str
ati
on.
 9

Pr
ocedur
eforr
egi
str
ati
on

Ani
ncor
por
atedcompanymustber
egi
ster
edunderI
RDA.Sec3oft
heI
RDAAct
pr
ovi
desf
orf
il
ingappl
i
cat
ionf
orr
egi
str
ati
on.

I
mpor
tantpr
ovi
sionsofI
nsur
anceAct1938

Pr
ohi
bit
ionoft
ransact
ionofi
nsur
ancebusi
nessbycer
tai
nper
sons,
-
2C.(
1)Sav
easher
einaf
terpr
ovi
ded,noper
sonshal
l
,af
tert
hecommencementoft
he
I
nsur
ance (
Amendment
)Act
,1950 (
47 of1950)
,begi
nto car
ryon anycl
assof
i
nsur
ancebusi
nessi
nIndi
aand no i
nsur
ercar
ryi
ng onanycl
ass of i
nsur
ance
busi
ness i
nIndi
ashal
l af
tert
heexpi
ryofoney
earf
rom suchcommencement
,
cont
inuet
ocar
ryonanysuchbusi
nessunl
esshei
s-
(
a)apubl
i
ccompany
,or
(
b)asoci
etyr
egi
ster
edundert
heCo-
oper
ati
veSoci
eti
esAct
,1912(
2of1912)
,orunder
anyot
herl
awf
ort
het
imebei
ngi
nfor
cei
nanySt
ater
elat
ingt
oco-
oper
ati
vesoci
eti
es,
or
(
c)abodycor
por
atei
ncor
por
atedundert
hel
awofanycount
ryout
sideI
ndi
anotbei
ng
oft
henat
ureofapr
ivat
ecompany
:
Pr
ovi
dedt
hatt
heCent
ral
Gov
ernmentmay
,bynot
if
icat
ioni
ntheof
fi
cial
Gazet
te,
exemptf
rom t
heoper
ati
onoft
hissect
iont
osuchext
entf
orsuchper
iodandsubj
ectt
o
suchcondi
ti
onsasi
tmayspeci
fy,
anyper
sonori
nsur
erf
ort
hepur
poseofcar
ryi
ngon
t
hebusi
ness ofgr
ant
ingsuper
annuat
ional
l
owancesandannui
ti
esoft
henat
ure
speci
fi
ed i
nsub-
clause (
c)ofcl
ause(
11)ofSect
ion2orf
ort
hepur
poseofcar
ryi
ng
onanygener
ali
nsur
ancebusi
ness:
Pr
ovi
dedf
urt
hert
hati
nthecaseofani
nsur
ercar
ryi
ngonanygener
ali
nsur
ance
busi
nessnosuchnot
if
icat
ionshal
lbei
ssuedhav
ingef
fectf
ormor
ethan t
hreey
ear
s
atanyonet
ime:
Pr
ovi
dedal
sot
hatnoi
nsur
erot
hert
hananI
ndi
ani
nsur
ancecompanyshal
l
begi
ntocar
ryonanycl
assofi
nsur
ancebusi
nessi
nIndi
aundert
hisActon oraf
ter
t
he commencementoft
heI
nsur
anceRegul
ator
yandDev
elopmentAut
hor
it
yofI
ndi
a
Act
,1999.
(
2)Ev
erynot
if
icat
ioni
ssuedundersubsect
ion(
1)shal
lbel
aidbef
orePar
li
amentas
soonasmaybeaf
teri
tisi
ssued.
(
3)Not
wit
hst
andi
ngany
thi
ngcont
ainedi
nsub-
sect
ion(
1),ani
nsur
anceco-
oper
ati
ve
soci
etymaycar
ryonanycl
assofi
nsur
ancebusi
nessi
nIndi
aundert
hisActonoraf
ter
t
hecommencementoft
heI
nsur
ance(
Amendment
)Act
,2002.
 10

Regi
str
ati
on
3.(
1)Noper
sonshal
l
,af
tercommencementoft
hisAct
,bei
ngt
ocar
ryonanycl
assof
i
nsur
ancebusi
nessi
nIndi
aand no i
nsur
ercar
ryi
ngonany cl
assof i
nsur
ance
busi
nessi
nIndi
ashal
l
,af
tert
heexpi
ryoft
hreemont
hsf
rom t
hecommencementof
t
hisAct
,cont
inuet
ocar
ryonanysuchbusi
ness,unl
esshehasobt
ainedf
rom t
he
Aut
hor
it
yacer
ti
fi
cat
eofr
egi
str
ati
onf
ort
hepar
ti
cul
arcl
assofi
nsur
ancebusi
ness:
Pr
ovi
dedt
hati
ncaseofani
nsur
erwhowascar
ryi
ngonanycl
assofi
nsur
ance
busi
nessi
nIndi
aatt
hecommencementoft
hisAct
,fai
l
uret
oobt
aina cer
ti
fi
cat
e of
r
egi
str
ati
oni
naccor
dancewi
tht
her
equi
rement
soft
hissub-
clauseshal
lnotoper
atet
o
i
nval
i
dat
eanycont
ractofi
nsur
anceent
eredi
ntobyhi
mifbef
oresuchdat
easmaybe
f
ixedi
nthi
sbehal
fbyt
heCent
ralGov
ernmentbynot
if
icat
ioni
ntheof
fi
cialGazet
te,
he
hasobt
ainedt
hatcer
ti
fi
cat
e:
Pr
ovi
dedf
urt
hert
hataper
sonori
nsur
er,ast
hecasemaybe,car
ryi
ngonany
cl
assofi
nsur
ancebusi
nessi
nIndi
a,onorbef
oret
hecommencementoft
heI
nsur
ance
Regul
ator
yandDev
elopmentAut
hor
it
yofI
ndi
aAct
,1999,f
orwhi
chno r
egi
str
ati
on
cer
ti
fi
cat
e was necessar
ypr
iort
osuchcommencement
,maycont
inuet
odosof
ora
per
iodoft
hreemont
hsf
rom suchcommencementor
,ifhehadmadeanappl
i
cat
ion
f
orsuchr
egi
str
ati
onwi
thi
nthe sai
dper
iodoft
hreemont
hs,t
il
lthedi
sposalofsuch
appl
i
cat
ion:
Pr
ovi
dedal
sot
hatanycer
ti
fi
cat
eofr
egi
str
ati
on,obt
ainedi
mmedi
atel
ybef
ore
t
hecommencementoft
heI
nsur
anceRegul
ator
yandDev
elopmentAut
hor
it
yofI
ndi
a
Act
,1999,shal
lbedeemedt
ohav
ebeenobt
ainedf
rom t
heAut
hor
it
yin accor
dance
wi
tht
hepr
ovi
sionsoft
hisAct
(
2)Ev
eryappl
i
cat
ion f
orr
egi
str
ati
on shal
lbe made i
n such manneras maybe
det
ermi
nedbyt
her
egul
ati
onsmadebyt
heAut
hor
it
yandshal
lbeaccompani
edby
-
(
a)a cer
ti
fi
ed copyoft
he memor
andum and ar
ti
cles ofassoci
ati
on,wher
ethe
appl
i
canti
sacompanyandi
ncor
por
atedundert
heI
ndi
anCompani
esAct
,1913(
7of
1913)
,orundert
heI
ndi
anCompani
esAct
,1882(
6of1882)
,orundert
heI
ndi
an
Compani
esAct
,1866(
10of1866)
;orunderanyActr
epeal
edt
her
eby
,or
,int
hecaseof
anyot
heri
nsur
erspeci
fi
edi
nsub-cl a)(
ause( ii
)orsub-
cl b)ofcl
ause( 9)of
ause(
sect
ion2,acer
ti
fi
edcopyoft
hedeedofpar
tner
shi
poroft
hedeedofconst
it
uti
onof
t
hecompany
,ast
hecasemaybe,or
,int
hecase ofani
nsur
erhav
inghi
spr
inci
pal
pl
aceofbusi
nessordomi
cil
eout
sideI
ndi
a,t
hedocumentspeci
fi
edi
nCl
ause(
a)of
Sect
ion63;
(
b)t
hename,addr
essandt
heoccupat
ion,i
fany
,oft
hedi
rect
orswher
einsur
eri
sa
companyi
ncor
por
atedundert
heI
ndi
anCompani
esAct
,1913(
7of1913)
,orundert
he
I
ndi
an
 11

Compani
esAct
,1882(
6of1882)
,orundert
heI
ndi
anCompani
esAct
,1866(
10of
1866)
,orunderanyActr
epeal
edt
her
eby
,andi
nthecaseofani
nsur
erspeci
fi
edi
nsub-
cl a)(
ause( ii
)ofcl
ause(
9)ofsect
ion2t
henamesandaddr
essesoft
hepr
opr
iet
ors
andoft
hemanageri
nIndi
a,andi
nanyot
hercaset
hef
ulladdr
essoft
hepr
inci
pal
of
fi
ceoft
hei
nsur
eri
nIndi
a,andt
henamesoft
hedi
rect
orsandt
hemanageratsuch
of
fi
ceandt
he name andaddr
essofsomeone ormor
eper
sonsr
esi
denti
nIndi
a,
aut
hor
izedt
oacceptanynot
icer
equi
redt
obeser
vedont
hei
nsur
er;
(
c)ast
atementoft
hecl
assorcl
assesofi
nsur
ancebusi
nessdoneort
obedone,and
a st
atementt
hatt
heamountr
equi
redt
obedeposi
tedbysect
ion7orsect
ion98
bef
ore appl
i
cat
ion f
orr
egi
str
ati
on i
smadehasbeen deposi
ted t
oget
herwi
tha
cer
ti
fi
cat
efr
om t
heReser
veBankofI
ndi
ashowi
ngt
heamountdeposi
ted;
(
d)wher
ethepr
ovi
sionsofsect
ion6orsect
ion97appl
y,adecl
arat
ionv
eri
fi
ed byan
af
fi
dav
itmadebyt
hepr
inci
palof
fi
ceroft
hei
nsur
eraut
hor
izedi
nthatbehal
fthatt
he
pr
ovi
sionsoft
hosesect
ionsast
opai
d-upequi
tycapi
talorwor
kingcapi
talhav
ebeen
compl
i
edwi
th;
(
e)i
nthecaseofani
nsur
erhav
inghi
spr
inci
palpl
aceofbusi
nessordomi
cil
eout
side
I
ndi
a,ast
atementv
eri
fi
edbyanaf
fi
dav
itmadebyt
hepr
inci
palof
fi
ceroft
hei
nsur
er
set
ti
ngf
ort
hther
equi
rement
s(i
fany
)notappl
i
cabl
etonat
ional
soft
hecount
ryi
n
whi
chsuchi
nsur
eri
sconst
it
uted,
incor
por
atedordomi
cil
edwhi
char
eimposedbyt
he
l
awsorpr
act
iceof t
hatcount
ryuponI
ndi
annat
ional
sasacondi
ti
onofcar
ryi
ngon
i
nsur
ancebusi
nessi
nthatcount
ry;
(
f)acer
ti
fi
edcopyoft
hepubl
i
shedpr
ospect
us,
ifany
,andoft
hest
andar
dpol
i
cyf
orms
oft
hei
nsur
erandst
atement
soft
heassur
edr
ates,adv
ant
ages,t
ermsandcondi
ti
ons
t
o beof
fer
ed i
n connect
ion wi
thi
nsur
ancepol
i
ciest
oget
herwi
th acer
ti
fi
cat
ein
connect
ion wi
thl
i
fei
nsur
ancebusi
nessbyanact
uar
ythatsuchr
ates,adv
ant
ages,
t
ermsandcondi
ti
onsar
ewor
kabl
eandsound:
Pr
ovi
dedt
hati
nthecaseofmar
ineacci
dentandmi
scel
l
aneous i
nsur
ance
busi
nessot
hert
hanwor
kmen'
scompensat
ionandmot
orcari
nsur
ancet
he abov
e
r
equi
rement
sregar
dingpr
ospect
us,
for
msandst
atement
sshal
lbecompl
i
edwi
thonl
y
i
nsof
arast
hepr
ospect
us,
for
msandst
atement
smaybeav
ail
abl
e;and
(
g)t
her
ecei
ptshowi
ngpay
mentoff
eeasmaybedet
ermi
nedbyt
her
egul
ati
onswhi
ch
shal
lnotexceedf
if
tyt
housandr
upeesf
oreachcl
assofbusi
nessasmaybespeci
fi
ed
byt
her
egul
ati
onsmadebyt
heAut
hor
it
y;
(
h)suchot
herdocument
sasmaybespeci
fi
edbyt
her
egul
ati
onsmadebyt
heAut
hor
it
y.
 12

(
2A)I
f,onr
ecei
ptofanappl
i
cat
ionf
orr
egi
str
ati
onandaf
termaki
ng suchi
nqui
ryas
hedeemsf
it
,theCont
rol
l
eri
ssat
isf
iedt
hat
—
(
a)t
hef
inanci
alcondi
ti
onandt
hegener
alchar
act
erofmanagementoft
he appl
i
cant
ar
esound;
(
b)t
hev
olumeofbusi
nessl
i
kel
ytobeav
ail
abl
eto,andt
hecapi
talst
ruct
ureand
ear
ningpr
ospect
sof
,theappl
i
cantwi
l
lbeadequat
e;
(
c)t
hei
nter
estoft
hegener
alpubl
i
c wi
l
lbeser
vedi
fthe cer
ti
fi
cat
eofr
egi
str
ati
oni
s
gr
ant
ed t
otheappl
i
canti
nrespectoft
hecl
assorcl
assesofi
nsur
ancebusi
ness
speci
fi
edi
ntheappl
i
cat
ion;
and
(
d)t
heappl
i
canthascompl
i
edwi
tht
hepr
ovi
sionsofSect
ions2-
C,5,31Aand32and
hasf
ulf
il
ledal
lther
equi
rement
soft
hissect
ionappl
i
cabl
etohi
m,t
heAut
hor
it
ymay
r
egi
stert
heappl
i
cantasani
nsur
erandgr
anthi
m acer
ti
fi
cat
eofr
egi
str
ati
on.
(
2AA)TheAut
hor
it
yshal
lgi
vepr
efer
encet
oregi
stert
heappl
i
cantandgr
anthi
ma
cer
ti
fi
cat
eofr
egi
str
ati
oni
fsuchappl
i
cantagr
ees,i
nthef
orm andmannerasmaybe
speci
fi
edbyt
her
egul
ati
onsmadebyt
heAut
hor
it
y,t
ocar
ryont
hel
i
fei
nsur
ance
busi
ness orgener
ali
nsur
ancebusi
nessf
orpr
ovi
dingheal
thcov
ert
oindi
vi
dual
sor
gr
oupofi
ndi
vi
dual
s.
(
2B)Wher
etheAut
hor
it
yref
usesr
egi
str
ati
on;heshal
lrecor
dther
easons f
orsuch
deci
sionandshal
lfur
nishacopyt
her
eoft
otheappl
i
cant
.
(
2C)Anyper
sonaggr
iev
edbyt
hedeci
sionoft
heAut
hor
it
yref
usi
ngr
egi
str
ati
onmay
,
wi
thi
nthi
rt
yday
sfr
om t
hedat
eonwhi
chacopyoft
hedeci
sioni
srecei
vedbyhi
m,
appeal
tot
heCent
ral
Gov
ernment
.
(
2D)Thedeci
sionoft
heCent
ral
Gov
ernmentonsuchappeal
shal
lbef
inal
andshal
lnot
bequest
ionedbef
oreanyCour
t.
(
3)Not
wit
hst
andi
ngany
thi
ngcont
ainedi
nsub-
sect
ion(
2A)
,int
hecaseofanyi
nsur
er
hav
inghi
spr
inci
palpl
aceofbusi
nessordomi
cil
eout
sideI
ndi
a,t
heAut
hor
it
y,shal
l
wi
thhol
dregi
str
ati
onorshal
lcancelar
egi
str
ati
onal
readymade,i
fhei
ssat
isf
iedt
hat
i
nthecount
ryi
nwhi
chsuchi
nsur
erhashi
spr
inci
palpl
aceofbusi
nessordomi
cil
e
I
ndi
annat
ional
s ar
e debar
redbyt
hel
aw orpr
act
iceoft
hecount
ryr
elat
ingt
o,or
appl
i
ed t
o i
nsur
ance f
rom car
ryi
ng ont
hebusi
nessofi
nsur
ance,ort
hatany
r
equi
rementi
mposed on such i
nsur
erundert
he pr
ovi
sions ofsect
ion 62 i
s not
sat
isf
ied.
(
4)TheAut
hor
it
yshal
lcancelt
her
egi
str
ati
onofani
nsur
erei
therwhol
l
yori
nsof
aras
i
trel
atest
oapar
ti
cul
arcl
assofi
nsur
ancebusi
ness,
ast
hecasemaybe,
-
(
a) i
fthei
nsur
erf
ail
stocompl
ywi
tht
hepr
ovi
sionsofsect
ion7orsect
ion98 ast
o
deposi
ts,
or
 13

(
aa)i
fthei
nsur
erf
ail
s,atanyt
ime,t
ocompl
ythepr
ovi
sionsofSec.64VAast
othe
excessoft
hev
alueofhi
sasset
sov
ert
heamountofhi
sli
abi
l
iti
es;
or
(
b) i
fthei
nsur
eri
sinl
i
qui
dat
ionori
sadj
udgedani
nsol
vent
,or
(
c) i
fthebusi
nessoracl
assoft
he busi
nessoft
hei
nsur
erhasbeent
ransf
err
edt
o
anyper
sonorhasbeent
ransf
err
edt
ooramal
gamat
edwi
tht
hebusi
nessofanyot
her
i
nsur
er,
or
(
d) i
fthewhol
eoft
hedeposi
tmadei
nrespect ofi
nsur
ancebusi
nesshasbeen
r
etur
nedt
othei
nsur
erunderSec.9,
or
(
e) i
f,i
nthecaseofani
nsur
erspeci
fi
edi
nsub-
cl c)
ause( ofcl 9)ofsect
ause( ion2,
t
hest
andi
ngcont
ractr
efer
redt
oint
hatsub-
clausei
s cancel
l
edori
ssuspendedand
cont
inuest
obesuspendedf
oraper
iodofsi
xmont
hs,
or
(
ee)i
ftheCent
ralGov
ernmentsodi
rect
sundersub-sect
ion(
4)ofSec.33]andt
he
Aut
hor
it
ymaycancel
ther
egi
str
ati
onofani
nsur
er-
(
f)i
fthei
nsur
ermakesdef
aul
tincompl
yi
ngwi
th,oract
sincont
rav
ent
ionofany
r
equi
rementoft
hisActorofanyr
uleoranyr
egul
ati
onoror
dermadeor
,anydi
rect
ion
i
ssuedt
her
eunder
,or
(
g)i
ftheAut
hor
it
yhasr
easont
obel
i
evet
hatanycl
aim upont
hei
nsur
erar
isi
ng i
n
I
ndi
a underanypol
i
cyofi
nsur
ancer
emai
nsunpai
dfort
hreemont
hsaf
terf
inal
j
udgmenti
nregul
arcour
seofl
aw,
or
(
h)i
fthe i
nsur
ercar
ri
es on anybusi
ness ot
hert
han i
nsur
ance busi
ness orany
pr
escr
ibedbusi
ness,
or
(
i) i
fthei
nsur
ermakesadef
aul
tincompl
yi
ngwi
thanydi
rect
ioni
ssued oror
der
made,ast
hecasemaybe,byt
heAut
hor
it
yundert
he I
nsur
ance Regul
ator
y and
Dev
elopmentAut
hor
it
yofI
ndi
aAct
,1999,
or
(
j) i
fthei
nsur
ermakesadef
aul
tincompl
yi
ngwi
th,oract
sincont
rav
ent
ionof
,any
r
equi
rementoft
heCompani
esAct
,1956(
1of1956)
,ort
heLi
feI
nsur
anceCor
por
ati
on
Act
,1956(
31of1956)
,ort
heGener
alI
nsur
anceBusi
ness(
Nat
ional
i
zat
ion)Act
,1972
(
57of1972)
,ort
heFor
eignExchangeRegul
ati
onAct
,1973(
46of1973)
.
(
5)Whent
heAut
hor
it
ywi
thhol
dsorcancel
sanyr
egi
str
ati
onundersub-
sect
ion(
3)or
cl
ause(
a) ause(
,cl aa)
,cl e)
ause( ause(
,cl ee)
,cl f
ause(),cl g)orcl
ause( h)of
ause (
sub-
sect
ion(
4),heshal
lgi
venot
icei
nwr
it
ingt
othei
nsur
erofhi
sdeci
sion,andt
he
deci
sionshal
ltakeaf
fectonsuchdat
eashemayspeci
fyi
nthatbehal
fint
henot
ice,
suchdat
enotbei
ngl
esst
hanonemont
hnormor
ethant
womont
hsf
rom t
hedat
eof
t
her
ecei
ptoft
henot
icei
ntheor
dinar
ycour
seoft
ransmi
ssi
on.
 14

(
5A)Whent
heAut
hor
it
ycancel
sanyr
egi
str
ati ause(
onundercl b) ause(
,cl c)orcl
ause
d)ofsub-
( sect
ion(
4)t
hecancel
l
ati
onshal
ltakeef
fectont
hedat
eonwhi
chnot
iceof
t
heor
derofcancel
l
ati
oni
sser
vedont
hei
nsur
er.
(
5B)Whenar
egi
str
ati
oni
scancel
l
edt
hei
nsur
ershal
lnot
,af
tert
hecancel
l
ati
onhas
t
akenef
fect
,ent
eri
ntoanynewcont
ract
sofi
nsur
ance,butal
lri
ght
sandl
i
abi
l
iti
esi
n
r
espectofcont
ract
sofi
nsur
anceent
eredi
ntobyhi
m bef
ore suchcancel
l
ati
ont
akes
ef
fectshal
l
,subj
ect t
othe pr
ovi
sions ofsub-
sect
ion (
5D)
,cont
inue as i
fthe
cancel
l
ati
onhadnott
akenpl
ace.
(
5C)Wher
ear
egi
str
ati
oni
s cancel
l ause(
edundercl a),cl
ause(
aa)
,cl
ause(
e),cl
ause
f
(),cl
ause(
g)orcl h)orcl
ause( i
ause()orcl j
ause()ofsub-
sect
ion(
4),t
heAut
hor
it
y
mayathi
sdi
scr
eti
onr
evi
vet
her
egi
str
ati
on,i
fthei
nsur
erwi
thi
nsi
xmont
hsf
rom t
he
dat
eonwhi
cht
hecancel
l
ati
ont
ookef
fectmakest
hedeposi
tsr
equi
redbysect
ion7or
Sect
ion98,orcompl
i
eswi
tht
hepr
ovi
sionsofSect
ion64VAast
otheexcessoft
he
v
alueof hi
sasset
sov
er t
he amountofhi
sli
abi
l
iti
esorhashi
sst
andi
ngcont
ract
r
est
oredorhashadanappl
i
cat
ionundersub-
sect
ion(
4)ofsect
ion3Aaccept
ed,or
sat
isf
iest
heAut
hor
it
ythatnocl
aim uponhi
m such asi
sref
err
edt
oincl
ause(
g)of
sub-
sect
ion(
4)r
emai
nsunpai
dort
hathehascompl
i
edwi
th anyr
equi
rementoft
his
Actort
heI
nsur
anceRegul
ator
yandDev
elopmentAut
hor
it
yofI
ndi
aAct
,1999orofany
r
uleoranyr
egul
ati
on,oror
dermadet
her
eunderoranydi
rect
ioni
ssuedundert
hose
Act
sthathehasceasedt
ocar
ryonanybusi
nessot
hert
hani
nsur
ancebusi
nessorany
pr
escr
ibedbusi
ness,
ast
hecasemaybe,andcompl
i
eswi
thanydi
rect
ionswhi
chmay
begi
vent
ohi
m byt
heAut
hor
it
y.
(
5D)Wher
eli
ther
egi
str
ati
onofani
nsur
ancecompanyi
scancel
l
edundersub-
sect
ion
(
4),t
he Aut
hor
it
ymay
,af
terexpi
ryofsi
x mont
hs f
rom t
he dat
e on whi
ch t
he
cancel
l
ati
ont
ookef
fect
,appl
ytot
heCour
tforanor
dert
owi
ndupt
hei
nsur
ance
company
,ort
owi
ndupt
heaf
fai
rsoft
hecompanyi
nrespectofacl
assofi
nsur
ance
busi
ness,unl
esst
her
egi
str
ati
on oft
he i
nsur
ancecompanyhasbeenr
evi
vedunder
sub-
sect
ion(
5C)oranappl
i
cat
ionf
orwi
ndi
ngupt
hecompanyhasbeenal
ready
pr
esent
edt
otheCour
t.TheCour
tmaypr
oceedasi
fanappl
i
cat
ionundert
hissub-
sect
ionwer
eanappl
i
cat
ionundersub-
sect
ion(
2)ofsect
ion53,orsub-
sect
ion(
1)of
Sec.58,
ast
hecasemaybe.
(
5E)TheAut
hor
it
ymay
,byor
der
,suspendorcancelanyr
egi
str
ati
oni
nsuchmanner
asmaybedet
ermi
nedbyt
her
egul
ati
onsmadebyi
t:
Pr
ovi
dedt
hatnoor
derundert
hissub-
sect
ionshal
lbemadeunl
esst
he per
son
concer
nedhasbeengi
venar
easonabl
eoppor
tuni
tyofbei
nghear
d.
(
6)[
***
]
 15

(
7)TheAut
hor
it
ymay
,onpay
mentoft
hepr
escr
ibedf
ee,notexceedi
ngf
iver
upees,
i
ssueadupl
i
cat
ecer
ti
fi
cat
eofr
egi
str
ati
ont
orepl
aceacer
ti
fi
cat
elost
,dest
roy
ed or
mut
il
ated,ori
n anyot
hercasewher
ehei
sofopi
niont
hatt
hei
ssueofadupl
i
cat
e
cer
ti
fi
cat
eisnecessar
y.

Renewalofr
egi
str
ati
on
3A.(
1)Ani
nsur
erwhohasbeengr
ant
edacer
ti
fi
cat
eofr
egi
str
ati
on undersect
ion 3
shal
lhav
ether
egi
str
ati
onr
enewedannual
l
yforeachy
earaf
ter t
hatendi
ngont
he
31stdayof Mar
ch,af
tert
he commencementoft
he I
nsur
ance Regul
ator
yand
Dev
elopmentAut
hor
it
yofI
ndi
aAct
,1999.
(
2)Anappl
i
cat
ionf
ort
her
enewalofar
egi
str
ati
onf
oranyy
earshal
lbemadebyt
he
i
nsur
er t
otheAut
hor
it
ybef
oret
he31stdayofDecemberoft
hepr
ecedi
ngy
ear
,and
shal
lbeaccompani
edaspr
ovi
dedi
nsub-
sect
ion
(
3)byev
idenceofpay
mentoft
hef
eeasdet
ermi
nedbyt
her
egul
ati
onsmadebyt
he
Aut
hor
it
ywhi
chmayv
aryaccor
dingt
othet
otalgr
osspr
emi
um wr
it
tendi
recti
nIndi
a,
dur
ingt
hey
earpr
ecedi
ngt
hey
eari
nwhi
cht
heappl
i
cat
ioni
srequi
redt
obemade
undert
hissect
ion,byt
hei
nsur
eri
nthecl
assofi
nsur
ancebusi
nesst
owhi
cht
he
r
egi
str
ati
onr
elat
esbutshal
lnot
—
(
i)exceedone-
four
thofonepercent
.ofsuchpr
emi
um i
ncomeorr
upeesf
ivecr
ores,
whi
chev
eri
sless;
(
ii
)bel
ess,
inanycase,
thanf
ivehundr
edr
upeesf
oreachcl
assofi
nsur
ancebusi
ness:
Pr
ovi
dedt
hati
nthecaseofani
nsur
ercar
ryi
ngonsol
elyr
e-i
nsur
ancebusi
ness,
t
hepr
ovi
sionsoft
hissub-
sect
ionshal
lappl
ywi
tht
hemodi
fi
cat
iont
hati
nst
eadoft
he
t
otalgr
osspr
emi
um wr
it
tendi
recti
nIndi
a,t
het
otalpr
emi
umsi
nrespectoff
acul
tat
ive
r
e-i
nsur
ancesaccept
edbyhi
minI
ndi
ashal
lbe-
takeni
ntoaccount
.
(
3)Thef
eeasdet
ermi
nedbyt
her
egul
ati
onsmadebyt
heAut
hor
it
yfort
her
enewalofa
r
egi
str
ati
onf
oranyy
earshal
l
,bepai
dint
otheReser
veBankofI
ndi
a,orwher
ether
eis
noof
fi
ceoft
hatBank,
int
otheI
mper
ialBankofI
ndi
aact
ingast
heagentoft
hatBank,
ori
nto anyGov
ernmentt
reasur
y,and t
he r
ecei
ptshal
lbe sental
ong wi
tht
he
appl
i
cat
ionf
orr
enewaloft
her
egi
str
ati
on.
4)I
( fani
nsur
erf
ail
stoappl
yforr
enewalofr
egi
str
ati
onbef
oret
hedat
especi
fi
edi
n
sub-sect
ion(
2)t
heAut
hor
it
ymay
,sol
ongasanappl
i
cat
iont
otheCour
tundersub-
sect
ion (
5-D)ofsect
ion3hasnotbeenmade,acceptanappl
i
cat
ionf
orr
enewalof
t
her
egi
str
ati
ononr
ecei
ptf
rom t
hei
nsur
eroft
hef
eepay
abl
ewi
tht
heappl
i
cat
ionand
such penal
ty,notexceedi
ngt
hef
eeasdet
ermi
nedbyt
her
egul
ati
onsmadeby t
he
Aut
hor
it
y,andpay
abl
ebyhi
m,ast
heAut
hor
it
ymayr
equi
re:
 16

Pr
ovi
dedt
hatanappealshal
lli
etot
heCent
ral Gov
ernmentf
rom anor
der
passedbyt
heAut
hor
it
yimposi
ngapenal
tyont
hei
nsur
er
5)TheAut
( hor
it
yshal
l
,onf
ulf
il
mentbyt
hei
nsur
eroft
her
equi
rement
soft
hissect
ion,
r
enewt
her
egi
str
ati
onandgr
anthi
m acer
ti
fi
cat
eofr
enewal
ofr
egi
str
ati
on.

Cer
ti
fi
cat
ionofsoundnessoft
ermsofl
if
einsur
ancebusi
ness

(
3B)I
f,whenconsi
der
inganappl
i
cat
ionf
orr
egi
str
ati
onundersect
ion3oratanyot
her
t
ime, i
tappear
stot
heAut
hor
it
ythatt
heassur
edr
ates,adv
ant
ages, t
ermsand
condi
ti
onsof
fer
edort
obeof
fer
edi
nconnect
ionwi
thl
i
fei
nsur
ancebusi
nessar
ein
anyr
espectnotwor
kabl
eorsound,hemayr
equi
ret
hatast
atementt
her
eofshal
lbe
submi
tt
edt
oanact
uar
yappoi
ntedbyt
hei
nsur
erf
ort
hepur
poseandappr
ovedbyt
he
Aut
hor
it
y,andmaybyor
deri
nwr
it
ingf
urt
herr
equi
ret
hei
nsur
ert
omakewi
thi
nsuch
t
imeasmaybespeci
fi
edi
ntheor
dersuchmodi
fi
cat
ionsi
nthesai
drat
es,
adv
ant
ages,
t
erms,orcondi
ti
ons,ast
hecasemaybe,ast
he sai
dact
uar
ymayr
epor
ttobe
necessar
ytoenabl
ehi
mtocer
ti
fyt
hat t
he sai
d r
ates, adv
ant
ages,t
ermsand
condi
ti
onsar
ewor
kabl
eandsound.

I
NSURANCEREGULATORYANDDEVELOPMENTAUTHORI
TY(
IRDA)

Af
ter1991duet
oli
ber
ali
zat
ioni
ntheeconomi
cpol
i
cy,manypr
ivat
epl
ayer
s
st
art
edt
hei
rbusi
nessi
nIndi
awhi
chhasbr
oughtwi
thi
tthei
rownev
ilofunheal
thy
compet
it
ion. Hence a Mal
hot
ra commi
tt
ee was f
ormed t
o ef
fect
ivel
yregul
ate
i
nsur
ancecompani
es.Fol
l
owi
ngt
her
ecommendat
ionsoft
heMal
hot
raCommi
tt
ee,i
n
1999 t
he I
nsur
anceRegul
ator
yandDev
elopmentAut
hor
it
y(I
RDA)wasconst
it
utedt
o
r
egul
ateand dev
elop t
hei
nsur
ancei
ndust
ryand wasi
ncor
por
ated i
n Apr
il2000.
Obj
ect
ives of t
he I
RDA i
ncl
ude pr
omot
ing compet
it
ion,t
o enhance cust
omer
sat
isf
act
ionwi
thi
ncr
easedconsumerchoi
ceandl
owerpr
emi
umswhi
l
eensur
ingt
he
f
inanci
alsecur
it
yoft
hei
nsur
ancemar
ket
.

Sect
ion4oft
heI
RDAIAct1999speci
fi
est
heaut
hor
it
y'
scomposi
ti
on.I
tisat
en-
memberbodyconsi
sti
ngofachai
rman,f
ivef
ull
-t
imeandf
ourpar
t-
ti
memember
s
appoi
nted byt
hegov
ernmentofI
ndi
a.Atpr
esent(
1Sept
,2018)
,theaut
hor
it
yis
chai
redbyDr
.Subhash
C.Khunt
iaandi
tsf
ull
-t
imemember
sar
eMr
sT.
L.Al
amel
u,K.Ganesh,
Pour
nimaGupt
e,
Pr
aveenKut
umbeandSuj
ayBanar
ji
.
 17

Funct
ionsofI
RDA
Thef
unct
ionsoft
heI
RDAIar
edef
inedi
nSect
ion14oft
heI
RDAIAct
,1999and
i
ncl
ude:
1.I
ssui
ng,
renewi
ng,
modi
fyi
ng,
wit
hdr
awi
ng,
suspendi
ngorcancel
l
ingr
egi
str
ati
ons
2.Pr
otect
ingpol
i
cyhol
deri
nter
est
s
3.Speci
fyi
ngqual
i
ficat
ions,
thecodeofconductandt
rai
ningf
ori
nter
medi
ari
es
andagent
s
4.Speci
fyi
ngt
hecodeofconductf
orsur
vey
orsandl
ossassessor
s
5.Pr
omot
ingef
fi
ciencyi
ntheconductofi
nsur
ancebusi
nesses
6.Pr
omot
ingandr
egul
ati
ngpr
ofessi
onal
organi
sat
ionsconnect
edwi
tht
he
i
nsur
anceandr
e-i
nsur
ancei
ndust
ry
7.Lev
yingf
eesandot
herchar
ges
8.I
nspect
ingandi
nvest
igat
ingi
nsur
ers,
int
ermedi
ari
esandot
herr
elev
antor
gani
sat
ions
9.Regul
ati
ngr
ates,adv
ant
ages,t
ermsandcondi
ti
onswhi
chmaybeof
fer
edby
i
nsur
ers notcov
eredbyt
heTar
if
fAdv
isor
yCommi
tt
eeundersect
ion64U of
t
heI
nsur
anceAct
,1938(
4of1938)
10.
Speci
fyi
nghowbooksshoul
dbekept
11.
Regul
ati
ngcompanyi
nvest
mentoff
unds
12.
Regul
ati
ngamar
ginofsol
vency
13.
Adj
udi
cat
ingdi
sput
esbet
weeni
nsur
ersandi
nter
medi
ari
esori
nsur
ancei
nter
medi
ari
es
14.
Super
visi
ngt
heTar
if
fAdv
isor
yCommi
tt
ee
15.
Speci
fyi
ng t
he per
cent
age of pr
emi
um i
ncome t
ofi
nance schemes f
or
pr
omot
ingandr
egul
ati
ngpr
ofessi
onal
organi
sat
ions
16.
Speci
fyi
ngt
heper
cent
ageofl
i
feandgener
al-
insur
ancebusi
nessunder
taken i
n
t
her
ural
orsoci
alsect
or
17.
Speci
fyi
ng t
hef
orm and t
hemanneri
nwhi
ch booksofaccount
sshal
lbe
mai
ntai
ned,andst
atementofaccount
sshal
lber
ender
edbyi
nsur
ersandot
her
i
nsur
eri
nter
medi
ari
es.
NATUREOFI
NSURANCE

I
nsur
ancemeanst
heactofsecur
ingt
hepay
mentofasum ofmoneyi
nthe
ev
entof l
ossordamaget
o pr
oper
ty,l
i
fe,aper
sonet
c.,byr
egul
arpay
mentof
pr
emi
ums.I
nsur
ancei
s amet
hodofspr
eadi
ngov
eral
argenumberofper
sons,a
possi
blef
inanci
alr
iskt
ooser
ioust
obeconv
eni
ent
lysust
ainedbyani
ndi
vi
dual
.
Theai
m ofal
lty
pesofi
nsur
ancesi
stopr
otectt
heownerf
rom av
ari
etyofr
isks
whi
chheant
ici
pat
es.Thehappeni
ngoft
hespeci
fi
edev
entmusti
nvol
vesomel
osst
o
t
hei
nsur
edoratl
eastshoul
dex
posehi
mtoadv
ersi
tywhi
chi
s,i
nthel
awofi
nsur
ance,
cal
l
edcommonl
ythe‘
ri
sk’
.
Thenat
ureofi
nsur
ancedependsont
henat
ureoft
her
iskr
equi
redt
o be
pr
otect
ed.Ani
nsur
ancecont
ractmakesav
ail
abl
ether
iskcov
eraget
othei
nsur
ed.The
buy
erofi
nsur
ancepay
saf
ixedpr
emi
um i
nexchangef
orapr
omi
seofcompensat
ion
i
ntheev
entof somespeci
fi
edl
oss.I
nsur
ancei
sboughtbecausei
tgi
vespeaceof
mi
ndt
othehol
der
s.Thi
scomf
ortst
agei
simpor
tanti
nper
sonal
andbusi
nessl
i
fe.
Thought
hemosti
mpor
tantpur
poseofi
nsur
ancei
stopr
ovi
der
iskcov
erage,
whent
hecont
ractper
iodext
endsov
eral
ongt
ime,asi
nthecaseofl
i
fei
nsur
ance,
pr
emi
um pay
ment
scompr
iseoft
wocomponent
s–onef
orbuy
ingr
iskcov
erageand
t
heot
her t
owar
dssav
ings. Thej
oini
ngt
oget
herofr
iskcov
erageandsav
ingsi
s
pecul
i
arwi
tht
hel
i
fei
nsur
anceandi
smor
ecommoni
ndev
elopi
ngcount
ri
esl
i
keI
ndi
a.
I
nthei
ndust
ri
all
ysuper
iorcount
ri
es,
theshor
tdur
ati
onl
i
fei
nsur
ancecont
ract
s
wi
thoutasav
ingscomponentar
eequal
l
y popul
ar.I
n t
hedev
elopi
ngeconomi
es
becauseoft
hesav
ingscomponentandt
hel
ongnat
ureoft
hecont
ract
,li
fei
nsur
ance
has become an i
mpor
tanti
nst
rumentofact
ivat
ing t
he l
ong-
funds.The sav
ings
componentput
sthe l
i
fei
nsur
ance i
n st
rai
ghtcompet
it
ion wi
th ot
herf
inanci
al
i
nst
it
uti
onsandsav
ingsi
nst
rument
s.
I
nmanydev
elopedcount
ri
es,
cit
izensar
etoacer
tai
next
entpr
otect
edbysoci
al
secur
it
yschemespr
ovi
dedbyt
hegov
ernment
.Theseschemesof
ferf
inanci
alai
dto
ci
ti
zenswhoar
eel
i
gibl
eongr
oundsofunempl
oyment
,ol
dage,
sickness,
disabi
l
ity
,et
c.
Thesoci
alsecur
it
yscenar
ioi
nIndi
aisqui
tedi
ff
erent
,hav
ingt
radi
ti
onal
l
ybeent
he
r
esponsi
bil
i
tyoft
hef
ami
l
yorcommuni
ty.Howev
er,
wit
hindust
ri
ali
zat
ion,
urbani
zat
ion,
br
eakupoft
hej
ointf
ami
l
ysy
stem andweakeni
ngoff
ami
l
ybondage,i
thasbecome
necessar
yto pr
ovi
de soci
alsecur
it
yar
rangement
sthatar
einst
it
uti
onal
i
zed and
r
egul
atedbyt
hest
ater
athert
hant
hesoci
ety
.
 Thei
ssuesr
elat
ingt
osoci
alsecur
it
yar
eli
stedi
nthe‘
Dir
ect
ivePr
inci
plesof
St
atePol
i
cy’
oft
heConst
it
uti
onofI
ndi
a.Whi
l
ethesubj
ectof‘
soci
alsecur
it
yinsur
ance’
,
‘
empl
oymentandunempl
oyment
’for
mIt
em 23oft
heConcur
rent Li
st, and t
he
subj
ect of‘
the wel
far
eofl
abouri
ncl
udi
ng condi
ti
onsofwor
k’,‘
prov
identf
und’
,
‘
empl
oyee’
sli
abi
l
ity
’,‘
wor
kmen’
scompensat
ion’
,‘i
nval
i
dit
yandol
dagepensi
on’and
‘
mat
erni
tybenef
it
s’f
ormI
tem 24,
alsooft
heConcur
rentLi
st.
Dur
ingt
hei
nit
ialy
ear
sofdev
elopmentandpl
anni
ng,i
twasbel
i
evedt
hatwi
th
t
hepr
ocessofdev
elopment
,agr
eat
ernumberofwor
ker
swoul
djoi
ntheor
gani
zed
sect
orandev
ent
ual
l
ygetcov
eredbyf
ormalsoci
alsecur
it
yar
rangement
s.Howev
er,
t
he act
ualexper
iencehaspr
ovedot
her
wise.Ther
eisnow al
mostast
agnat
ionof
empl
oymenti
ntheor
gani
zedsect
orwi
thi
ncr
easei
nthei
nfl
ow ofwor
ker
sint
othe
i
nfor
malsect
or.The unor
gani
zed wor
kfor
ce i
s char
act
eri
zed by scat
ter
ed and
f
ragment
edar
easofempl
oyment
,seasonal
i
ty,l
ackofj
obsecur
it
yandl
owl
egi
slat
ive
pr
otect
ion.Cur
rent
ly,outofanest
imat
edwor
kfor
ceofnear
ly400mi
l
li
on,onl
yless
t
han10per
centhav
ethebenef
it
soff
ormalsoci
alsecur
it
ypr
otect
ion.Al
thought
he
gov
ernmenthasaf
ew cent
ral
l
yfundedsoci
alassi
stancepr
ogr
ammesl
i
keNat
ional
Ol
d AgeSchemesand Nat
ionalFami
l
yBenef
itSchemes,t
he numberofpeopl
e
cov
eredaswel
last
hebenef
it
sisv
erymeagr
e.Fur
ther
mor
e,i
nacount
ry l
i
keI
ndi
a,
wher
ether
eisnopr
ovi
sionf
orunempl
oymentbenef
it
s,t
heconceptofi
nsur
ance
becomesext
remel
yimpor
tant
.

Legal
nat
ureofi
nsur
ancecont
ract
Theconceptofi
nsur
anceasanef
fect
ivemechani
sm f
orr
iskt
ransf
erencewas
f
ir
sti
ntr
oducedi
nthemar
inet
rade.Lat
eron,t
heut
il
it
yoft
heconceptwasr
eal
i
zed i
n
i
ts expansi
ont
othenon-
mar
inet
ypesl
i
kel
i
feandf
ir
einsur
ance.Al
mostunt
ilt
he
mi
ddl
e oft
he ni
net
eent
h cent
uryt
hese wer
ethe t
hree t
ypes whi
ch obt
ained
pr
omi
nencei
ninsur
ancel
aw. Theappl
i
cabi
l
ityoft
hepr
inci
pleofi
nsur
ancehasbeen
f
oundt
obewi
derandt
oday
,besi
dest
hev
ari
oust
ypesl
i
kemot
or,
acci
dentandf
idel
i
ty
i
nsur
ance,i
tsscopei
sext
endedt
ocr
opandcat
tl
einsur
ance.I
nsur
ancehasbecome
t
heusualmodeofensur
ing secur
it
yagai
nstf
utur
econt
ingenci
esand i
tpl
aysa
si
gni
fi
cantr
olei
nthesoci
alandcommer
cial
li
feofal
lmoder
ncommuni
ti
es.
Thel
aw ofi
nsur
ancef
ormspar
toft
hegener
all
aw ofcont
ractandwhat
ever
t
ypeofcont
ractofi
nsur
ancemaybe,i
tal
way
srepr
esent
stheagr
eementbet
weent
he
assur
edandt
hei
nsur
er.Theessent
ial
ingr
edi
ent
sofacont
ractunderl
aw,
forexampl
e,
of
ferandaccept
ance,
consi
der
ati
on,
capaci
tyoft
hepar
ti
es,
mut
ual
i
tyofunder
standi
ngandl
egal
i
tyofobj
ect
ar
eofequal
appl
i
cat
iont
oa
cont
ractofi
nsur
ance.Butt
her
eist
heexi
stenceofasepar
atesetofpr
inci
ples
di
sti
nct
lyappl
i
cabl
etoacont
ractofi
nsur
ancet
hatf
urni
shest
hecor
rectappr
aisalof
t
henat
ureofi
nsur
ancecont
ract
.

Basi
cpr
inci
plesofi
nsur
ance
Thoughi
nsur
ancehasbeendi
ff
erent
iat
edi
ntomar
ine,f
ir
e,l
i
feet
c.,t
her
ear
e
cer
tai
ngener
alpr
inci
plesappl
i
cabl
etoal
lfor
msofi
nsur
ance.Thesegener
alpr
inci
ples
ser
veasa gui
det
othesoundi
nter
pret
ati
onoft
hepur
poseoft
hei
nsur
ancecont
ract
s
i
nthei
rdi
ver
sif
iedf
orms.Thepr
inci
plesofi
ndemni
ty,
insur
abl
eint
erest
,uber
ri
maf
ides
(
utmostgood f
ait
h)and t
heex
ist
enceofr
iskar
esomeoft
hepr
inci
pleshav
ing
commonappl
i
cat
ion. Fol
l
owi
ngar
e t
hesomeoft
hei
mpor
tantpr
inci
plesof
i
nsur
ance:

(
a)Exi
stenceofr
isk:
I
tisv
italt
oev
erycont
ractofi
nsur
ance t
hat t
hesubj
ectmat
tershoul
dbe
exposedt
othecont
ingencyofl
ossorr
isk.Ri
ski
nvol
vest
hehappeni
ngofanuncer
tai
n
ev
entadv
erset
othei
nter
estoft
heassur
ed.I
nmar
inei
nsur
ancet
heshi
porcar
goi
s
exposedt
othel
ossby per
il
soft
hesea.I
nfi
rei
nsur
ancet
her
iski
sint
hedest
ruct
ion
ofpr
oper
tybyf
ir
e.I
nli
fei
nsur
ance,t
her
iski
sint
hedeat
hoft
heassur
ed,t
hougha
cer
tai
nty
,butuncer
tai
nast
othet
imeofi
tshappeni
ng.I
nanabst
ractsense,
riskmay
bedef
inedast
hechanceofl
oss.I
tcanei
therbeanuncer
tai
ntyast
otheout
comeof
someev
entorev
ent
s,orl
ossast
her
esul
tofatl
eastonepossi
bleout
come.I
nany
case,t
hepr
omi
seoft
hei
nsur
er i
sto sav
etheassur
ed agai
nstt
heuncer
tai
n
consequences.

(
b)Pr
inci
pleofi
ndemni
ty:
I
nsur
ancei
sessent
ial
l
yacont
ractofi
ndemni
ty.Al
lthecl
aimsoft
heassur
ed
wi
l
lbeadj
ust
edonl
ywi
thr
efer
encet
otheact
uall
osssust
ainedbyhi
m.Thus,i
tis
i
mpl
i
edi
nev
erycont
ractofi
nsur
ancet
hatt
heassur
edi
ncaseofal
ossagai
nstwhi
ch
t
hepol
i
cyhast
heact
uall
oss,i
stopr
eventf
raudont
hepar
toft
heassur
ed.I
tchecks
t
het
empt
ati
ont
ogai
nbyunf
airmeansandt
hewi
l
fulcausi
ngofl
oss.Howev
er,t
he
f
act
ualbasi
sfort
heappl
i
cat
ionoft
hepr
inci
pleofi
ndemni
tyi
snott
hepr
event
ionof
cr
imeorconsi
der
ati
onofpubl
i
cpol
i
cybuti
tder
ivesf
rom t
hei
nher
entnat
ureoft
he
bar
gai
n.
 I
nassessi
ngt
heamountpay
abl
eonacont
ractofi
nsur
ance,t
hepr
inci
pleof
i
ndemni
tyi
sagui
dingpr
inci
ple.I
tiscommont
hati
nsur
ersl
i
mitt
hei
rli
abi
l
ityt
oa
par
ti
cul
aramountofmoneyknownast
he‘
sum assur
ed.
’Incaseofl
oss,t
he‘
sum
assur
ed’i
sal
lthatt
heassur
edi
sent
it
ledt
oev
en i
fthev
alueoft
hepr
emi
um pai
dis
l
esst
hani
t.Buti
nal
lot
hercases,excepti
nthev
aluedpol
i
cies(
inMar
ineI
nsur
ance)
t
hei
nsur
eri
sli
abl
etoi
ndemni
fyonl
ytot
het
une oft
heact
uall
oss,ev
ent
hought
he
‘
sum assur
ed’
isahi
gheramount
.In‘
val
uedpol
i
cies,
’t
hepar
ti
esagr
eet
hatt
hev
alueof
t
hesubj
ect
-mat
tershal
lbeagr
eed.Theobj
ectoft
hev
aluedpol
i
ciesi
stoav
oiddi
sput
e
af
tert
hel
ossoccur
sast
othequant
um oft
heassur
ed’
sint
erest
.
I
ncont
ract
sofl
i
fei
nsur
ance,
per
sonalacci
dentandsi
cknessi
nsur
ancesandi
n
somef
ormsofemer
gencyi
nsur
ance,t
hel
ossi
sfr
equent
lymeasur
edi
nmonet
ary
t
erms.Theyar
etobedi
sti
ngui
shedf
rom cont
ract
sofi
ndemni
tyl
i
kemar
ineandf
ir
e
i
nsur
ance.I
tisnowwel
lest
abl
i
shedt
hatl
i
fei
nsur
ancei
nnowayr
esembl
esacont
ract
ofi
ndemni
ty.Notsel
dom t
he cont
ractofl
i
fei
nsur
ance i
s consi
der
ed as an
ar
rangementf
orpr
ofi
tabl
einv
est
ment
.Iti
sbecauset
heassur
ed bypay
ing t
he
pr
emi
ums i
ncr
easest
hehabi
tofsav
ing,t
hecumul
ati
ve sum whi
chhecanr
ecov
er
af
tert
heexpi
ryoft
hef
ixedper
iod.
Li
fei
nsur
ancemaypr
oper
lybeconsi
der
edasani
nvest
mentofmoneybecause
i
tenabl
es t
o secur
e an ul
ti
mat
efund t
othose per
sons who hav
e no gr
eat
er
oppor
tuni
ty ofmaki
ngsav
ingsorwhi
chl
eftt
othemsel
ves,t
heywoul
dhav
efound i
t
bey
ondt
hei
rmeans.Yet
,theobj
ect
iveofacont
ractof l
i
fei
nsur
ancei
smai
nlyt
o
pr
ovi
decompensat
ionf
ort
her
iskofdeat
hhappeni
ngatanuncer
tai
nti
me.Though,
it
i
sconsi
der
edasasor
tofi
nvest
ment
, i
thol
dsgoodi
nsomecases,i
tisdepar
ti
ng
f
rom t
heessent
ialf
eat
ureofi
nsur
ancesecur
it
yagai
nstr
isk.I
tis,t
her
efor
e,obser
ved
t
hatal
i
fepol
i
cyi
snotacont
ractofi
ndemni
ty.
Gener
all
y;acont
ractofi
ndemni
tyi
sent
eredi
nto f
ort
hesol
epur
poseof
maki
nggood al
ossi
ncur
red.Thev
alueofal
i
fe,howev
er,i
sincapabl
eofest
imat
ion
and ex
cept
,ina l
i
mit
edsense,cannotbe“
madegood”byi
nsur
ance.Thei
mpor
tant
di
sti
nct
ionwhi
cht
hus ar
isesbet
weenl
i
fei
nsur
anceandt
heot
herf
ormsofi
nsur
ance
i
sthatt
hepr
inci
pleof“
subr
ogat
ion,
”underwhi
cht
hei
nsur
er(
i.
e.,t
hecompany
)takes
t
her
ightofr
ecov
eryagai
nstt
het
hir
dpar
tycausi
ngt
hel
oss,hasnoappl
i
cat
iont
oli
fe
i
nsur
ance.

(
c)Di
ff
erencebet
weent
hecont
ractofi
nsur
anceandwageragr
eement
:
The basi
cpr
inci
ple ofi
ndemni
tyon whi
ch t
he gr
eat
erpar
toft
he l
aw of
i
nsur sbased,pr
ancei imaf
aci
e,negat
ivesanyt
reat
mentofi
nsur
anceonparwi
th
wager
ing cont
ract
s.The wager
ing cont
ract
s ar
ethose,wher
ein“
two per
sons,
pr
ofessi
ngt
ohol
dopposi
te v
iews t
ouchi
ngt
hei
ssueofaf
utur
euncer
tai
nev
ent
,
mut
ual
l
yagr
eet
hat
,dependentupont
he
det
ermi
nat
ionoft
hatev
ent
,oneshal
lwi
nfr
om t
heot
her
,andt
hatt
heot
hershal
lpay
and handov
ert
ohi
m,asum ofmoney
”.
Agai
n,t
hedi
ff
erencebet
weenawager
ingagr
eementandacont
ractdepends
uponwhet
hert
heper
sonmaki
ngi
thasorhasnotani
nter
esti
nthesubj
ectmat
terof
t
hecont
ract
.Thatmeans,
“ift
heev
enthappenst
hepar
tywi
l
lgai
nanadv
ant
age,
ifi
tis
f
rust
rat
edhewi
l
lsuf
feral
oss”
.Pr
obabl
y,t
hecommonf
eat
ureoft
het
wot
ypesof
agr
eement–t
heel
ementofuncer
tai
nty
,gav
eri
set
othemi
sconcept
ionofi
nsur
ancei
n
t
ermsofgambl
e.
Accor
dingt
oSi
rWi
l
li
am Anson,
theFat
heroft
he“
LawofCont
ract
”-
‘
I
nsur
ancewaspl
acedonadi
ff
erentgr
oundf
rom apur
ewagermer
elybecause i
tis
per
mit
tedbyl
aw.I
nsur
ancewasr
egar
dedasnobet
tert
hanawager
ingcont
ract
despi
tet
hepr
esenceofi
nsur
abl
eint
erest
.Butt
hisv
iewhasbeenmodi
fi
edbyhi
mlat
er
onandnowheaf
fi
rmsi
nsur
ancei
sdescr
ibedashav
ingonl
ya‘
super
fi
cialr
esembl
ance’
t
oawager
.Thought
hedi
sti
nct
ioni
ssubt
le,
iti
sthei
ntent
ionoft
hepar
ti
esr
athert
han
t
hef
orm oft
hecont
ractt
hatdi
sti
ngui
shesi
nsur
ancef
rom wager
’.
A wager
ing cont
racti
s made nor
mal
l
ywi
thav
iew t
o secur
e pr
ofi
t.The
pr
obabi
l
ityoft
hehappeni
ngofanev
enti
scompl
etel
yir
rel
evantt
othei
nter
est
soft
he
par
ti
esexceptf
ort
hechanceofgai
n.Awageri
sconcer
nedwi
tht
hehappeni
ngofan
entperseandt
ev heconsequent
ialdet
ermi
nat
ionoft
heconf
li
cti
ngi
nter
est
s. The
pur
posei
stowi
norl
ose i
nli
eu oft
hemer
epr
obabi
l
ityofanev
ent
.Ini
nsur
ance,t
he
i
nter
estoft
heassur
edi
nthesubj
ectmat
terofr
iskknownast
hei
nsur
abl
eint
erest
andi
soft
heut
mosti
mpor
tancei
nthei
nsur
ancecont
ract
.

Al
eat
orycont
ract
Cont
ractofi
nsur
ancei
sdescr
ibedasal
eat
orycont
ract
.Iti
sspecul
ati
vet
osuch
an ext
entt
hatt
hepar
ti
esmaynotknowwhet
hert
heev
enti
nsur
edagai
nstwi
l
loccur
ornot
,thusi
nvol
vi
ngacaseofmut
ualr
isk.Thei
nsur
eri
ntur
n,f
oracompar
ati
vel
y
smal
lsum i
nthe f
orm ofapr
emi
um under
takest
ocompensat
eagai
nstaheav
y
l
oss.Butsuchunder
taki
ngs wi
l
lnor
mal
l
ybewi
thr
efer
encet
oact
uar
ialpr
act
iceand
t
her
efor
einsur
anceal
way
sst
andsapar
tfr
om amer
especul
ati
vev
ent
ure.
Thei
nsur
ancecanonl
ybewi
thr
efer
encet
oapr
evi
ousl
yexi
sti
ngr
iskandunl
i
ke
awagerdoesnotcr
eat
eri
skwi
thi
tsi
ncept
ion.I
nthecaseofi
nsur
ance,t
hei
ndi
vi
dual
subj
ect
edt
other
iskbef
orenegot
iat
ions,obt
ainssecur
it
yandt
othatext
entt
her
ewi
l
l
beashi
ft
ingofr
iskr
athert
hancr
eat
ionofi
t.Ther
efor
e,i
tcanbesai
dthatt
he
i
nsur
anceaccompl
i
shest
her
ever
seofawager
ingcont
ract
.
 Atonet
imet
hel
i
fei
nsur
ancewasconsi
der
edt
obei
mmor
al,as“
gambl
i
ngi
n
humanl
i
fe”
.Thi
sideaar
osebecausepol
i
cieswer
etakenwher
enoi
nsur
abl
eint
erest
exi
stedand wher
ethei
nsur
ancewasaf
fect
edsol
elyf
orspecul
ati
vepur
poses.Li
fe
i
nsur
ance,howev
er,i
snow chi
efl
yusedandpr
oper
lyr
egar
dedasaneconomi
cand
soci
alnecessi
tyand when pr
oper
lyunder
stoodcannotbeconsi
der
edasa“
wager
”,
ev
ent
houghal
argef
inanci
algai
n mayr
esul
tfr
om t
heear
lydeat
hofani
nsur
ed.
Ont
heot
herhand,awager
ingcont
racti
sonewher
epr
ofi
tissoughtt
o be
madet
hroughchance,
whi
l
ethet
rueobj
ectofl
i
fei
nsur
ancei
srat
hert
heopposi
te,
the
av
oidanceofl
ossar
isi
ngt
hroughchance.Al
i
fei
nsur
ancepol
i
cyt
her
efor
eisnot a
wager
ing cont
ract
,whi
chwoul
dbeunenf
orceabl
eon gr
oundsofpubl
i
c pol
i
cy.The
l
i
fei
nsur
ancewasr
egar
dedi
sacont
ractofi
ndemni
tysi
mil
art
otheot
hercont
ract
sof
i
nsur
anceev
endur
ing1854.
Ther
efor
e,f
oll
owi
ngar
ethepoi
ntsofdi
ff
erencebet
weent
hel
i
fei
nsur
anceand
ot
herf
ormsofi
nsur
ance–
1.Mostoft
hecont
ract
sof i
nsur
ancear
efr
equent
lyannualcont
ract
sandt
he
i
nsur
ers hav
etheopt
iont
oref
user
enewalatt
heendofeachandanyper
iodof
i
nsur
ance.I
n some cases,t
he i
nsur
err
eser
ves t
he r
ightt
oter
minat
ethe
i
nsur
anceany
timeonapr
opor
ti
onat
eret
urnofpr
emi
um i
nrespectoft
he
unexpi
redper
iodoft
her
isk.Li
feassur
ancecont
ract
sar
e,i
nthemai
n,l
ong-
ter
m
cont
ract
sandi
ntheabsenceofanyf
aul
toranyf
lawt
hei
nsur
erhasnoopt
ion
t
ocancel
thei
nsur
ance.
2.Ther
iski
nsur
edagai
nstunderaf
ir
e,acci
dentormar
inei
nsur
ance cont
ract
mayor maynotoccurbutt
heev
enti
nsur
edagai
nstunderl
i
feassur
ance
cont
racti
sboundt
ohappen.
3.Thegener
alcont
ractofi
nsur
ancecont
inuest
obeacont
ractofi
ndemni
ty,but
l
i
fei
nsur
ancei
sconsi
der
edasanassur
ancecont
ract
.

(
d)Pr
inci
pleofI
nsur
abl
eInt
erest
:
Thet
estf
orav
ali
dinsur
ancecont
racti
stheexi
stenceoft
hei
nsur
abl
eint
erest
.
The‘
i
nsur
abl
eint
erest
’isnot
hingbutani
nter
estofsuchanat
uret
hatt
heoccur
rence
oft
heev
enti
nsur
edagai
nstwoul
dcausef
inanci
all
osst
othei
nsur
edandsuchan
i
nter
estwhi
chcanbeor i
spr
otect
edbyacont
ractofI
nsur
ance.Thi
sint
eresti
s
consi
der
edasaf
orm ofpr
oper
tyi
nthecont
empl
ati
onofl
aw.
Thei
nsur
abl
eint
erestshoul
dexi
statt
het
imeofhappeni
ngofanev
enti
nthe
gener
ali
nsur
ancecont
ract
s,buti
snotnecessar
il
ysoi
nthecaseoft
hel
i
fei
nsur
ance
cont
ract
s.Thi
sisbecauset
hef
ormeri
sacont
ractofi
ndemni
tyandt
hel
att
eri
sa
cont
ractofassur
ance.Taki
ng
anexampl
eoff
ir
einsur
ance,
iti
scl
eart
hatani
nsur
edper
sonsuf
fer
snol
ossundera
pol
i
cy,i
fatt
het
imeofl
ossordamaget
othepr
oper
ty;
hehasnoi
nter
esti
nitei
theras
f
ull
orpar
ti
alowner
.
Accor
dingt
oMcGi
ll
iv
ray
I
ftheassur
edhasnoi
nter
estatt
het
imet
heev
enthappensi
tiscl
eart
hathe
cannotr
ecov
erany
thi
ng,becausehesuf
fer
snol
oss,andt
her
efor
ehasnocl
aimt
oan
i
ndemni
ty.Si
mil
arl
y,i
fhehasani
nter
estwhi
chi
sli
mit
edt
osomet
hingl
esst
hant
he
f
ullv
alueoft
hesubj
ect
-mat
ter
,hesuf
fer
snogr
eat
erl
osst
hant
hev
alueofhi
sint
erest
att
het
imeoft
hel
oss,andt
her
efor
e,hi
scl
aimt
oani
ndemni
tycannotexceedt
he
v
alueofhi
sint
erest
.
I
nthi
scont
extofi
nsur
abl
eint
erest
,li
fei
nsur
ancest
ands on di
ff
erentgr
ound.
Nov
aluecanbeassi
gnedt
ohumanl
i
fei
nthesamewayasi
sdonei
nrespect of
t
angi
ble pr
oper
ty.Butal
lthesame,i
tispossi
blet
omeasur
etheext
entofl
osst
hat
woul
dbecausedbyt
hef
ail
ureofapar
ti
cul
arl
i
fe.Ani
nsur
abl
eint
erestofsomeki
ndi
s
necessar
yto ev
ery cont
ractofi
nsur
anceofwhat
everki
ndandanyi
nsur
ancemade
wi
thoutsuchi
nter
esti
sil
l
egalandv
oid.Thegui
dingf
act
ori
nthi
sregar
dist
hatan
i
nsur
abl
eint
eresti
sar
easonabl
eexpect
ati
onoff
inanci
albenef
itf
rom t
hecont
inued
l
i
feoft
hesubj
ectoranexpect
ati
onofl
oss i
fthesubj
ectdi
es.Fori
nst
ance,apar
ent
hasacl
eari
nsur
abl
eint
eresti
nthel
i
feofami
norchi
l
d,si
ncehei
sent
it
ledt
othe
ser
vicesandear
ningsoft
hatchi
l
d.Theconceptofi
nsur
abl
eint
erestpr
imar
il
yappear
s
t
obeani
nvent
ionoft
hecour
ts.I
tmaybenecessar
yfort
heassur
ed t
oshowi
nter
est
butcommonl
aw cont
ainsnogener
alpr
ohi
bit
ionofcont
ract
sinwhi
chnoi
nsur
abl
e
i
nter
estexi
sts.I
twasper
hapsi
ntr
oducedt
ocur
binsur
ancesbywayofwager
,and
obt
ainedst
atut
oryr
ecogni
ti
on.
Thepr
esenceofi
nsur
abl
eint
eresti
sinsi
stedf
ort
wor
easons:
-
(
1)Anassur
edcannotbet
akent
ohav
esuf
fer
edanydamage,i
fhehasnoi
nter
esti
n
t
hepr
oper
tyi
nsur
edatt
het
imeofl
oss.
(
2)Secondl
y,i
fthei
nter
estoft
heassur
edi
sli
mit
edt
osomet
hingl
esst
hant
hef
ull
v
alueof t
hesubj
ectmat
ter
,nogr
eat
erdamaget
hanhi
sint
eresti
nthesubj
ectmat
ter
wi
l
lresul
t.
I
nbot
hthecases,t
hei
nter
esti
nthesubj
ect
-mat
teri
srequi
redbyt
het
ermsof
t
hecont
racti
tsel
f,si
ncet
hepr
omi
seoft
hei
nsur
erwi
l
lbeonl
ytocompensat
ethe
act
uall
oss.Tohav
einsur
abl
eint
erest
,iti
sessent
ialt
hatt
her
eshoul
d besome
cont
ract
ualorpr
opr
iet
aryr
ight
,whet
herl
egalorequi
tabl
esol
ongasi
tisenf
orceabl
e
i
nthecour
ts.Accor
dingl
y,t
he mai
npr
inci
plesdet
ermi
ningt
heexi
stenceofi
nsur
abl
e
i
nter
estar
e(a)t
hei
nter
estmustbeenf
orceabl
eatl
aw(
b)t
hecont
inuedexi
stenceof
t
hei
nter
estwi
l
lbebenef
ici
alt
otheassur
ed.St
ri
ctl
egalorpecuni
aryi
nter
esti
snot
necessar
y.
 Undert
hecont
ractofl
i
fei
nsur
ance,t
heassur
edhasi
nsur
abl
eint
eresti
n hi
s
ownl
i
fet
oanunl
i
mit
edext
ent
.But
,wher
eaper
sont
akesi
nsur
anceont
hel
i
feof
anot
her
,thecr
it
eri
aappl
i
edi
nassessi
ngt
hei
nsur
abl
eint
eresti
sofgr
eati
mpor
tance.
I
tisnott
hel
egalorbenef
ici
ali
nter
est
,asi
nthecaseofmar
ineandf
ir
einsur
ance,
but
t
heper
soni
nsur
ingt
hel
i
fe oft
heot
hermustst
andi
nsuchr
elat
ionshi
paswi
l
ljust
if
y
ar
easonabl
eexpect
ati
onofadv
ant
ageorbenef
itf
rom t
hecont
inuanceoft
hel
i
feof
t
heper
sononwhom t
hei
nsur
ancei
saf
fect
ed.Thet
estappl
i
cabl
eiswhet
hert
her
e
wasact
ualdependenceoft
heper
sonaf
fect
ing t
hei
nsur
ance,
whosel
i
fei
sinsur
ed,
or
hehadanexpect
ancyofsomeadv
ant
agef
rom t
hecont
inuedexi
stenceoft
heper
son
i
nsur
ed.Theef
fectoft
her
equi
rementofi
nsur
abl
eint
erest i
nal
lcont
ract
sof
i
nsur
anceseemst
obet
wo-
fol
d.I
tsabsencemakesacont
ractofi
nsur
anceequi
val
ent
t
oawager
.Al
so,
thepr
inci
pleofi
ndemni
tycannotbeappl
i
ed unl
ess t
her
ebe some
i
nter
esti
nthesubj
ect
-mat
ter
,because,
theact
uall
ossal
onewi
l
lbei
ndemni
fi
ed.Thus,
i
tbecameapr
event
iveofwager
ingpol
i
ciesand al
sol
i
mit
edt
heamountr
ecov
erabl
e
t
othel
osssust
ainedbyt
heassur
ed.

(
e)Pr
inci
pleofut
mostgoodf
ait
h:
I
nthecaseofor
dinar
ycommer
cial
transact
ion,
thel
egal
maxi
m“Cav
eatEmpt
or”
(
lett
hepur
chaserbewar
e)pr
evai
l
s.I
ntheabsenceofanenqui
ryt
heot
herpar
tyt
othe
cont
racti
sundernoobl
i
gat
ionv
olunt
ari
l
ytof
urni
shdet
ail
edi
nfor
mat
ionr
egar
dingt
he
subj
ectmat
teroft
hecont
ract
.Iti
s,howev
er,
under
stoodt
hatonepar
tyt
othecont
ract
shoul
dnotbemi
sledbyt
heot
herbyanyf
alsedecl
arat
ion.Al
lthesame,i
tisopent
o
bot
hthepar
ti
est
othecont
ractt
osat
isf
ythem andeachpar
tyi
sent
it
ledt
omaket
he
bestbar
gai
nthathecanmake.
As a cont
rastt
o such commer
cialcont
ract
sthe i
nsur
ance cont
racti
s
domi
nat
edbyt
hel
egalmaxi
m“t
heut
mostgood f
ait
h”.Theobser
vanceoft
heut
most
goodf
ait
hbyt
hepar
ti
esi
svi
talt
oacont
ractofi
nsur
ance.I
nsur
ancei
sal
socal
l
edas
an uber
ri
ma f
ide cont
ractbecauset
hepar
ti
esar
erequi
redt
oconf
ir
mtoahi
gher
degr
eeofgoodf
ait
hthani
nthegener
all
awofcont
ract
.Goodf
ait
handhonest
ythough
pr
inci
plesofequi
tyand j
ust
icear
eequal
l
yappl
i
cabl
eto ev
eryagr
eement
,yeti
n
cont
ract
s ot
hert
hani
nsur
ance,t
hepar
ti
esar
efr
eet
o set
tl
ethei
rownt
erms.I
na
cont
ractofsal Cav
eofgoods,“ eatEmpt
or”i
sthepr
inci
pleand t
hesel
l
ersar
eunder
noobl
i
gat
iont
omakeknownt
othepur
chaseral
lthef
act
sthatmi
ght af
fecthi
s
deci
sion.Buti
ninsur
ancet
her
eissomet
hingmor
ethananobl
i
gat
iont
otr
eatt
he
i
nsur
erhonest
lyandf
rankl
y.Ani
nsur
ancebei
ngadev
iceofr
iskt
ransf
erencest
ands
onasepar
atebasi
s.Thenon-
discl
osur
eofamat
eri
alf
actbyt
heassur
edwhet
her
f
raudul
entori
nnocent
,hast
hesameef
fectofav
oidi
ngt
hecont
ract
.Ast
ri
ngentdut
yis
i
mposedont
he
assur
edt
opr
ovi
deal
lthemat
eri
alf
act
sthatmi
ghti
nfl
uencet
hedeci
sionoft
hei
nsur
er.
The f
actt
hatt
heassur
ed bel
i
evedasar
easonabl
emancer
tai
ninf
ormat
ionas
i
mmat
eri
alt
othepur
posedoesnotpr
ovi
deadef
ence.Themat
eri
ali
tyofapar
ti
cul
ar
f
actwi
l
lbeconsi
der
edi
ndependent
lyoft
hebel
i
efoft
heassur
ed.Thi
sfundament
al
pr
inci
ple appl
i
est
oal
lbr
anches ofi
nsur
ance.I
tmaybesummar
izedf
rom oneoft
he
sev
eralj
udgment
spr
onounced,i
tist
hedut
yoft
heassur
edt
odi
scl
oseal
lmat
eri
al
f
act
swi
thi
nthei
rknowl
edge.I
ncasesofl
i
fei
nsur
ance,cer
tai
nspeci
fi
cquest
ionsar
e
pr
oposed as t
he poi
nts af
fect
ing i
n gener
alt
o al
lmanki
nd.Butt
her
e may be
ci
rcumst
ancesal
soaf
fect
ingpar
ti
cul
ari
ndi
vi
dual
s,whi
char
enotl
i
kel
ytobeknownt
o
t
hei
nsur
er,andwhi
chhadt
heybeenknown,woul
dnodoubt
,hav
e beenmade
subj
ectt
ospeci
fi
cenqui
ri
es.
Theonusofgoodf
ait
hli
esequal
l
yonbot
hthepar
ti
est
othecont
ract
,buti
nthe
nat
ureoft
hingst
heassur
edhast
opaymor
epar
ti
cul
arat
tent
iont
otheobser
vanceof
t
hepr
inci
ples.Thesel
ect
ionofal
i
fef
ori
nsur
ancebyt
hecompanydependst
oal
arge
ext
entont
hei
nfor
mat
ionsuppl
i
edbyt
hepr
oposer
.Ast
hecompanysol
i
cit
spr
oposal
s
f
rom t
hegener
alpubl
i
cwhosemember
sar
etot
alst
ranger
stot
hecompany
,ther
eisan
ur
gentneed f
ordi
scl
osi
ngal
lmat
eri
alf
act
swi
thi
ntheknowl
edgeoft
hepr
oposert
o
enabl
ethecompanyt
ocomet
oadeci
sion.Thepr
oposerhaswi
thi
nhi
sknowl
edgeal
l
t
hef
act
s,whi
char
emat
eri
alt
other
isk.Thepr
oposeri
smor
all
yandl
egal
l
yboundt
o
di
scl
oseal
lmat
ter
s,whi
chi
npoi
ntoff
actar
emat
eri
alt
othecont
ract
.
Thequest
ionast
owhi
chi
nfor
mat
ioni
smat
eri
alt
othecont
racti
swi
deone.I
n
caseof adi
sput
e,acour
toracommi
tt
eeofar
bit
rat
orsmaydeci
dei
t.Butt
hiscannot
cer
tai
nlybel
eftt
otheopi
nionoft
hepr
oposer
.Ev
eryci
rcumst
ancei
smat
eri
alwhi
ch
woul
dinf
luencet
hej
udgmentofapr
udenti
nsur
eri
nfi
xi
ngt
hepr
emi
um ordet
ermi
ning
whet
herhe wi
l
ltake t
he r
isk.Thi
s def
ini
ti
on has been embodi
ed i
nthe Mar
ine
I
nsur
anceAct
,1906andi
sequal
l
yappl
i
cabl
etot
hel
i
fei
nsur
ance.Nev
ert
hel
ess,t
he
pr
oposeri
sexcusedf
rom expl
i
cit
lydi
scl
osi
ngcer
tai
nfact
s.Thesear
e:
(
1)Whatt
hei
nsur
eral
readyknows?
(
2)Whatt
hei
nsur
eroughtt
oknow?
(
3)Whatt
hei
nsur
erwai
vesbei
ngi
nfor
medof
?and
(
4)Feat
ures,
whi
chl
essent
her
isk?
Thus,i
nani
nsur
ancecont
racteachpar
tyact
sont
hegoodf
ait
hoft
heot
her
.If
t
he pr
oposerconceal
s ormi
srepr
esent
s mat
eri
alf
act
s,t
he cont
racti
svi
ti
ated.
Del
i
ber
ateconceal
mentormi
srepr
esent
ati
on amount
stof
raud,and t
hepol
i
cyi
s
l
egal
l
yvoi
d.The i
nnocentmi
sst
atementormi
srepr
esent
ati
on r
ender
sthepol
i
cy
v
oidabl
eatt
heopt
ionoft
he
i
nsur
erupt
otwoy
ear
s.I
npr
act
ice,howev
er,pol
i
ciesar
eusual
l
yal
l
owedt
ocont
inue,
subj
ectt
oadj
ust
ment
,ift
hecompanyi
ssat
isf
iedt
hatt
her
ewasnoi
ntent
ionont
he
par
toft
heassur
edt
odef
raudi
t.Asst
atedbef
ore,f
ulldi
scl
osur
eoft
hemat
eri
al
i
nfor
mat
ionhav
ingabear
ingont
her
iski
snecessar
yont
hepar
toft
hepr
oposer
.Thi
s
i
sduet
othepr
inci
pleofuber
ri
maf
idest
hatgov
ernst
hei
nsur
ancebusi
ness.The
st
atement
smadebyt
hepr
oposeri
nthepr
oposalandhi
sst
atementbef
oreamedi
cal
exami
neri
s,i
nlegal
language,
eit
herr
epr
esent
ati
onsorwar
rant
ies.
Awar
rant
yini
nsur
ancei
sast
atementorcondi
ti
oni
ncor
por
atedi
nthecont
ract
r
elat
ingt
other
isk,whi
cht
heappl
i
cantpr
esent
sast
rueanduponwhi
ch i
tis
pr
esumedt
hat t
hei
nsur
err
eli
edi
nissui
ngt
hecont
ract
.Mar
inei
nsur
ance,t
hef
ir
st
br
anchofi
nsur
ancet
odev
elopcommer
cial
l
y,ev
olv
edt
hedoct
ri
neofwar
rant
y.The
Mar
ineI
nsur
anceAct
,1906(
Engl
and)
,gi
vest
hef
oll
owi
ngdef
ini
ti
onofawar
rant
y
‘
Awar
rant
yisast
atementbywhi
cht
heassur
edunder
takest
hatsomepar
ti
cul
art
hing
shal
l orshal
lnotbedone,ort
hatsomecondi
ti
onshal
lbef
ulf
il
led,orwher
ebyhe
af
fi
rmsornegat
ivest
heexi
stenceofapar
ti
cul
arst
ateoff
act
.Thi
sActst
atesf
urt
her
t
hatawar
rant
yasabov
edef
inedi
sacondi
ti
onwhi
ch mustbeexact
lycompl
i
edwi
th,
whet
heri
tbemat
eri
alt
other
iskornot
’.
Theot
herr
epl
i
esgi
venbyt
hepr
oposer
,whi
char
enoti
ntendedt
ohav
ethef
orce
ofwar
rant
y,ar
eknownasr
epr
esent
ati
ons.I
nli
fei
nsur
ance,
ther
eisar
eci
talcl
auseby
whi
ch t
heanswer
sgi
ven i
nthepr
oposalandt
her
epl
i
esmadet
othemedi
cal
exami
nerar
emadeas t
hebasi
soft
hecont
ractandt
her
ebygi
vent
heef
fectof
war
rant
y.Thepr
esentt
endencyoft
heof
fi
cesi
stot
reatt
her
epl
i
esasr
epr
esent
ati
on.
Anymi
sst
atement
sar
e,t
her
efor
e,j
udgedf
rom t
hisappr
oachandi
fthecompany
t
hinkst
hatt
he mi
sst
atementi
s mat
eri
al,t
hati
s,t
he knowl
edge oft
he cor
rect
st
atementwoul
dhav
einf
luencedt
hedeci
sionoft
hecompanyadv
ersel
y;t
hei
nsur
er
canseekt
oav
oidt
hepol
i
cyont
hegr
oundofnon-
discl
osur
eormi
sst
atementand
mustal
soof
fert
oret
urnt
hepr
emi
ums.Thecour
tsal
sodonotf
avouranyunf
air
r
igi
dit
yint
hei
nter
pret
ati
onof answer
stot
hequest
ionsi
nthepr
oposalf
orm.Ev
en
t
heni
tisal
way
sdesi
rabl
eont
hepar
toft
hepr
oposert
owar
rantt
heanswer
stot
he
bestofhi
sknowl
edgeandbel
i
ef.Thi
smat
eri
all
ysaf
eguar
dshi
sint
erest
s.

FUNCTI
ONSOFI
NSURANCE:
Thev
ari
ousf
unct
ionsofi
nsur
ancel
i
ker
iskshar
ing,
li
fei
nsur
anceandannui
ti
es
r
eli
eff
ormember
sofsoci
ety
,shar
ingbur
denofst
atet
opr
ovi
der
eli
eft
odest
it
uteand
aged ci
ti
zens,maki
ngav
ail
abl
efi
nancef
orsoci
ali
nvest
mentet
c.Thef
undament
al
f
unct
ionof
i
nsur
ancei
stoshi
ftt
hel
osssuf
fer
edbyasol
eindi
vi
dualt
o a wi
l
li
ng and capabl
e
pr
ofessi
onalr
isk-
bear
eri
nconsi
der
ati
onofacompar
ati
vel
ysmal
lcont
ri
but
ion cal
l
ed
pr
emi
um.I
nthi
spr
ocess t
hepr
ofessi
onalr
isk- eri
bear .e.t
hei
nsur
ercol
l
ect
ssome
smal
lrat
e ofcont
ri
but
ion f
rom a l
argenumberofpeopl
e and i
fther
eisany
unf
ort
unat
eper
sonamongt
hem,t
her
isk- eri
bear .e.t
hei
nsur
err
eli
evest
hesuf
fer
er
f
rom t
heef
fect
soft
hel
ossbypay
ingt
hei
nsur
ancemoney
.Thus,
itser
vest
hesoci
al
pur
poseandi
tis“
asoci
aldev
icewher
ebyuncer
tai
nri
sksofi
ndi
vi
dual
smaybe
combi
nedi
nagr
oupandt
hus,mademor
ecer
tai
n;smal
lper
iodi
c cont
ri
but
ionoft
he
i
ndi
vi
dual
spr
ovi
dingaf
undoutofwhi
cht
hosewhosuf
ferl
ossesmayber
eimbur
sed”
.
Thei
nsur
erscol
l
ectt
hecont
ri
but
ionsofnumer
ouspol
i
cyhol
der
sandt
hosef
undsar
e
i
nvest
ed i
nor
gani
zedcommer
ce and i
ndust
ry. They hel
pther
unni
ng ofgi
ant
i
ndust
ri
esandmobi
l
izet
hecapi
tal
for
mat
ion.
I
nsi
mpl
eter
ms,
“insur
ancei
sapr
otect
ionagai
nstf
inanci
all
osst
aki
ngpl
aceon
t
hehappeni
ngofanunexpect
edev
ent
”.Al
lthei
ndi
vi
dual
shav
e asset
stangi
blei
.e.
t
hehouse,car
,fact
oryet
c.ori
ntangi
blel
i
kev
oiceofasi
nger
,legofaf
oot
bal
l
er,t
he
handofanaut
horet
c.Al
lthesecanbei
nsur
edbecauset
heyr
unt
her
iskofbecomi
ng
non-
funct
ional
eit
hert
hroughadi
sast
eroranacci
dent
.

Thef
unct
ionsofI
nsur
ancecanbebi
fur
cat
edasbel
ow:
1.
Pri
mar
yFunct
ions,
2.
Secondar
yFunct
ionsand
3.
OtherFunct
ions

Thepr
imar
yfunct
ionsofi
nsur
ancei
ncl
ude–
(
a)Pr
ovi
depr
otect
ion-Thepr
imar
yfunct
ionofi
nsur
ancei
s t
oof
ferpr
otect
ion
agai
nst f
utur
eri
sk,acci
dent
sanduncer
tai
nty
.Insur
ancei
sact
ual
l
yashi
eldagai
nst
economi
closs,
byshar
ingt
her
iskwi
thot
her
s.
(
b)Col
lect
iver
isk-I
nsur
ancei
sadev
icet
ocont
ri
but
etot
hef
inanci
all
ossofaf
ew
amongmany
.Insur
ancei
sameanbywhi
chl
i
ttl
elossesar
eshar
edamongl
arger
numberofpeopl
e.Al
lthei
nsur
edshar
ethepr
emi
umst
owar
dsaf
undandoutof
whi
cht
heper
sonsexposedt
oapar
ti
cul
arr
iski
spai
d.
(
c)Ev
aluat
ionofr
isk-I
nsur
anceconcl
udest
hepr
obabl
evol
umeofr
iskbyev
aluat
ing
v
ari
ousf
act
orst
hatgi
ver
iset
ori
sk.Ri
ski
stheor
igi
nfordet
ermi
ningt
hepr
emi
um r
ate
al
so.
(
d)Pr
ovi
deassur
ance-I
nsur
ancei
sadev
ice,
whi
chhel
pst
omodi
fyf
rom uncer
tai
nty
t
ocer
tai
nty
.Insur
ancei
samechani
sm wher
ebyuncer
tai
nri
sksmaybemademor
e
cer
tai
n.
 Thesecondar
yfunct
ionsofi
nsur
ancei
ncl
ude:
-
i
.Av
oidanceofl
osses-I
nsur
anceal
armsi
ndi
vi
dual
sandbusi
nessment
o adopt
sui
tabl
e dev
icet
o pr
eventunf
ort
unat
e consequencesofr
iskbyobser
ving saf
ety
i
nst
ruct
ions;i
nst
all
ati
onofaut
omat
icspar
kleroral
arm sy
stems,et
c.pr
event
ionof
l
ossescausessmal
l
erpay
mentt
otheassur
edbyt
hei
nsur
erandt
hiswi
l
lencour
age
f
ormor
esav
ingsbywayofpr
emi
um.Thecondensedr
ate ofpr
emi
umsmot
ivat
efor
mor
ebusi
nessandbet
terpr
otect
iont
othei
nsur
ed.
i
i
.Smal
lcapi
talt
o cov
erl
argerr
isks-I
nsur
ancer
eli
evest
hebusi
nessmenf
rom
secur
it
yinv
est
ment
s,bypay
ingsmal
lamountofpr
emi
um agai
nstsuper
iorr
isksand
uncer
tai
nty
.
i
i
i.Encour
aget
owar
dst
hedev
elopmentofl
argeri
ndust
ri
es-I
nsur
ancepr
ovi
des
dev
elopmentoppor
tuni
tyt
othosel
argeri
ndust
ri
eshav
ingaddi
ti
onalr
isksi
nthei
r
set
ti
ngup.Ev
ent
hef
inanci
ali
nst
it
uti
onsmaybepr
epar
edt
ogi
vecr
edi
ttoai
l
ing
i
ndust
ri
aluni
tswhi
chhav
einsur
edt
hei
rasset
sincl
udi
ngpl
antandmachi
ner
y.

Theot
herf
unct
ionsofi
nsur
ancei
ncl
ude:
-
1.
Wayofsav
ingsand i
nvest
ment-I
nsur
anceser
vesassav
ingsandi
nvest
ment
,
i
nsur
ancei
s acompul
sor
ywayofsav
ingsandi
tli
mit
stheunnecessar
yexpensesby
t
hei
nsur
ed.Fort
her
easonofav
ail
i
ngi
ncome-
taxexempt
ionsal
sopeopl
einv
esti
n
i
nsur
ance.
2.
Sour
ceofear
ning f
orei
gn exchange-I
nsur
ancei
sawor
ldwi
debusi
ness.The
count
rycanear
nfor
eignexchangebywayofi
ssueofmar
inei
nsur
ancepol
i
ciesand
v
ari
ousot
herway
s.
3.Ri
sk-
Freet
rade-I
nsur
ancepr
omot
esexpor
tsi
nsur
ance,whi
chmakest
hef
orei
gn
t
rader
isk-
fr
eewi
tht
heassi
stanceofdi
ff
erentt
ypesofpol
i
ciesundermar
inei
nsur
ance
cov
er.

TYPESOFI
NSURANCE:
AsI
nsur
ancehasbecomeoneoft
hemostsoci
all
ydesi
rabl
eandcommer
cial
l
y
accept
abl
eter
ti
aryi
ndust
ri
esi
nthewor
ld,t
het
ypesofi
nsur
ancear
ewi
de,bot
hin
pr
ivat
eandpubl
i
c.Thecov
erofi
nsur
ancewhi
chv
ari
esf
rom cor
pusandpr
oper
ti
es,
l
i
vingand non-l
i
vings,chat
tel
sandal
lbel
ongi
ngs,mov
abl
eandi
mmov
abl
eext
endi
ng
t
oev
env
ari
ousl
i
mbsoft
hebody
.Itcanbebr
oadl
ydi
vi
dedi
ntoThr
eet
ypesv
iz.
,
(
a)Li
fei
nsur
ance;
(
b)Gener
ali
nsur
ance;
and
(
c)Re-
insur
ance.
Pr
ospect
sofi
nsur
ancebusi
ness:
Thei
nsur
ancesect
orhasa hugepot
ent
ialnotonl
ybecausei
ncomesar
e
i
ncr
easi
ngandasset
sar
eexpandi
ngbutal
sobecauset
hei
ncr
easi
ngi
nst
abi
l
ityi
nthe
sy
stem.I
nasense,
wear
eli
vi
ngi
nanext
rar
iskywor
ld.Tr
adei
sbecomi
ngmor
eand
mor
egl
obal
.Technol
ogi
es ar
echangi
ngandget
ti
ngr
epl
acedataf
ast
err
ate.I
nthi
s
mor
euncer
tai
nwor
ld,f
orwhi
chenoughev
idencei
sav
ail
abl
eint
her
ecentper
iod,
i
nsur
ance hav
e an i
mper
ati
ver
olet
o pl
ayi
nreduci
ng t
he r
isk bur
den t
hatt
he
i
ndi
vi
dual
sandbusi
nesseshav
etobear
.Theappr
oacht
oinsur
anceshoul
dbei
ntune
wi
tht
hechangi
ngt
imes.
Theai
m oft
hei
nsur
ancesect
ori
nIndi
aist
oext
endt
hei
nsur
ancecov
erage
ov
era l
argersect
ionoft
hepopul
ati
onandawi
dersegmentofact
ivi
ti
es.The t
hree
gui
ding pr
inci
plesoft
hei
ndust
rymustbet
ochar
gepr
emi
um nothi
ghert
hanwhati
s
accept
abl
e by st
ri
ctact
uar
ialconsi
der
ati
ons,t
oinv
estt
he f
unds f
orobt
aini
ng
maxi
mum y
iel
dfort
hepol
i
cyhol
der
sconsi
stentwi
tht
hesaf
etyofcapi
tal
andt
orender
ef
fi
cientand pr
omptser
vicet
o pol
i
cyhol
der
s.Wi
thacr
eat
ivecor
por
atepl
anni
ngand
anabi
dingcommi
tmentt
oimpr
ovedser
vice,t
hemi
ssi
onofwi
deni
ngt
henet
wor
kof
i
nsur
ancecanbeachi
eved.
Ther
eisapr
obabi
l
ityofashooti
nempl
oymentoppor
tuni
ti
es.Anumberofweb-
si
tesar
ecomi
nguponi
nsur
ance,af
ew f
inanci
almagazi
nesexcl
usi
vel
ydev
otedt
o
i
nsur
anceandal
soaf
ewt
rai
ningi
nst
it
utesar
ebei
ngsetup.Manyoft
heuni
ver
sit
ies
andmanagementi
nst
it
uteshav
eal
readyst
art
edorar
econt
empl
ati
ngnewcour
sesi
n
i
nsur
ance.Li
fei
nsur
ance hast
odaybecomeamai
nst
ream ofanymar
keteconomy
si
ncei
tof
fer
spl
ent
yofscopef
orcol
l
ect
ingl
argesumsofmoneyf
orl
ongper
iodsof
t
ime.Awel
l
-regul
atedl
i
fei
nsur
ancei
ndust
rywhi
chmov
eswi
tht
het
imesbyof
fer
ing
i
tscust
omer
sspeci
all
ymadepr
oduct
stosat
isf
ythei
rfi
nanci
alneedsi
s,t
her
efor
e,
essent
ialt
opr
ogr
esst
owar
dsanunst
ressedf
utur
e.Thus,onecanunder
standt
he
t
erm‘
i
nsur
ance’bet
terf
rom i
tsl
egalnat
ure,pr
inci
plesandf
unct
ionsasdi
scussed
abov
eandi
sthebasef
oral
lthet
ypesofi
nsur
ances.
 Li
fei
nsur
ance

Li
fei
nsur
ance i
s a cont
ractwi
th bet
ween an i
ndi
vi
dualand an i
nsur
ance
company
,inwhi
cht
hei
nsur
ancecompanypr
ovi
desf
inanci
alsecur
it
yinr
etur
nfor
r
egul
ar pay
ment
s(knownaspr
emi
ums)t
othei
nsur
ancecompany
.Incaseoft
he
pol
i
cyhol
der
’sdeat
hori
fthepol
i
cymat
ures,t
hei
nsur
ancecompanyshal
lpaya
l
umpsum t
othei
ndi
vi
dualaf
teraper
iodoft
imeort
othei
rfami
l
y,onbasi
soft
he
cont
ract
.Ty
pical
l
y,t
hist
ypeofpol
i
cyi
schosenbasedony
ourneedsandgoal
s.
Benef
it
sofLi
fei
nsur
ance
I
nsur
ance can pr
ove adv
ant
ageous i
n meet
ing sev
eralf
inanci
algoal
s oft
he
i
ndi
vi
dual
andhi
sfami
l
y.Her
ear
esomeoft
hei
mpor
tantones:
1.Fi
nanci
alcov
eragai
nstl
ossofl
i
fe,whi
chmakessur
eyourf
ami
l
ycansuppor
t
i
tsel
finy
ourabsence
2.Chi
l
d’seducat
ion
3.Chi
l
d’smar
ri
age
4.Buy
ingahouse
5.Pensi
onorr
egul
ari
ncomepost
-r
eti
rement
6.Post
-r
eti
rementi
ncomef
orNRI
s

Thesear
ejustsomeoff
inanci
algoal
syoucan achi
evewi
tht
hehel
pofl
i
fe
i
nsur
ance.Mor
eimpor
tant
ly,
li
fei
nsur
ancepl
ansar
efl
exi
ble.Thi
smeansal
thoughy
ou
won’
tfi
ndani
nsur
ancepl
andedi
cat
edt
obuy
ingahouse,y
oucanbuyanendowment
pl
an(
tradi
ti
onal
ormar
ket
-l
inked)wi
tht
heai
m ofpay
ingf
orahouseataf
utur
edat
e.
Nat
ureandscopeofLi
feI
nsur
ance
Ther
eisnost
atut
orydef
ini
ti
onofl
i
fei
nsur
ance.Howev
er,i
tisdef
inedasa
‘
Cont
racti
nwhi
cht
hei
nsur
er,i
n consi
der
ati
onofacer
tai
npr
emi
um,ei
theri
nal
ump
sum ori
nanyot
herper
iodi
calpay
ment
s,i
nret
urnagr
eest
opayt
otheassur
ed,ort
o
t
heper
sonf
orwhosebenef
itt
hepol
i
cyi
staken,ast
atedsum ofmoneyont
he
happeni
ngofapar
ti
cul
arev
entcont
ingentondur
ati
onofhumanl
i
fe’
I
nDal
byv
.TheI
ndi
an& LondonAssur
anceCo t
heessent
ialf
eat
uresLi
fe
I
nsur
ancehav
ebeenst
ressedupon.Accor
dingl
y,i
tis
 I
tisacont
ractr
elat
ingt
ohumanl
i
fe
  Ther
eneednotbeanexpr
esspr
ovi
siont
hatt
hepay
menti
sdueont
hedeat
hof
t
heper
son
 Thecont
ractpr
ovi
desf
orpay
mentofl
umpsum money
 Theamounti
spai
datt
heexpi
rat
ionofacer
tai
nper
iodoront
hedeat
hoft
heper
son

Obj
ect
ivesoradv
ant
agesofl
if
einsur
ance
Li
feI
nsur
ancehasbot
hShor
t-
Range&Long-
Rangeadv
ant
ages.I
nshor
trange
i
tbenef
it
sthei
nsur
edpr
imar
il
yasi
t
 Encour
agest
hri
fti
.e.t
hehabi
tofsav
ing
 For
mscapi
tal
-bysav
ingmoneyi
tbecomesacapi
tal
forf
utur
einv
est
ment
 Rel
i
evesofwor
ri
esasi
nsur
edwi
l
lhav
esuf
fi
cientmoneywi
thhi
m
 Medi
cal
exami
nat
ioni
sdonewhi
l
etaki
ngpol
i
cy
 Lookaf
terf
ami
l
ymember
s-dur
ingol
dagef
ami
l
ymember
scanbel
ooked
af
terast
heassur
edwi
l
lhav
esuf
fi
cientsav
ings
 Al
sor
aisel
oan–basedont
heamountdeposi
tedwi
thi
nsur
ert
hrough
pr
emi
um Asal
ong-
rangeadv
ant
agei
tleadst
o
 Pr
omot
ionofi
ndust
ry–ast
hehugeamountcol
l
ect
edbyi
nsur
ancecompani
es
wi
l
lbeusedt
opr
omot
eindust
ri
esbygov
ernment
 Leadst
ocount
ry’
seconomy
-wheni
ndust
rypr
osper
sitaut
omat
ical
l
yleadst
o
t
hedev
elopmentoft
hecount
ry’
seconomy

Di
ff
erenceb/
wLi
feI
ns&ot
herI
nsur
ances
Pr
imar
ydi
sti
nct
ionbet
weent
het
woi
sthesubj
ect
-mat
terofi
nsur
ance.I
ncase
ofLi
feI
nsur
ance,
thesubj
ectmat
teri
sthehumanl
i
fewhi
chhasnoeconomi
cval
ue.I
t
i
sonl
yaj
uri
dicalv
aluat
ion&hencei
tisi
nval
uabl
eint
ermsofmoney
.Fur
ther
,the
ev
enti
nsur
edi
sthel
i
feordeat
hwhi
chi
scer
tai
n.
I
nFi
re&Mar
inei
nsur
ancest
hesubj
ect
-mat
terhasaneconomi
cval
ue.The
ev
enti
nsur
edagai
nstmaynothappenatal
l
.
I
nli
fei
nsur
anceashel
dbyLor
dMansf
iel
dinGodsal
lvs.Bol
dcr
othat‘
Li
feI
ns
i
s al
socont
ractofi
ndemni
ty’
.Lat
eri
nDal
byVsTheI
ndi
an&LondonAssur
anceCo,
it
wascr
it
ici
sedandhel
dthati
tisnotacont
ractofi
ndemni
tyi
nthest
ri
ctsense.As
humanl
i
fe cannotbeest
imat
ed.I
tisi
ncapabl
eofexactest
imat
ion(
i.
e.l
ossbydeat
h).
 Aper
sont
akespol
i
cyf
orav
aluet
hati
sasperhi
scapaci
tyt
opaypr
emi
um.I
tis
acont
ractwi
thr
efer
encet
oone’
sownl
i
fehencenotani
ndemni
tycont
ract
.But i
f
pol
i
cyi
stakenonot
her
’sl
i
fei
tbecomesani
ndemni
tycont
ract
.Fore.
g.cr
edi
torcan
t
akepol
i
cyont
hel
i
feofdebt
orf
orr
ecov
eryofhi
sloanamount
.
I
ncaseofl
i
fei
nsur
ance,t
hesum assur
edbecomespay
abl
einf
ullwi
thout
pr
oofofl
oss.I
tisnotst
ri
ctl
yani
ndemni
tycont
ract
.Theev
enti
nsur
edi
sthedeat
h,
whi
chi
scer
tai
n andboundt
ohappensoonerorl
ater
,butt
her
eisanuncer
tai
ntyas
r
egar
dst
imeofi
t’
shappeni
ng.
I
nsur
abl
eInt
eresti
srequi
redonl
yatt
het
imeofcommencementoft
hecont
ract
,
ast
hel
i
feofper
soni
sincapabl
eofv
aluat
ioni
nter
msofmoney
.Ther
eisnoquest
ion
ofov
erv
aluat
ion.I
trangest
owhol
eli
feofassur
edasi
tisal
ong-
ter
m cont
ract
.
Pr
emi
um maybepai
datr
egul
ari
nter
val
sasagr
eedbyt
hepar
ti
es.
Amountofdamagedependsonact
ual
losssuf
fer
edbyt
heassur
ed.I
ncaseofa
st
ri
ctcont
ractofi
ndemni
tyhecannotr
ecov
ermor
ethant
heact
ual
loss.Buther
esi
nce
t
hel
i
fe cannotbev
alued,i
tisnotacont
ractofi
ndemni
tyi
nthest
ri
ctsense.Fur
ther
t
heev
enti
nsur
edmaynothappenatal
li
not
herki
ndsofi
nsur
ances.
I
nsur
abl
eint
eresti
ncaseofFi
re&Mar
inei
nsur
ancesshoul
dbet
her
eev
en
dur
ing l
oss,asi
tiscapabl
eofv
aluat
ion.I
ncaseofgr
ossov
erv
aluat
iont
hepol
i
cy
becomesv
oidasi
twoul
dbecomeawager
ingagr
eement
.
I
nsur
ancesot
hert
hanl
i
fewoul
dbef
orashor
tter
m,usual
l
yforany
earor
coupl
eofy
ear
sandt
hesamecanber
enewedj
ustl
i
kear
ail
wayt
icketwhi
chcoul
dbe
ext
endedorr
enewedbypay
mentofext
rapr
emi
um.

Ev
enti
nsur
edagai
nsti
nLi
fei
nsur
ance
Theev
entwhi
chi
sinsur
edi
ncaseofl
i
fei
nsur
ancei
sthe‘
Deat
h’.Deat
hmaybedue
t
o
 Nat
ural
reasons;
 Di
sease;
 Acci
dent
;or
 Cr
imi
nal
actofI
IIpar
ty
Techni
cal
l
yift
hepr
ovi
sionsofsec10ofI
ndi
anCont
ractActar
ecompl
i
edi
twoul
dbea
goodcont
ractandhencebecomesenf
orceabl
e.Buti
fdeat
hoccur
sbywi
l
lful
misconductf
or
e.
g.af
tert
hecommencementofi
nsur
ancei
ftheassur
edi
ski
l
led,
itmaybeav
oided.
 I
n Li
ber
tyNat
ionalLi
feI
nsur
anceCov
s.Wel
don,anur
set
ookl
i
fepol
i
cyonher
ni
ece(
of2y
rsol
d).Sheadmi
nist
eredar
seni
cint
hedr
inkt
obegi
vent
othechi
l
d.Chi
l
d
di
ed,whenshecl
aimedcompensat
iont
hecour
thasi
mposeddamagesoni
nsur
ance
cof
ori
ssui
ngpol
i
cywi
thouti
nsur
abl
eint
erest
.
I
tisbasedonapr
inci
plet
hat‘
Nomanshal
lbeal
l
owedt
otakeadv
ant
ageofhi
s
ownwr
ong’
.Incaseofwi
l
fulandwr
ongf
ulact
sofassur
ed‘
I
mpl
i
edTer
m Theor
y’i
s
appl
i
edandconsequent
lyt
hei
nsur
ancecompanyi
sabsol
vedf
rom t
hel
i
abi
l
ity
.
I
fthedeat
htookpl
acebysui
cide,i
ti edasFel
scal
l odese–(
fel
onofhi
msel
f)
.
Al
ldeat
hsexceptby(
i)Vi
olat
ionofacr
imi
nall
awbyassur
edhi
msel
fand(
ii
)Sui
cide
woul
dbecov
eredbyt
hepol
i
cy.Fur
therFel
odese,whensaneori
nsanemaybe
consi
der
edbyt
he cour
t.Hence,
li
fepol
i
ciesont
hisgr
oundar
ecl
assi
fi
edi
nto2t
ypes
v
iz.
,ift
hedeat
hisanact ofsel
f-
dest
ruct
ion;andi
fiti
sduet
osui
cidecommi
tt
ed
wi
thi
n2 y
earf
rom t
hecommencementoft
hepol
i
cyt
her
ewoul
dbeexempt
ionf
rom
l
i
abi
l
ity
.
Bor
radai
l
evs.Hunt
eri
twashel
dt I
fassur
hat‘ edshoul
ddi
ebyhi
sorherown
handsorbyhandsofj
ust
iceori
nconsequenceofduel
,thepol
i
cyshoul
dvoi
d’.I
faman
i
sthr
ownhi
msel
fint
oar
iverandconsequent
lyi
sdr
ownedi
twashel
dtobeanactof
sel
f-
dest
ruct
ion.

Ci
rcumst
ancesaf
fect
ingt
heRi
sk
Thedi
ff
erentci
rcumst
anceswhi
chwoul
daf
fectt
her
iski
nvol
vedi
nli
fe
i
nsur
ancewoul
dbe:
 Age
 Fami l
yhistor
y
 Personalheath
 Mor alhi
story–Habitsofl
i
fe,
past&pr
esent
 Occupation
 Geographicalposi
ti
on

Amount
sRecov
erabl
eunder
Upont
hedeat
horef
fl
uxoft
imet
heamountunderl
i
fei
nsur
ancemaybe
r
ecov
ered.Thi
samounti
ncl
udest
heamounti
nsur
edbyt
heassur
ed,whi
chwoul
dbe
pay
abl
e onhappeni
ngofev
entorcompl
eti
onofper
iod.Fur
theri
tal
soi
ncl
udest
he
‘
Bonus’
,i
fdecl
ared,byt
hei
nsur
ancecompany
;shar
eofpr
ofi
ts,
ifi
tbea par
ti
cipat
ion
pol
i
cy;t
he‘
Sur
renderv
alue’oft
hepol
i
cywhendecl
aredbyt
hei
nsur
er,whi
chi
san
amountpay
abl
eonl
apsesofpol
i
cyduet
onon-
pay
mentofpr
emi
um orwher
eassur
ed
sur
render
spol
i
cy.
 TheSur
renderVal
uei
sthev
aluewhi
chi
stheamountpay
abl
etoy
oushoul
dyou
deci
det
odi
scont
inuet
hepol
i
cyandencasht
hesamef
rom LI
C.Sur
renderv
aluei
s
pay
abl
eonl
yaf
tert
hreef
ull
year
spr
emi
umsar
epai
dtoLI
C.

Per
sonsent
it
ledt
opay
ment
Thef
oll
owi
ngper
sonar
eent
it
ledt
othepay
mentofi
nsur
anceamountont
he
happeni
ngofanev
entagr
eeduponv
iz.
,
 Nomi nees
 Theassur edhi
msel
f
 Executors&Admini
str
ator
s
 Assignees
 Payees

Sec39Nomi
nat
ionbypol
icy
-hol
der
(
1)Thehol
derofapol
i
cyofl
i
fei
nsur
anceonhi
s ownl
i
femay
,whenef
fect
ingt
he
pol
i
cyor atanyt
imebef
oret
hepol
i
cymat
uresf
orpay
ment
,nomi
nat
etheper
sonor
per
sonst
owhom t
hemoneysecur
edbyt
hepol
i
cyshal
lbepai
dint
heev
entofhi
s
deat
h:
Pr
ovi
dedt
hat
,wher
eanynomi
neei
sami
nor
,itshal
lbel
awf
ulf
ort
hepol
i
cy-
hol
dert
oappoi
nti
nthepr
escr
ibedmanneranyper
sont
orecei
vet
hemoneysecur
ed
byt
hepol
i
cyi
ntheev
entofhi
sdeat
hdur
ingt
hemi
nor
it
yoft
henomi
nee
(
2)Anysuchnomi
nat
ioni
nor
dert
obeef
fect
ualshal
l
,unl
essi
tisi
ncor
por
ated i
nthe
t
extoft
hepol
i
cyi
tsel
f,bemadebyanendor
sementont
hepol
i
cycommuni
cat
edt
othe
i
nsur
erandr
egi
ster
edbyhi
m i
nther
ecor
dsr
elat
ing t
othepol
i
cyandanysuch
nomi
nat
ionmayatany t
imebef
oret
hepol
i
cymat
uresf
orpay
mentbecancel
l
edor
changedbyanendor
sementoraf
urt
herendor
sementorawi
l
l,ast
hecasemaybe,
but
unl
essnot
icei
nwr
it
ingofanysuchcancel
l
ati
onorchangehasbeendel
i
ver
edt
othe
i
nsur
er,
thei
nsur
ershal
lnotbel
i
abl
eforanypay
mentundert
hepol
i
cymadebonaf
ide
byhi
mtoanomi
neement
ionedi
nthet
extoft
hepol
i
cyorr
egi
ster
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he
i
nsur
er
(
3)Thei
nsur
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lfur
nisht
othepol
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hol
derawr
it
tenacknowl
edgementofhav
ing
r
egi
ster
edanomi
nat
ionoracancel
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ati
onorchanget
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eof
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eenot
exceedi
ngoner
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orr
egi
ster
ingsuchcancel
l
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onorchange
(
4)At
ransf
erorassi
gnmentofapol
i
cymadei
naccor
dancewi
thsect
ion38shal
l
aut
omat
ical
l
ycancel
anomi
nat
ion:
Pr
ovi
dedt
hatt
heassi
gnmentofapol
i
cyt
othe i
nsur
erwhobear
sthe r
iskon
t
he pol
i
cyatt
het
imeoft
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gnment
,inconsi
der
ati
onofal
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ant
edbyt
hat
i
nsur
eront
he
secur
it
yoft
hepol
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cywi
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ssur
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alue,ori
tsr
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gnmentonr
epay
mentof
t
hel
oanshal
lnotcancel
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laf
fectt
her
ight
soft
henomi
neeonl
yto
t
heext
entof t
hei
nsur
er'
sint
eresti
nthepol
i
cy
(
5)Wher
ethepol
i
cymat
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orpay
mentdur
ingt
hel
i
fet
imeoft
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i
fe
i
sinsur
edorwher
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emor
enomi
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lthe
nomi
neesdi
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oret
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i
cymat
uresf
orpay
ment
,theamountsecur
edbyt
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i
cy
shal
lbe pay
abl
etot
hepol
i
cy-
hol
derorhi
shei
rsorl
egalr
epr
esent
ati
vesort
hehol
der
ofasuccessi
oncer
ti
fi
cat
e,ast
hecasemaybe.
(
6)Wher
ethe nomi
nee or
,ift
her
e ar
e mor
e nomi
nees t
han one,a nomi
nee or
nomi
neessur
viv
etheper
sonwhosel
i
fei
sinsur
ed,t
heamountsecur
edbyt
hepol
i
cy
shal
lbepay
abl
etosuchsur
viv
ororsur
viv
ors.
(
7)Thepr
ovi
sionsoft
hissect
ionshal
lnotappl
ytoanypol
i
cyofl
i
fei
nsur
ancet
owhi
ch
sect
ion6oft
heMar
ri
edWomen'
sPr
oper
tyAct
,1874(
3of1874)appl
i
esorhasatany
t
imeappl
i
ed:
Pr
ovi
ded t
hat wher
e a nomi
nat
ion made whet
her bef
ore or af
ter t
he
commencementoft
heI
nsur
ance(
Amendment
)Act
,1946,
inf
avouroft
hewi
feoft
he
per
sonwhohasi
nsur
edhi
sli
feorofhi
swi
feandchi
l
drenoranyoft
hem i
sexpr
essed,
whet
herornotont
hef
aceof t
hepol
i
cy,asbei
ngmadeundert
hissect
ion,t
hesai
d
sect
ion6shal
lbedeemednott
oappl
y ornott
ohav
eappl
i
edt
othepol
i
cy.

Ty
pesofLi
feI
nsur
ance
Br
oadl
y,t
her
ear
efi
vebasi
cty
pesofl
i
fei
nsur
ancepl
ans:

1.Ter
minsur
ance
Ter
m pl
ansar
ethemostbasi
cfor
m ofl
i
fei
nsur
ance.Theypr
ovi
del
i
fecov
erwi
thnosav
ings
/pr
ofi
tscomponent
.Theyar
ethemostaf
for
dabl
efor
m ofl
i
fei
nsur
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emi
ums
ar
echeapercompar
edt
oot
herl
i
fei
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ancepl
ans.
2.Endowmentpl
ans
Endowmentpl
ansdi
ff
erf
rom t
erm pl
ansi
nonei
mpor
tantaspecti
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uri
ty
benef
it
.Unl
i
ket
erm pl
answhi
chpayoutt
hesum assur
ed,al
ongwi
thpr
ofi
ts,onl
yin
caseofanev
ent
ual
i
tyov
ert
hepol
i
cyt
erm,
endowmentpl
anspayoutt
hesum assur
ed
underbot
hscenar
ios–deat
handsur
viv
al.
3.Uni
tli
nkedi
nsur
ancepl
ans(
ULI
P)
 ULI
Psar
eav
ari
antoft
het
radi
ti
onalendowmentpl
an.Theypayoutt
hesum
assur
ed(
or t
hei
nvest
mentpor
tfol
i
oifi
t’
shi
gher
)ondeat
h/mat
uri
ty.Si
nceULI
Ps
i
nvesti
nst
ockmar
ket
stheyar
ewel
l
-sui
tedf
ori
ndi
vi
dual
swi
thappet
it
eforr
isk.
4.Whol
eli
fepol
icy
Awhol
eli
fei
nsur
ancepl
ancov
ersapol
i
cyhol
derov
erhi
sli
fe.Themai
nfeat
ure
ofawhol
eli
fepol
i
cyi
sthatt
hev
ali
dit
yoft
hepol
i
cyi
snotdef
inedsot
hei
ndi
vi
dual
enj
oyst
he l
i
fecov
ert
hroughouthi
sli
fe.
5.Moneybackpol
icy
Thi
sisav
ari
antoft
heendowmentpl
an.A moneybackpol
i
cygi
vesper
iodi
c
pay
ment
s ov
ert
hepol
i
cyt
erm.Tot
hatend,apor
ti
onoft
he sum assur
edi
spai
dout
atr
egul
ari
nter
val
s.I
fthepol
i
cyhol
dersur
viv
est
het
erm,heget
sthebal
ancesum
assur
ed.

Al
though,i
tisnotpossi
blet
oat
tachar
upeev
aluet
ohumanl
i
fe,i
tis nonet
hel
ess
i
mpor
tantf
ory
out
oest
imat
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alueofy
ourl
i
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nter
msofwhati
twi
l
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ami
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yindependenti
nyourabsence.I
ninsur
ancepar
lance
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sthesum assur
edandt
hef
inanci
alest
imat
eoft
hev
alueofy
ourl
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fei
scal
l
ed
HumanLi
feVal
ueorHLV.

Cal
cul
ati
ngt
heHLVi
nvol
vest
wost
eps:
Thef
undament
almet
hodofcal
cul
ati
ngt
hehumanl
i
fev
aluei
nvol
vest
wost
eps:
1.Addupal
lexpensesl
i
kehousehol
dexpenses,
li
fest
yleexpensesamongot
her
s
2.Cal
cul
atef
utur
eli
abi
l
iti
es(
li
keout
standi
ngl
oans)t
haty
ourf
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l
ymember
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l
l
hav
etopayof
fint
heev
entofy
ourdeat
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Oncey
ouaddt
het
wof
igur
es,
yougety
ourhumanl
i
fev
alue,
whi
chi
nef
fecti
sthe
sum assur
edf
ory
ourl
i
fei
nsur
ancepol
i
cy.

Benef
it
sofBuy
ingLi
feI
nsur
ance?

Li
fei
nsur
anceof
fer
sthr
eemaj
orbenef
it
s,namel
ypr
otect
ion,
long-
ter
m sav
ings,
andi
nvest
ment
.Her
eisani
nsi
ghti
ntoeachoft
heseadv
ant
ages.

Pr
1. ot
ect
ion
Li
fei
sunpr
edi
ctabl
eandf
ullofuncer
tai
nti
es.Ther
iskofanunt
owar
dinci
dent
suchasdeat
hcannotbeel
i
minat
ed.I
nsuchasi
tuat
ion,
yourf
ami
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l
lhav
etof
ace
f
inanci
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const
rai
ntscausedbyt
hel
ossofy
ourr
egul
ari
ncome.I
nvest
ingi
nal
i
fei
nsur
ance
pl
anpr
ovi
dest
hesaf
etynetdur
ingsucht
imes.Youri
nsur
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ovi
deri
sli
abl
etopay
t
hebenef
ici
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hepr
e-det
ermi
neddeat
hbenef
it
,thuskeepi
ngy
ourf
ami
l
y
pr
otect
edev
eni
nyourabsence.
Long-
2. ter
m sav
ings
I
tisi
mpor
tantt
oconsi
derl
i
fei
nsur
ancei
fyouar
eseeki
ngt
omakel
ong-
ter
m
sav
ings.Suchapr
oducthel
psy
out
osav
esy
stemat
ical
l
yandbui
l
dacor
pusf
ory
our
f
utur
e.The accumul
ated amountmay be used f
ormul
ti
ple pur
poses,such as
pur
chasi
nganewhome,f
undi
ngy
ourchi
l
d’sf
utur
eeducat
ionormeet
inghi
smar
ri
age
expenses,
amongmanyot
her
s.What
’smor
e,l
i
fei
nsur
ancepl
ansal
soof
ferr
egul
arpay
-
out
sint
hef
orm ofannui
ti
es,andi
sther
efor
e,anexcel
l
entmet
hodt
omeety
our
r
eti
rementgoal
s.
I
3.nv
est
ment
Uni
t-
LinkedI
nvest
mentPl
ans(
ULI
Ps)of
fer
edbyl
i
fei
nsur
ancepr
ovi
der
s ar
e
pr
imar
il
yinv
est
menti
nst
rument
s.Thi
smar
ket
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inkedpr
oductact
sasat
oolt
ocr
eat
e
weal
th.ULI
Psof
fersi
gni
fi
cantr
etur
nsont
hepr
emi
umspai
dtowar
dst
hei
nsur
ance
pol
i
cy.Mostl
i
fei
nsur
ancepl
anspr
ovi
deconsi
der
abl
eret
urnsdur
ingmat
uri
ty,t
hus
maki
ngi
tanat
tract
ivei
nvest
mentv
ehi
cle.

Besi
dest
hemaj
oraf
orement
ionedadv
ant
ages,l
i
fei
nsur
ancepl
ansof
fer a
host ofot
herbenef
it
s.Youmaycl
aimt
axdeduct
ionsunderSect
ion10,80C,and
80CCCoft
he I
ncomeTaxAct
,1961ont
hepr
emi
um pai
dtowar
dsy
ouri
nsur
ance
pol
i
cy.Youmayal
sobor
rowal
oanagai
nsty
ouri
nsur
ancepl
ani
ncaseofaf
inanci
al
cr
unch.

Buy
ingl
i
fei
nsur
ancepl
ani
sanecessi
ty.Whi
l
emanyi
nvesti
nsuchapl
an,not
al
lar
eawar
eoft
henumer
ousbenef
it
sitof
fer
s.Li
fei
nsur
ancepl
anshel
pyourf
ami
l
y
t
ideov
erdi
ff
icul
tti
mesandpr
ovi
det
hem wi
thf
inanci
alsuppor
tiny
ourabsence.
Besi
des,av
ail
i
ngof an i
nsur
ancepol
i
cyi
ncul
cat
est
hehabi
tofdi
sci
pli
nedsav
ings,
t
her
ebyenabl
i
ngy
out
obui
l
dagoodcor
pus.
 Nof
aul
tli
abi
li
ty
Sect
ion140i
nTheMot
orVehi
clesAct
,1988
140.Li
abi
l
ityt
opaycompensat
ioni
ncer
tai
ncasesont
hepr
inci
pleofnof
aul
t.
—
(
1)Wher
edeat
horper
manentdi
sabl
ementofanyper
sonhasr
esul
tedf
rom an
acci
dentar
isi
ngoutoft
heuseofamot
orv
ehi
cleormot
orv
ehi
cles,t
heowneroft
he
v
ehi
cleshal
l
,or
, ast
hecasemaybe,t
heowner
soft
hev
ehi
clesshal
l
,joi
ntl
yand
sev
eral
l
y,bel
i
abl
etopaycompensat
ioni
nrespectofsuchdeat
hordi
sabl
ementi
n
accor
dancewi
tht
hepr
ovi
sionsof t
hissect
ion.
(
2)Theamountofcompensat
ionwhi
chshal
lbe pay
abl
eundersub-
sect
ion(
1)i
n
r
espectoft
hedeat
hofanyper
sonshal
lbeaf
ixedsum off
if
tyt
housandr
upeesand
t
he amountofcompensat
ion pay
abl
e undert
hatsub-
sect
ion i
nrespectoft
he
per
manentdi
sabl
ementofanyper
sonshal
lbeaf
ixedsum oft
went
y-f
ivet
housand
r
upees.
(
3)I
nanycl
aimf
orcompensat
ionundersub-
sect
ion(
1),t
hecl
aimantshal
lnotbe
r
equi
redt
opl
eadandest
abl
i
sht
hatt
hedeat
horper
manentdi
sabl
ementi
nrespectof
whi
cht
hecl
aim hasbeenmadewasduet
oanywr
ongf
ulact
,negl
ectordef
aul
toft
he
ownerorowner
soft
hev
ehi
cleorv
ehi
clesconcer
nedorofanyot
herper
son.
(
4)Acl
aimf
orcompensat
ionundersub-
sect
ion(
1)shal
lnotbedef
eat
edbyr
easonof
anywr
ongf
ulact
,negl
ectordef
aul
toft
heper
soni
nrespectofwhosedeat
hor
per
manentdi
sabl
ementt
he cl
aim has been made norshal
lthe quant
um of
compensat
ionr
ecov
erabl
einr
espectofsuchdeat
horper
manentdi
sabl
ementbe
r
educedont
hebasi
soft
heshar
eofsuchper
soni
nther
esponsi
bil
i
tyf
orsuchdeat
hor
per
manentdi
sabl
ement
.
(
5)Not
wit
hst
andi
ngany
thi
ngcont
ainedi
nsub-
sect
ion(
2)r
egar
dingdeat
horbodi
l
y
i
njur
ytoanyper
son,f
orwhi
cht
heowneroft
hev
ehi
clei
sli
abl
etogi
vecompensat
ion
f
orr
eli
ef,hei
sal
sol
i
abl
etopaycompensat
ionunderanyot
herl
awf
ort
het
imebei
ng
i
nfor
ce:Pr
ovi
dedt
hatt
heamountofsuchcompensat
iont
obegi
venunderanyot
her
l
awshal
lber
educedf
rom t
heamountofcompensat
ionpay
abl
eundert
hissect
ionor
undersect
ion163A.
 Publ
icLi
abi
li
tyI
nsur
ance:Cov
erage,
Clai
m &Excl
usi
ons

Manya t
imes,i
tis possi
blef
ory
ourbusi
ness t
o cause unexpect
ed and
uni
ntent
ionaldamaget
othi
rdpar
ti
es.Forexampl
e,y
ouhav
epl
acedasi
gn-
boar
d on
t
hehi
ghwayabouty
ourbusi
ness,andi
tsuddenl
ydr
opsov
ert
hewal
ki
ngmanont
he
r
oad,
leadi
ngt
ohi
sinj
ury ordeat
h.Suchal
i
abi
l
itywhi
chdoesnotdi
rect
lyi
nvol
vey
ou
i
scov
eredunderaspeci
alki
ndofi
nsur
ancecal
l
edpubl
i
cli
abi
l
ityi
nsur
ance.

Whati
sPubl
icLi
abi
li
tyI
nsur
ance?
Anybusi
nesswhi
chhast
odealwi
thpubl
i
c,cl
i
ent
s,empl
oyeesoragent
sis
r
ecommendedt
otakepubl
i
cli
abi
l
ityi
nsur
ance.I
fyourbusi
nessoper
ati
onsl
eadt
o
f
inanci
al orl
egall
i
abi
l
iti
esony
oubyt
het
hir
dpar
ty,y
oumustconsi
dert
aki
ng
appr
opr
iat
epubl
i
cli
abi
l
ityi
nsur
ancet
ost
ayawayf
rom pr
obl
emsr
elat
edt
o such
unf
ort
unat
eev
ent
s.

ThePubl
i
cLi
abi
l
ityI
nsur
anceAct1991,pr
ovi
desf
ormandat
oryPubl
i
cLi
abi
l
ity
I
nsur
ance.Undert
he Act
,compani
es need t
otake f
ori
nst
all
i
ng,handl
i
ng any
hazar
doussubst
ancenot
if
iedundert
heEnv
ironmentPr
otect
ionAct
.

Thegr
owt
hofhazar
dousi
ndust
ri
es,
processesandoper
ati
onsi
nIndi
ahasbeen
accompani
ed by gr
owi
ng r
isks ofacci
dent
s,notonl
ytot
he wor
kmen ofsuch
under
taki
ngs, butal
somember
soft
hepubl
i
cint
hev
ici
nit
y.

Ther
efor
e,underPubl
i
c Li
abi
l
ityI
nsur
ance Act1991,ev
ery owner
,bef
ore
st
art
ingt
ohandl
eany hazar
doussubst
ance,hav
etot
akeoutoneormor
epol
i
cies
cov
eri
ng l
i
abi
l
iti
es f
orpr
ovi
dingi
mmedi
ater
eli
efonaspeci
fi
edscal
etoanyper
son
suf
fer
ingi
njur
yordamage t
opr
oper
ty,
int
heev
entofdeat
h,t
othel
egalhei
rsoft
he
deceased.

The Publ
i
c Li
abi
l
ityI
nsur
ance Act
,1991,has been enact
ed f
orpr
ovi
ding
i
mmedi
ater
eli
eft
otheper
sonsaf
fect
edbyacci
dent
s,occur
ri
ngwhi
l
ehandl
i
ngany
hazar
doussubst
anceandf
orot
heri
nci
dent
alandconnect
edmat
ter
s.

Ty
pesofPubl
icLi
abi
li
tyI
nsur
ance
I
nIndi
a,Publ
i
cLi
abi
l
ityI
nsur
ancei
scl
assi
fi
edi
ntot
hreemaj
ort
ypes:
1. Publ
i
cLi
abi
l
ityI
nsur
ance(
Indust
ri
alRi
sks)
:Thi
sismeantf
ormanuf
act
uri
ng
uni
tsandwar
ehouses.
2. Publ
i
cLi
abi
l
ityI
nsur
ance(
Non-
Indust
ri
alRi
sks)
:Thi
sismeantf
oranynon-
manuf
act
uri
nguni
tsl
i
kehospi
tal
s,r
etai
lout
let
s,school
s,I
TCompani
es,BPOs,cl
ubs,
et
c.
3. Publ
i
c Li
abi
l
ityI
nsur
ance undert
he Publ
i
c Li
abi
l
ity Act
:The Env
ironment
Pr
otect
ionAct1986andt
hePubl
i
cLi
abi
l
ityI
nsur
anceAct1991makei
tmandat
oryf
or
t
hebusi
nessdeal
i
ngi
nahazar
dousenv
ironmentt
otakesui
tabl
einsur
ance.

Whatal
lPubl
icLi
abi
li
tyI
nsur
anceCov
ers.Cov
erage,
Clai
m &Excl
usi
ons

I
ngener
al,anyunexpect
edev
entar
isi
ngoutofy
ourbusi
nessoper
ati
onst
hat
maybeposi
ngpr
obl
emsi
nyourbusi
nesswi
l
lbecov
eredbyt
hisi
nsur
ance.Howev
er,
y
ouhav
etospeci
fyt
henat
ureoft
heev
entandl
i
mitoff
inanci
alcompensat
ionbased
ont
he r
isks per
cei
ved.Thecl
aimsr
elat
edt
opubl
i
cli
abi
l
ityar
elesspr
edi
ctabl
eand
mayar
iseoutofanyunf
ort
unat
eev
ent
s,manyat
imesnotdi
rect
lyl
i
nkedt
othe
busi
nessoper
ati
ons.Mostcommoncov
eragesar
e:
• Cl
aimsar
isi
ngoutoft
heacci
dent
,inj
uryordamageony
ourbusi
nesspr
emi
ses
orar
isi
ngoutofev
ent
sinconnect
ionswi
thy
ourbusi
ness
• TheActofGodev
ent
s
• Legal
li
abi
l
ity
• Tr
anspor
tat
ionhazar
ds
• Pol
l
uti
onandcont
ami
nat
ion

HowPubl
icLi
abi
li
tyI
nsur
ancef
unct
ions?
Publ
i
cli
abi
l
ityi
nsur
ance i
snotamustf
or mostoft
hebusi
nessoper
ati
ons.
Howev
er,i
tisl
egal
l
ycompul
sor
yonl
yforbusi
nessest
hatoper
atei
nahazar
dous
env
ironmentorar
eexposedt
osi
mil
arbusi
nessoper
ati
ons.Howev
er,i
fyourbusi
ness
hast
odealwi
thmember
s oft
hepubl
i
c,sev
eralcl
i
ent
s,agent
sandcust
omer
s,i
tis
r
ecommendedt
oinsur
eyour
sel
ftopr
otecty
our
sel
ffr
om anyunexpect
edcl
aimsdue
t
ounf
ort
unat
eev
ent
.Letusunder
standhow i
twor
ks:
• Ev
aluat
ether
isksassoci
atedwi
thy
ourbusi
nessandt
heki
ndofl
ossy
ouwoul
d
f
acebecauseoft
heser
isks
• Compar
eandcheckdi
ff
erentcompani
esandpol
i
ciesbef
oref
inal
i
singapl
an
• Appr
oacht
hei
nsur
ancepr
ovi
dery
ouhav
edeci
dedandt
hengoaheadwi
tht
he
r
equi
reddocument
ati
onwor
k
• I
ncaseofaneedofanycl
aim,
inf
ormt
hecompanyi
mmedi
atel
y
• Submi
tthedul
l
yfi
l
ledi
ncl
aimf
orm al
ongwi
tht
her
equi
reddocument
s
• Asur
vey
orf
rom t
hecompanywi
l
lassesst
hepr
obl
em andt
henpr
epar
ethe
r
epor
taccor
dingl
y
• I
fyouar
eel
i
gibl
efort
hecl
aim,
youwi
l
lgeti
twi
thi
nthespeci
fi
edt
imef
rame
el
sewi
l
lbei
nfor
medaboutt
her
eject
ion
• I
ncasey
ouar
enotsat
isf
iedwi
tht
hedeci
sion,
youcanappr
oachacour
tofl
aw

El
igi
bil
it
yCr
it
eri
a
Thei
nsur
ancepr
emi
um andt
heot
herdet
ail
sdependont
het
ypeofbusi
ness
andt
heassoci
atedr
isks.Letusunder
standwhoal
lar
eel
i
gibl
eforpubl
i
cli
abi
l
ity
i
nsur
ance:
• Manuf
act
uri
nguni
ts
• Ot
herent
it
iesl
i
keI
Tcompani
es,
BPOs,
hot
els,
school
s,r
est
aur
ant
sandcl
ubs
• Uni
tsdeal
i
ngwi
thhazar
doussubst
ancesunderPubl
i
cLi
abi
l
ityAct
,
1991Publ
i
cLi
abi
l
ityI
nsur
anceCl
aim Pr
ocess
Oncey
ouhav
eboughtt
hepubl
i
cli
abi
l
ityi
nsur
ancepol
i
cy,y
oushoul
dal
sounder
stand
t
hecl
aim pr
ocess,
incaset
her
ear
isest
heneedt
omakeacl
aim.Letus seehow t
he
cl
aimi
smade:
• Ev
aluat
eandanal
yset
hel
ossanddamagey
ouhav
eencount
ered
• I
nfor
mthei
nsur
ancecompanyassoonaspossi
ble;
thi
sshoul
dbedonei
nwr
it
ing
• Col
l
ectt
heev
idenceandpr
oof
• Aptmedi
cal
cer
ti
fi
cat
esi
ncaseofi
njur
yordeat
h
• Submi
tdul
yfi
l
ledi
ncl
aimf
orm al
ongwi
tht
her
equi
reddocument
s
• Anassessorwi
l
lev
aluat
ethecaseanddeci
dewhet
hert
oacceptorr
ejectt
hecl
aim
• I
ncasey
ouar
enotsat
isf
iedwi
tht
hedeci
sion,
youcanappr
oacht
hecour
t

Document
sRequi
redf
orCl
aim Pr
ocess
Togetcl
aimsunderpubl
i
cli
abi
l
ityi
nsur
ance,
fol
l
owi
ngdocument
sar
eneeded
t
omaket
hecl
aims:
• Dul
yfi
l
ledi
ncl
aimf
orm al
ongwi
tht
her
equi
reddocument
s
• Medi
cal
cer
ti
fi
cat
esi
ncaseofi
njur
yordeat
h
• Copi
esofev
idenceandpr
oof

CasesWher
eyouCan’
tCl
aim Publ
icLi
abi
li
tyI
nsur
ance(
Excl
usi
ons)
 Thought
hepubl
i
cli
abi
l
ityi
nsur
ancecov
ersmostoft
hecases,
ther
ear
ecer
tai
n
si
tuat
ionsnotcov
eredundert
hisi
nsur
ance.Thesear
eal
socal
l
edexcl
usi
ons.Someof
t
hesecasesar
e:
• Lapsei
nper
for
mingl
egal
orcont
ract
ual
li
abi
l
ity
• I
ntent
ional
non-
compl
i
anceofsaf
etyorl
egal
prov
isi
on
• Lossofgoodwi
l
l,ment
all
ossordamage,l
i
bel
,sl
ander
,fal
sear
rest
,def
amat
ion
andot
hersi
mil
arcases
Compani
esOf
fer
ingPubl
i
cLi
abi
l
ityI
nsur
ancei
nIndi
a
I
ndi
aisadev
elopi
ngcount
rywi
thi
ndust
ri
esunderv
ari
oussect
orst
hatwoul
dneed
publ
i
cli
abi
l
ityi
nsur
ancebecauseofassoci
atedr
isksi
nvol
ved.Someoft
hecompani
es
pr
ovi
dingpubl
i
cli
abi
l
ityi
nsur
ancei
nIndi
aar
e:
• TATAAI
G
• HDFCEr
go
• Uni
tedI
ndi
aInsur
ance
• Baj
ajAl
l
ianz
I
mpor
tantAspect
s
Bef
orepur
chasi
ngapubl
i
cli
abi
l
ityi
nsur
ancepol
i
cy,y
oushoul
dbeawar
eofal
l
t
heaspect
srel
atedt
othei
nsur
ancei
nor
dert
ogett
hebestdeal
.
• Thel
i
mitofi
ndemni
tydef
inest
hesum i
nsur
edi
npubl
i
cli
abi
l
ityi
nsur
ance.I
tis
speci
fi
edasAnyOneAcci
dent(
AOA)andAnyOneYear(
AOY)l
i
mit
.Theappl
i
canthas
t
ochooset
her
ati
oofAOAt
oAOYf
rom anyoft
hef
oll
owi
ngchoi
ces:
1:1,
1:2,
1:3,
1:4.
• TheAOAl
i
miti
sassessedwi
tht
henat
ureofbusi
nessoper
ati
onsandwor
st
possi
blel
ossi
nthepr
emi
ses.TheAOYl
i
miti
sgener
all
ydet
ermi
nedast
hreet
imest
he
AOAl
i
mit
.

Adv
ant
agesofBuy
ingPubl
icLi
abi
li
tyI
nsur
ance
Looki
ngatv
ari
ousl
evel
sofr
isksi
nvol
vedwi
thv
ari
ouski
ndsofbusi
ness,
it
makessenset
opur
chaseapubl
i
cli
abi
l
ityi
nsur
ance.Someoft
headv
ant
agesoft
his
i
nsur
ancear
e:
• I
twi
l
lcov
erf
oranyki
ndofacci
dentt
hepubl
i
cfacesbecauseofy
ourbusi
ness
• I
twi
l
lcov
eranydamaget
opubl
i
cpr
oper
tycausedduet
oyourbusi
ness
• I
twi
l
llety
oucont
inuewi
thy
ourwor
kwi
thoutanyhi
ndr
ancei
nspi
teofl
i
abi
l
ity
i
ssues
• I
twi
l
lhel
pgetcov
eragef
orl
egal
fees,
incasey
ouneedt
ogot
othecour
tfor
somel
i
abi
l
itycase
 Formor
ecompr
ehensi
vepr
otect
ionPubl
i
cLi
abi
l
ityPol
i
cycanbeext
endedt
o
cov
erl
egal
expensesar
isi
ngoutof

 SuddenandAcci
dent
alPol
l
uti
on,
 ActofGodPer
il
s,
 Tr
anspor
tat
ion,
 Car
ri
ageoft
reat
edef
fl
uent
set
c.

 Cov
eragef
ordef
ensecosti
ncur
redwi
thpr
iorconsent
 Benef
itofRet
roact
iveDat
e.

KeyExcl
usi
ons

 War
 Del
i
ber
ate,
wil
l
ful
ori
ntent
ional
non-
compl
i
anceofanyst
atut
orypr
ovi
sion.
 I
oni
zi
ngr
adi
ati
ons
 Ar
isi
ngoutoff
ines,
penal
ti
es,
puni
ti
veand/
orexempl
arydamages

Appl
icat
ionf
orRel
ief
:

Undert
hePubl
i
cLi
abi
l
ityI
nsur
anceActanappl
i
cat
ionf
orr
eli
efmadeby t
he
appl
i
cantt
otheCol
l
ect
orwi
thi
n5y
ear
soft
heacci
dent
,af
tergi
vi
ngnot
icet
otheowner
and t
hei
nsur
erandgi
vi
ngt
hepar
ti
esanoppor
tuni
tyofbei
nghear
d,shal
lmaket
he
awar
ddet
ermi
ningt
heamountofr
eli
efpay
abl
e.Thev
ict
im wi
l
lhowev
erbef
reet
o
appr
oacht
heCour
tforhi
ghercompensat
ion.

Est
abl
ishmentofRel
iefFund:

Sect
ion 7A oft
he Publ
i
c Li
abi
l
ityI
nsur
ance Act
,empower
sthe Cent
ral
Gov
ernment t
oest
abl
i
shEnv
ironmentRel
i
efFund,bynot
if
icat
ioni
ntheof
fi
cial
Gazet
te,t
owar
ds t
heut
il
it
yofpay
ingr
eli
efunderanawar
dmadebyt
hecol
l
ect
or
underSect
ion7oft
hisAct
.

Powert
oCal
lforI
nfor
mat
ion,
Ent
ryandI
nspect
ion:

Publ
i
cLi
abi
l
ityI
nsur
anceActdeal
swi
tht
hepower
stocal
lfori
nfor
mat
ion,
ent
ry,
i
nspect
ion,
sear
chandsei
zur
e.Theownerofhazar
dousi
nst
all
ati
onbecomesobl
i
gat
ed
t
osubmi
ttoaper
sonaut
hor
izedbyt
heCent
ralGov
ernmentsuchi
nfor
mat
iont
he
i
nspect
or
r
easonabl
yneedsf
ort
hepur
poseofascer
tai
ning,anyr
equi
rement
s,r
uleordi
rect
ions
madeundert
hisAct
,requi
recompi
l
ati
on.

Powert
ogi
vedi
rect
ions:

Sect
ion12,oft
hePubl
i
cLi
abi
l
ityI
nsur
anceAct1991empower
stheCent
ral
Gov
ernmentt
oissue di
rect
ions i
n wr
it
ing t
o anyowner
,of
fi
cer
,oragency
.The
di
rect
ions al
so i
ncl
ude t
he pr
ohi
bit
ion orr
egul
ati
on ofhandl
i
ng hazar
dous
subst
ances.Mor
eov
er,
ital
socancont
rol
thesuppl
yorst
oppageofel
ect
ri
cit
y.

Of
fencesandPenal
ti
es:

ThePubl
i
cLi
abi
l
ityI
nsur
anceAct1991 pr
ovi
desf
ort
hepenal
ti
esofnon-

compl
i
ance:
Non-
compl
i
anceofnott
aki
ngani
nsur
ancepol
i
cy.

Fur
ther
mor
e,f
ail
uret
ocompl
ywi
thanydi
rect
ioni
ssuedwi
thr
egar
dtopr
ohi
bit
ionor
r
egul
ati
onoft
hehandl
i
ngofanyhazar
doussubst
anceorst
oppageofsuppl
yof
el
ect
ri
cit
y,wat
eret
c.

Puni
shabl
ewi
thani
mpr
isonmentf
orami
nimum per
iodofoney
earand si
x mont
hs
butwhi
chmayext
endt
osi
xyear
s,orwi
thf
ine,whi
chshal
lnotbel
esst
hanonel
akh
r
upeesorwi
thbot
h.
Bar
etextoft
heAct

THEPUBLI
CLI
ABI
LITYI
NSURANCEACT,
1991
ARRANGEMENTOFSECTI
ONS
1.
Shor
tti
tl
eandcommencement
.
2.
Def
ini
ti
ons.
3.
Liabi
l
ityt
ogi
ver
eli
efi
ncer
tai
ncasesonpr
inci
pleofnof
aul
t.
4.
Dut
yofownert
otakeouti
nsur
ancepol
i
cies.
5.
Ver
if
icat
ionandpubl
i
cat
ionofacci
dentbyCol
l
ect
or.
6.
Appl
i
cat
ionf
orcl
aimf
orr
eli
ef.
7.
Awar
dofr
eli
ef.
7A.Est
abl
i
shmentofEnv
ironment
alRel
i
efFund.
8.
Prov
isi
onsast
oot
herr
ightt
ocl
aim compensat
ionf
ordeat
h,et
c.
9.
Powert
ocal
lfori
nfor
mat
ion.
10.
Powerofent
ryandi
nspect
ion.
11.
Powerofsear
chandsei
zur
e.
12.
Powert
ogi
vedi
rect
ions.
13.Powert
omakeappl
i
cat
iont
oCour
tsf
orr
est
rai
ningownerf
rom handl
i
ng
hazar
doussubst
ances.
14.
Penal
tyf
orcont
rav
ent
ionofsub-
sect
i 1)orsub-
on( sect
i 2)ofsect
on( ion4or
f
ail
uret
ocompl
ywi
thdi
rect
ionsundersect
ion12.
15.
Penal
tyf
orf
ail
uret
ocompl
ywi
thdi
rect
ionundersect
ion9oror
derundersect
ion
11orobst
ruct
inganyper
soni
ndi
schar
geofhi
sfunct
ionsundersect
ion10or11.
16.
Off
encesbycompani
es.
17.
Off
encesbyGov
ernmentDepar
tment
s.
18.
Cogni
zanceofof
fences.
19.
Powert
odel
egat
e.
20.
Prot
ect
ionofact
iont
akeni
ngoodf
ait
h.
21.
Adv
isor
yCommi
tt
ee.
22.
Eff
ectofot
herl
aws.
23.
Powert
omake
r
ules.THESCHEDULE.
 THEPUBLI
CLI
ABI
LITYI
NSURANCEACT,
1991
ACTNO.6OF1991
22ndJanuar
[ y,1991.
]
AnActt
opr
ovi
def
orpubl
i
cli
abi
l
ityi
nsur
ancef
ort
he pur
pose of pr
ovi
ding
i
mmedi
ater
eli
eft
otheper
sonsaf
fect
edbyacci
dentoccur
ri
ngwhi
l
ehandl
i
ngany
hazar
doussubst
anceandf
ormat
ter
sconnect
edt
her
ewi
thori
nci
dent
alt
her
eto.
BEi
tenact
edbyPar
li
amenti
ntheFor
ty-
fi
rstYearofTheRepubl
i
cofI
ndi
aasf
oll
ows:
—
1.Shor
tti
tl
eandcommencement 1)Thi
.—( sActmaybecal
l
edt
hePubl
i
cLi
abi
l
ity
I
nsur
anceAct
,1991.
2)I
( tshal
lcomei
ntof
orceonsuchdat
east
heCent
ral
Gov
ernmentmay
,by
not
if
icat
ion,
appoi
nt.
2.
Def
ini
ti
ons.—I
nthi
sAct
,unl
esst
hecont
extot
her
wiser
equi
res,
—
[
(a)“
acci
dent
”meansanacci
denti
nvol
vi
ngaf
ort
uit
ousorsuddenoruni
ntended
occur
rencewhi
l
ehandl
i
nganyhaz
ardoussubst
ancer
esul
ti
ngi
ncont
inuousor
i
nter
mit
tentorr
epeat
edexposur
etodeat
hof
,ori
njur
yto,
anyper
sonordamaget
o
anypr
oper
tybutdoesnoti
ncl
ude anacci
dentbyr
easononl
yofwarorr
adi
o-act
ivi
ty;
(
b)“
Col
l
ect
or”meanst
heCol
l
ect
orhav
ing j
uri
sdi
cti
onov
ert
hear
eai
nwhi
cht
he
acci
dentoccur
s;
(
c)“
handl
i
ng”
,inr
elat
ion t
o any hazar
dous subst
ance,means t
he manuf
act
ure,
pr
ocessi
ng,t
reat
ment
,package,st
orage,t
ranspor
tat
ionbyv
ehi
cle,use,col
l
ect
ion,
dest
ruct
ion, conv
ersi
on,of
fer
ingf
orsal
e,t
ransf
erort
hel
i
keofsuchhazar
dous
subst
ance;
(
d)“
hazar
doussubst
ance”meansanysubst
anceorpr
epar
ati
onwhi
chi
sdef
inedas
hazar
doussubst
anceundert
heEnv
ironment(
Prot
ect
ion)Act
,1986(
29of1986)
,and
exceedi
ng such quant
it
y as may be speci
fi
ed,by not
if
icat
ion,by t
he Cent
ral
Gov
ernment
;
(
e)“
insur
ance”meansi
nsur
anceagai
nstl
i
abi
l
ityundersub-
sect
i 1)ofsect
on( ion3;
(
f)“
not
if
icat
ion”meansanot
if
icat
ionpubl
i
shedi
ntheof
fi
cial
Gazet
te;
[
(g)“
owner
”meansaper
sonwhoowns,
orhascont
rol
overhandl
i
ng,anyhazar
dous
subst
anceatt
het
imeofacci
dentandi
ncl
udes,
—
(
i)i
nthecaseoff
ir
m,anyofi
tspar
tner
s;
(
ii
)int
hecaseofanassoci
ati
on,
anyofi
tsmember
s;and
(
ii
i)i
nthecaseofacompany
,anyofi
tsdi
rect
ors,manager
s,secr
etar
iesor ot
her
of
fi
cer
swho i
sdi
rect
lyi
nchar
geof
,andi
sresponsi
blet
o,t
hecompanyf
ort
he
conductoft
hebusi
nessoft
hecompany
;
(
h)“
prescr
ibed”meanspr
escr
ibedbyr
ulesmadeundert
hisAct
;
ha)“
( Rel
i
efFund”meanst
heEnv
ironment
alRel
i
efFundest
abl
i
shedundersect
ion7A;
(
i)“
rul
es”meansr
ulesmadeundert
hisAct
;
(
j)“
vehi
cle”meansanymodeofsur
facet
ranspor
tot
hert
hanr
ail
way
s.

3.Li
abi
li
tyt
ogi
ver
eli
efi
ncer
tai
ncasesonpr
inci
pleofnof
aul
t 1)Wher
.—( edeat
hor
i
njur
ytoanyper
son(
othert
hanawor
kman)ordamaget
oanypr
oper
tyhasr
esul
ted
f
rom anacci
dent
,theownershal
lbel
i
abl
etogi
vesuchr
eli
efasi
sspeci
fi
edi
nthe
Schedul
eforsuchdeat
h,i
njur
yordamage.
(
2)I
nanycl
aimf
orr
eli
efundersub-
sect
i 1)(
on( her
einaf
terr
efer
red t
oint
hisActas
cl
aimf
orr
eli
ef)
,thecl
aimantshal
lnotber
equi
redt
opl
eadandest
abl
i
sht
hatt
hedeat
h,
i
njur
yordamagei
nrespectofwhi
cht
hecl
aim hasbeenmadewasduet
oanywr
ongf
ul
act
,negl
ectordef
aul
tofanyper
son.
Expl
anat
ion.—Fort
hepur
posesoft
hissect
ion,
—
(
i)“
wor
kman”hast
hemeani
ngassi
gnedt
oiti
ntheWor
kmen’
s Compensat
ionAct
,
1923(
8of1923)
;
(
ii
)“i
njur
y”i
ncl
udes per
manentt
otalorper
manentpar
ti
aldi
sabi
l
ityor si
ckness
r
esul
ti
ngoutofanacci
dent
.
4.Dut
yofownert
otakeouti
nsur
ancepol
ici 1)Ev
es.— ( ery ownershal
ltakeout
,
bef
ore hest
art
shandl
i
nganyhazar
doussubst
ance,oneormor
einsur
ancepol
i
cies
pr
ovi
dingf
orcont
ract
sofi
nsur
ancewher
ebyhei
sinsur
edagai
nstl
i
abi
l
ityt
ogi
ver
eli
ef
undersub-
sect
ion
(
1)ofsect
ion3:
Pr
ovi
dedt
hatanyownerhandl
i
nganyhazar
doussubst
ancei
mmedi
atel
ybef
oret
he
commencementoft
hisActshal
ltakeoutsuchi
nsur
ancepol
i
cyorpol
i
ciesassoonas
maybeandi
nanycasewi
thi
naper
iodofoney
earf
rom suchcommencement
.
(
2)Ev
eryownershal
lgett
hei
nsur
ancepol
i
cy,r
efer
redt
oinsub-
sect
i 1)
on( ,r
enewed
f
rom t
imet
oti
mebef
oret
heexpi
ryoft
heper
iodofv
ali
dit
yther
eofso t
hatt
he
i
nsur
ancepol
i
cies mayr
emai
ninf
orcet
hroughoutt
heper
ioddur
ingwhi
chsuch
handl
i
ngi
scont
inued.
2A)Noi
( nsur
ancepol
i
cyt
akenoutorr
enewedbyanownershal
lbe f
oranamount
l
esst
hant
heamountoft
hepai
d-upcapi
taloft
heunder
taki
nghandl
i
nganyhazar
dous
subst
anceandownedorcont
rol
l
edbyt
hatowner
,andmor
ethant
heamount
,not
exceedi
ngf
if
tycr
orer
upees,
asmaybepr
escr
ibed.
Expl
anat
ion.— Fort
hepur
posesoft
hissub-
sect
ion,“
pai
d-upcapi
tal
”means,i
nthe
caseof anownernotbei
ngacompany
,themar
ketv
alueofal
lasset
sandst
ocksof
t
heunder
taki
ngont
hedat
eofcont
ractofi
nsur
ance.
2B)Thel
( i
abi
l
ityoft
hei
nsur
erunderoneassur
ancepol
i
cyshal
lnotexceedt
heamount
speci
fi
edi
nthet
ermsoft
hecont
ractofi
nsur
ancei
nthati
nsur
ancepol
i
cy.
2C)Ev
( eryownershal
lal
so,t
oget
herwi
tht
heamountofpr
emi
um,payt
othei
nsur
er,
f
or bei
ngcr
edi
tedt
otheRel
i
efFundest
abl
i
shedundersect
ion7A,suchf
urt
her
amount
,notexceedi
ngt
hesum equi
val
entt
otheamountofpr
emi
um,asmaybe
pr
escr
ibed.
2D)Thei
( nsur
ershal
lremi
ttot
heaut
hor
it
yspeci
fi
edi
nsub-
sect
i 3)ofsect
on( ion7A
t
heamountr
ecei
vedf
rom t
heownerundersub-
sect
i 2C)f
on( orbei
ngcr
edi
tedt
othe
Rel
i
efFund i
nsuchmannerandwi
thi
nsuchper
iodasmaybepr
escr
ibedandwher
e
t
hei
nsur
erf
ail
stosor
emi
ttheamount
,itshal
lber
ecov
erabl
efr
om i
nsur
erasar
rear
s
ofl
andr
evenueorofpubl
i
cdemand.
(
3)TheCent
ral
Gov
ernmentmay
,bynot
if
icat
ion,
exemptf
rom t
heoper
ati
onofsub-
sect
ion
(
1)anyowner
,namel
y:—
(
a)t
heCent
ral
Gov
ernment
;
(
b)anySt
ateGov
ernment
;
(
c)anycor
por
ati
onownedorcont
rol
l
edbyt
heCent
ral
Gov
ernmentoraSt
ate
Gov
ernment
; or
(
d)anyl
ocal
aut
hor
it
y:
Pr
ovi
dedt
hatnosuchor
dershal
lbemadei
nrel
ati
ont
osuchownerunl
essaf
undhas
beenest
abl
i
shedandi
smai
ntai
nedbyt
hatowneri
n accor
dancewi
tht
her
ulesmade
i
nthi
sbehal
fformeet
inganyl
i
abi
l
ityundersub-
sect
i 1)ofsect
on( ion3.
5.
Ver
if
icat
ionandpubl
icat
ionofacci
dentbyCol
lect
or.
—Whenev
eri
tcomest
othe
not
iceoft
heCol
l
ect
ort
hatanacci
denthasoccur
redatanypl
acewi
thi
nhi
sjur
isdi
cti
on,
heshal
lver
if
ytheoccur
renceofsuchacci
dentandcausepubl
i
cit
ytobegi
veni
nsuch
mannerashedeemsf
itf
ori
nvi
ti
ngappl
i
cat
ionsundersub-
sect
i 1)ofsect
on( ion6.
6.
Appl
icat
ionf
orcl
aimf
orr
eli
ef 1)Anappl
.—( i
cat
ionf
orcl
aimf
orr
eli
efmaybemade—
(
a)byt
heper
sonwhohassust
ainedt
hei
njur
y;
(
b)byt
heowneroft
hepr
oper
tyt
owhi
cht
hedamagehasbeencaused;
(
c)wher
edeat
hhasr
esul
tedf
rom t
heacci
dent
,byal
loranyoft
hel
egal
r
epr
esent
ati
vesoft
hedeceased;
or
(
d)byanyagentdul
yaut
hor
isedbysuchper
sonorownerofsuchpr
oper
tyoral
lorany
oft
hel
egal
repr
esent
ati
vesoft
hedeceased,
ast
hecasemaybe:
Pr
ovi
dedt
hatwher
eal
lthel
egal
repr
esent
ati
vesoft
hedeceasedhav
enotj
oinedi
n
anysuchappl
i
cat
ionf
orr
eli
ef,
theappl
i
cat
ionshal
lbemadeonbehal
foforf
ort
he
benef
itofal
lthe
l
egalr
epr
esent
ati
vesoft
hedeceasedandt
hel
egalr
epr
esent
ati
veswho hav
enotso
j
oinedshal
lbei
mpl
eadedasr
espondent
stot
heappl
i
cat
ion.
(
2)Ev
eryappl
i
cat
ionundersub-
sect
i 1)shal
on( lbemadet
otheCol
l
ect
orandshal
lbe
i
nsuchf
orm,cont
ainsuchpar
ti
cul
arsandshal
lbeaccompani
edbysuchdocument
s
asmaybepr
escr
ibed.
(
3)Noappl
i
cat
ionf
orr
eli
efshal
lbeent
ert
ainedunl
essi
tismadewi
thi
nfi
vey
ear
sof
t
heoccur
renceoft
heacci
dent
.
7.
Awar
dofr
eli
ef 1)Onr
.—( ecei
ptofanappl
i
cat
ionundersub-
sect
i 1)ofsect
on( ion6,
t
heCol
l
ect
orshal
l
,af
tergi
vi
ngnot
iceoft
heappl
i
cat
iont
otheownerandaf
tergi
vi
ng
t
hepar
ti
esanoppor
tuni
tyofbei
nghear
d,hol
dani
nqui
ryi
ntot
hecl
aim or
,eachoft
he
cl
aims,
andmaymakeanawar
ddet
ermi
ningt
heamountofr
eli
efwhi
chappear
stohi
m
t
obej
ustand speci
fyi
ngt
heper
sonorper
sonst
owhom suchamountofr
eli
efshal
l
bepai
d.
(
2)TheCol
l
ect
orshal
lar
ranget
odel
i
vercopi
esoft
heawar
dtot
hepar
ti
esconcer
ned
expedi
ti
ousl
yandi
nanycasewi
thi
naper
iodoff
if
teenday
sfr
om t
hedat
eoft
heawar
d.
[
(3)Whenanawar
dismadeundert
hissect
ion,
—
(
a)t
hei
nsur
er,whoi
srequi
redt
opayanyamounti
nter
msofsuchawar
dandt
othe
ext
entspeci
fi
edi
nsub-
sect
i 2B)ofsect
on( ion4,shal
l
,wi
thi
naper
iodoft
hir
tyday
sof
t
hedat
eofannouncementoft
heawar
d,deposi
tthatamounti
nsuchmannerast
he
Col
l
ect
ormaydi
rect
;
(
b)t
heCol
l
ect
orshal
lar
ranget
opayf
rom t
heRel
i
efFund,
int
ermsofsuchawar
dand
i
naccor
dancewi
tht
heschememadeundersect
ion7A,t
otheper
sonorper
sons
r
efer
redt
oinsub-
sect
i 1)suchamountasmaybespeci
on( fi
edi
nthatscheme;
(
c)t
heownershal
l
,wi
thi
nsuchper
iod,deposi
tsuchamounti
nsuchmannerast
he
Col
l
ect
ormaydi
rect
.
(
4)I
nhol
dinganyi
nqui
ryundersub-
sect
i 1)
on( ,t
heCol
l
ect
ormay
,subj
ectt
oanyr
ules
madei
nthi
sbehal
f,f
oll
owsuchsummar
ypr
ocedur
eashet
hinksf
it
.
(
5)TheCol
l
ect
orshal
lhav
eal
lthepower
sofCi
vi
lCour
tfort
hepur
poseoft
aki
ng
ev
idence onoat
handofenf
orci
ngt
heat
tendanceofwi
tnessesandofcompel
l
ingt
he
di
scov
eryand pr
oduct
ionofdocument
sand mat
eri
alobj
ect
sand f
orsuchot
her
pur
posesasmaybe pr
escr
ibed;andt
heCol
l
ect
orshal
lbedeemedt
obeaCi
vi
lCour
t
f
or al
lthepur
poses of sect
ion195andChapt
erXXVIoft
heCodeofCr
imi
nal
Pr
ocedur
e,1973(
2of1974)
.
(
6)Wher
ethei
nsur
erort
heowneragai
nstwhom t
heawar
dismade under sub-
sect
i 1)f
on( ail
stodeposi
ttheamountofsuchawar
dwi
thi
ntheper
iodspeci
fi
edunder
sub-
sect
i 3)
on( ,suchamountshal
lber
ecov
erabl
efr
om t
heowner
,orast
hecasemay
be,
thei
nsur
erasar
rear
sofl
andr
evenueorofpubl
i
cdemand.
(
7)Acl
aimf
orr
eli
efi
nrespectofdeat
hof
,ori
njur
yto,
anyper
sonordamage t
o any
pr
oper
tyshal
lbedi
sposedofasexpedi
ti
ousl
y aspossi
bleandev
eryendeav
ourshal
l
bemadet
odi
sposeofsuchcl
aim wi
thi
nthr
eemont
hsoft
her
ecei
ptoft
heappl
i
cat
ion
f
orr
eli
efundersub-
sect
i 1)ofsect
on( ion6.
(
8)Wher
eanowneri
sli
kel
ytor
emov
eordi
sposeofhi
spr
oper
tywi
tht
heobj
ectof
ev
adi
ngpay
mentbyhi
m ofanyamountofawar
d,t
heCol
l
ect
ormay
,inaccor
dance
wi
tht
hepr
ovi
sionsofr
ules1t
o4ofOr
derXXXI
Xoft
heFi
rstSchedul
etot
heCodeof
Ci
vi
lPr
ocedur
e,1908(
5of1908)
,gr
antat
empor
aryi
njunct
iont
orest
rai
nsuchact
.

7A.Est
abl
ishmentofEnv
ironment
alRel
i 1)TheCent
efFund.— ( ralGov
ernmentmay
,
bynot
if
icat
ion,
est
abl
i
shaf
undt
obeknownast
heEnv
ironment
alRel
i
efFund.
(
2)TheRel
i
efFundshal
lbeut
il
isedf
orpay
ing,
inaccor
dancewi
tht
hepr
ovi
sionsoft
his
Actandt
heschememadeundersub-
sect
i 3)
on( ,r
eli
efundert
heawar
dmadebyt
he
Col
l
ect
orundersect
ion7.
(
3)The Cent
ralGov
ernmentmay
,bynot
if
icat
ion,make a scheme speci
fyi
ng t
he
aut
hor
it
yinwhi
cht
heRel
i
efFundshal
lvest
,themanneri
nwhi
cht
heRel
i
efFundshal
l
beadmi
nist
ered,t
hef
orm andt
hemanneri
nwhi
chmoneyshal
lbedr
awnf
rom t
he
Rel
i
ef Fund and f
oral
l ot
hermat
ter
s connect
ed wi
th ori
nci
dent
alt
othe
admi
nist
rat
ionoft
heRel
i
efFundandt
hepay
mentofr
eli
eft
her
efr
om.

8.Pr
ovi
sionsast
oot
herr
ightt
ocl
aim compensat
ionf
ordeat
h,et
c. 1)Ther
—( ightt
o
cl
aimr
eli
efundersub-
sect
i 1)ofsect
on( ion3i
nrespectofdeat
hof
,ori
njur
yto,any
per
sonordamaget
oanypr
oper
tyshal
lbei
naddi
ti
ont
oanyot
herr
ightt
ocl
aim
compensat
ioni
nrespectt
her
eofunderanyot
herl
awf
ort
het
imebei
ngi
nfor
ce.
2)Not
( wit
hst
andi
ngany
thi
ngcont
ainedi
nsub-
sect
i 1)
on( ,
wher
einr
espectofdeat
hof
,
ori
njur
yto,anyper
sonordamaget
oanypr
oper
ty,t
heowner
,li
abl
etogi
vecl
aimf
or
r
eli
ef,i
s al
sol
i
abl
etopaycompensat
ionunderanyot
herl
aw,t
heamountof such
compensat
ionshal
lber
educedbyt
heamountofr
eli
efpai
dundert
hisAct
.

9.
Powert
ocal
lfori
nfor
mat
ion.
—Anyper
sonaut
hor
isedbyt
heCent
ralGov
ernment
may
,fort
hepur
posesofascer
tai
ningwhet
heranyr
equi
rement
soft
hisActorofany
r
uleorofanydi
rect
iongi
venundert
hisActhav
ebeencompi
l
edwi
th,
requi
reanyowner
t
o submi
ttot
hatper
son such i
nfor
mat
ion ast
hatper
son mayr
easonabl
ythi
nk
necessar
y.
10.
Powerofent
ryandi
nspect
ion.
—Anyper
son,
aut
hor
isedbyt
heCent
ralGov
ernment
i
nthi
sbehal
f,shal
lhav
ear
ightt
oent
er,atal
lreasonabl
eti
meswi
thsuchassi
stance
as he consi
der
s necessar
y,any pl
ace, pr
emi
ses orv
ehi
cle,wher
e hazar
dous
subst
ancei
shandl
ed f
ort
hepur
poseofdet
ermi
ningwhet
heranypr
ovi
sionsoft
his
Actorofanyr
uleorofanydi
rect
iongi
venundert
hisActi
sbei
ngorhasbeencompi
l
ed
wi
thandsuchowneri
sboundt
orenderal
lassi
stancet
osuchper
son.
11.
Powerofsear
ch and sei
zur
e. 1)I
—( fa per
son,aut
hor
ised by t
he Cent
ral
Gov
ernmenti
nthi
sbehal
f,hasr
easont
obel
i
evet
hathandl
i
ngofanyhazar
dous
subst
ancei
staki
ng pl
acei
nanypl
ace,pr
emi
sesorv
ehi
cle,i
ncont
rav
ent
ionofsub-
sect
i 1)ofsect
on( ion4,hemayent
eri
ntoandsear
chsuchpl
ace,pr
emi
sesorv
ehi
cle
f
orsuchhandl
i
ngofhazar
doussubst
ance.
(
2)Wher
e,asar
esul
tofanysear
chundersub-
sect
i 1)anyhandl
on( i
ngofhazar
dous
subst
ancehasbeenf
oundi
nrel
ati
ont
owhi
chcont
rav
ent
ionofsub-
sect
i 1)of
on(
sect
ion4 hast
akenpl
ace,
hemaysei
zesuchhazar
doussubst
anceandot
hert
hings
whi
ch,i
nhi
sopi
nion,
wil
lbeusef
ulf
or,
orr
elev
antt
o,anypr
oceedi
ngundert
hisAct
:
Pr
ovi
dedt
hatwher
eiti
snotpr
act
icabl
etosei
zeanysuchsubst
anceort
hing,hemay
ser
veont
heowneranor
dert
hatt
heownershal
lnotr
emov
e,par
twi
th,orot
her
wise
dealwi
th,t
hehazar
doussubst
anceandsuchot
hert
hingsexceptwi
tht
hepr
evi
ous
per
missi
onoft
hatper
son.
(
3)Hemay
,ifhehasr
easont
obel
i
evet
hati
tisexpedi
entsot
odot
opr
eventan
acci
dent
,di
spose of t
he hazar
dous subst
ance sei
zed under sub-
sect
i 2)
on (
i
mmedi
atel
yinsuchmannerashemaydeem f
it
.
(
4)Al
lexpensesi
ncur
redbyhi
mint
hedi
sposal
ofhazar
doussubst
ancesundersub-
sect
ion
3)shal
( lber
ecov
erabl
efr
om t
heownerasar
rear
sofl
andr
evenueorofpubl
i
cdemand.
12.Powert
ogi
vedi
rect
ions.
—Not
wit
hst
andi
ngany
thi
ngcont
ainedi
nanyot
herl
awbut
subj
ectt
othepr
ovi
sionsoft
hisAct
,theCent
ralGov
ernmentmay
,inexer
ciseofi
ts
power
s andper
for
manceofi
tsf
unct
ionsundert
hisAct
,issuesuchdi
rect
ionsi
n
wr
it
ing asi
tmay deem f
itf
ort
hepur
posesoft
hisActt
oanyowneroranyper
son,
of
fi
cer
,aut
hor
it
yoragencyandsuchowner
,per
son,of
fi
cer
,aut
hor
it
yoragencyshal
l
beboundt
ocompl
ywi
thsuchdi
rect
ions.
Expl
anat
ion.—Fort
her
emov
alofdoubt
s,i
tisher
ebydecl
aredt
hatt
hepowert
oissue
di
rect
ionsundert
hissect
ioni
ncl
udest
hepowert
odi
rect
—
(
a)pr
ohi
bit
ionorr
egul
ati
onoft
hehandl
i
ngofanyhazar
doussubst
ance;
or
(
b)st
oppageorr
egul
ati
onoft
hesuppl
yofel
ect
ri
cit
y,wat
eroranyot
herser
vice.
13.Powert
o makeappl
icat
iont
o Cour
tsf
orr
est
rai
ning owner f
rom handl
ing
hazar
doussubst
ances.
—(1)I
ftheCent
ralGov
ernmentoranyper
sonaut
hor
isedby
t
hatGov
ernmenti
nthi
sbehal
fhasr
easont
obel
i
evet
hatanyownerhasbeenhandl
i
ng
anyhazar
doussubst
ancei
ncont
rav
ent
ionofanyoft
hepr
ovi
sionsoft
hisAct
,that
Gov
ernment or
,ast
hecasemaybe,
thatper
sonmaymakeanappl
i
cat
iont
oaCour
t,
noti
nfer
iort
othatof aMet
ropol
i
tanMagi
str
ateoraJudi
cialMagi
str
atef
ir
stcl
assf
or
r
est
rai
ningsuchownerf
rom suchhandl
i
ng.
(
2)Onr
ecei
ptoft
heappl
i
cat
ionundersub-
sect
i 1)
on( ,
theCour
tmaymakesuchor
der
asi
tdeemsf
it
.
(
3)Wher
eundersub-
sect
i 2)
on( ,
theCour
tmakesanor
derr
est
rai
ninganyownerf
rom
handl
i
nghazar
doussubst
ance,
itmay
,int
hator
der
—
(
a)di
rectsuchownert
odesi
stf
rom suchhandl
i
ng;
(
b)aut
hor
iset
heCent
ralGov
ernmentor
,ast
hecasemaybe,t
heper
sonr
efer
redt
oin
sub-sect
i 1)
on( ,i
fthedi
rect
ionundercl a)i
ause( snotcompl
i
edwi
thbyt
heownert
o
whom suchdi
rect
ioni
sissued,t
oimpl
ementt
hedi
rect
ioni
nsuchmannerasmaybe
speci
fi
edbyt
heCour
t.
(
4)Al
lexpensesi
ncur
redbyt
heCent
ral
Gov
ernment
,orast
hecasemaybe,
theper
son
i
nimpl
ement
ingt
hedi
rect
ionsofCour
tundercl b)ofsub-
ause( sect
i 3)
on( ,shal
lbe
r
ecov
erabl
efr
om t
heownerasar
rear
sofl
andr
evenueorofpubl
i
cdemand.
14.
Penal
tyf
orcont
rav
ent
ionofsub-
sect
i 1)orsub-
on( sect
i 2)ofsect
on ( ion 4or
f
ail
uret
ocompl
ywi
thdi
rect
ionsundersect
ion12.
—(1)Whoev
ercont
rav
enesany of
t
he pr
ovi
sionsofsubsect
i 1)orsub-
on( sect
i 2)orsub-
on( sect
i 2A)orsub-
on( sect
ion
2C)ofsect
( ion4orf
ail
stocompl
ywi
thanydi
rect
ioni
ssuedundersect
ion12,
heshal
l
bepuni
shabl
ewi
thi
mpr
isonmentf
orat
erm whi
chshal
lnotbel
esst
hanoney
earand
si
xmont
hsbutwhi
chmayext
endt
osi
xyear
s,orwi
thf
inewhi
chshal
lnotbel
esst
han
onel
akhr
upees,
orwi
thbot
h.
(
2)Whoev
er,hav
ingal
readybeenconv
ict
edofanof
fenceundersub-
sect
i 1)
on( ,i
s
conv
ict
edf
ort
hesecondof
fenceoranyof
fencesubsequentt
othesecondof
fence,he
shal
lbe puni
shabl
ewi
thi
mpr
isonmentf
orat
erm whi
ch shal
lnotbel
esst
hant
wo
y
ear
sbutwhi
ch mayext
endt
osev
eny
ear
sandwi
thf
inewhi
chshal
lnotbel
esst
han
onel
akhr
upees.
(
3)Not
hingcont
ainedi
nsect
ion360oft
heCodeofCr
imi
nalPr
ocedur
e,1973(
2of
1974)
,ori
nthePr
obat
ionofOf
fender
sAct
,1958(
20of1958)
,shal
lappl
ytoaper
son
conv
ict
edofanof
fenceundert
hisActunl
esssuchper
soni
sunderei
ght
eeny
ear
sof
age.
15.
Penal
tyf
orf
ail
uret
ocompl
ywi
thdi
rect
ion undersect
ion 9oror
derunder
sect
ion 11orobst
ruct
inganyper
soni
ndi
schar
geofhi
sfunct
ionsundersect
ion10
or11.
— I
fanyownerf
ail
stocompl
ywi
thdi
rect
ioni
ssuedundersect
ion9orf
ail
sto
compl
ywi
thor
deri
ssuedundersub-
sect
i 2)ofsect
on( ion11,orobst
ruct
sanyper
son
i
ndi
schar
geofhi
sfunct
ionsundersect
ion10orsub-
sect
i 1)orsub-
on( sect
i 3)of
on(
sect
ion11,heshal
lbepuni
shabl
ewi
thi
mpr
isonmentwhi
chmayext
endt
othr
ee
mont
hs,
orwi
thf
inewhi
chmayext
endt
otent
housandr
upees,
orwi
thbot
h.
16.
Off
encesbycompani 1)Wher
es.— ( eanyof
fenceundert
hisActhas been
commi
tt
edby acompany
,ev
eryper
sonwho,att
het
imet
heof
fencewascommi
tt
ed,
wasdi
rect
lyi
nchar
ge of
,andwasr
esponsi
blet
o,t
hecompanyf
ort
heconductoft
he
busi
nessoft
hecompany
,as wel
last
hecompany
,shal
lbedeemedt
obegui
l
tyoft
he
of
fenceandshal
lbel
i
abl
etobepr
oceededagai
nstandpuni
shedaccor
dingl
y:
Pr
ovi
dedt
hatnot
hingcont
ainedi
nthi
ssub-
sect
ionshal
lrenderanysuchper
sonl
i
abl
e
t
oanypuni
shmentpr
ovi
dedi
nthi
sAct
,ifhepr
ovest
hatt
heof
fencewascommi
tt
ed
wi
thouthi
sknowl
edgeort
hatheexer
cisedal
lduedi
l
igencet
opr
eventt
hecommi
ssi
on
ofsuchof
fence.
(
2)Not
wit
hst
andi
ngany
thi
ngcont
ainedi
nsub-
sect
i 1)
on( ,wher
eanof
fenceundert
his
Act hasbeencommi
tt
edbyacompanyandi
tispr
ovedt
hatt
heof
fencehasbeen
commi
tt
edwi
tht
heconsentorconni
vanceof
,ori
sat
tri
but
abl
etoanynegl
ectont
he
par
tof
,anydi
rect
or,
manager
,secr
etar
yorot
herof
fi
ceroft
hecompany
,suchdi
rect
or,
manager
,secr
etar
yorot
herof
fi
cershal
lal
sobedeemedt
obegui
l
tyoft
hatof
fence
andshal
lbel
i
abl
etobepr
oceededagai
nstandpuni
shedaccor
dingl
y.
Expl
anat
ion.—Fort
hepur
posesoft
hissect
ion,
—
(
a)“
company
”meansanybodycor
por
ateandi
ncl
udesaf
ir
m orot
herassoci
ati
onof
i
ndi
vi
dual
s;
(
b)“
dir
ect
or,
”inr
elat
iont
oaf
ir
m,meansapar
tneri
nthef
ir
m.
17.
Off
encesbyGov
ernmentDepar
tment
s.— Wher
eanof
fenceundert
hisActhas
beencommi
tt
edbyanyDepar
tmentofGov
ernment
,theHeadoft
heDepar
tmentshal
l
bedeemed t
obegui
l
tyoft
heof
fenceandshal
lbel
i
abl
etobepr
oceededagai
nstand
puni
shedaccor
dingl
y:
Pr
ovi
ded t
hatnot
hing cont
ained i
nthi
s sect
ion shal
lrendersuch Head of t
he
Depar
tment l
i
abl
etoanypuni
shmenti
fhepr
ovest
hatt
heof
fencewascommi
tt
ed
wi
thouthi
s knowl
edge ort
hathe exer
cised al
ldue di
l
igence t
o pr
eventt
he
commi
ssi
onofsuchof
fence.
18.
Cogni
zanceofof
fences.— Nocour
tshal
ltakecogni
zanceofanyof
fenceunder
t
hisActexceptonacompl
aintmadeby
—
(
a)t
heCent
ralGov
ernmentoranyaut
hor
it
yorof
fi
ceraut
hor
isedi
nthi
sbehal
fbyt
hat
Gov
ernment
;or
(
b)anyper
sonwhohasgi
vennot
iceofnotl
esst
han si
xtyday
sint
hemanner
pr
escr
ibed,oft
heal
l
egedof
fenceandofhi
sint
ent
iont
o makea compl
aint
,tot
he
Cent
ral
Gov
ernmentort
heaut
hor
it
yorof
fi
ceraut
hor
isedasaf
oresai
d.
19.
Powert
odel
egat
e.—TheCent
ralGov
ernmentmay
,bynot
if
icat
ion,
del
egat
e,subj
ect
t
osuchcondi
ti
onsandl
i
mit
ati
onsasmaybespeci
fi
edi
nthenot
if
icat
ion,suchofi
ts
power
sandf
unct
ionsundert
hisAct(
exceptt
hepowerundersect
ion23)asi
tmay
deem necessar
yorexpedi
entt
oanyper
son(
incl
udi
nganyof
fi
cer
,aut
hor
it
yorot
her
agency
).
20.Pr
otect
ionofact
iont
akeni
ngoodf
ait
h.— Nosui
t,pr
osecut
ionorot
herl
egal
pr
oceedi
ng shal
lli
eagai
nstt
heGov
ernmentort
heper
son,of
fi
cer
,aut
hor
it
yorot
her
agency i
nrespectofany
thi
ngwhi
chi
sdoneori
ntendedt
obedonei
ngoodf
ait
hin
pur
suanceoft
hisActort
her
ulesmadeoror
der
sordi
rect
ionsi
ssuedt
her
eunder
.
21.
Adv
isor
yCommi
tt 1)TheCent
ee.— ( ralGov
ernmentmay
,fr
om t
imet
oti
me,
const
it
uteanAdv
isor
yCommi
tt
eeont
hemat
ter
srel
ati
ngt
othei
nsur
ancepol
i
cyunder
t
hisAct
.
(
2)TheAdv
isor
yCommi
tt
eeshal
lconsi
stof
—
(
a)t
hreeof
fi
cer
srepr
esent
ingt
heCent
ral
Gov
ernment
;
(
b)t
woper
sonsr
epr
esent
ingt
hei
nsur
ers;
(
c)t
woper
sonsr
epr
esent
ingt
heowner
s;and
(
d)t
woper
sonsf
rom amongstt
heexper
tsofi
nsur
anceorhazar
doussubst
ances.t
o
beappoi
ntedbyt
heCent
ral
Gov
ernment
.
(
3)TheChai
rmanoft
heAdv
isor
yCommi
tt
eeshal
lbeoneoft
hemember
srepr
esent
ing
t
heCent
ral
Gov
ernment
,nomi
nat
edi
nthi
sbehal
fbyt
hatGov
ernment
.
22.Ef
fectofot
herl
aws.—Thepr
ovi
sionsoft
hisActandanyr
ulesmadet
her
eunder
shal
lhav
eef
fectnot
wit
hst
andi
ngany
thi
ngi
nconsi
stentt
her
ewi
thcont
ainedi
nany
ot
herl
aw.
23.
Powert
omaker
ul 1)TheCent
es.—( ralGov
ernmentmay
,bynot
if
icat
ion,
make
r
ulesf
orcar
ryi
ngoutt
hepur
posesoft
hisAct
.
2)I
( npar
ti
cul
ar,
andwi
thoutpr
ejudi
cet
othegener
ali
tyoft
hef
oregoi
ngpower
,such
r
ulesmaypr
ovi
def
oral
loranyoft
hef
oll
owi
ngmat
ter
s,namel
y—
[
(a)t
hemaxi
mum amountf
orwhi
chani
nsur
ancepol
i
cymaybet
akenoutbyanowner
undersub-
sect
i 2A)ofsect
on( ion4;
aa)t
( heamountr
equi
redt
obepai
dbyev
eryownerf
orbei
ngcr
edi
tedt
otheRel
i
ef
Fundundersub-
sect
i 2C)ofsect
on( ion4;
ab)t
( hemanneri
nwhi
chandt
heper
iodwi
thi
nwhi
cht
heamountr
ecei
vedf
rom t
he
owneri
srequi
redt
ober
emi
tt
edbyt
hei
nsur
erundersub-
sect
i 2D)ofsect
on( ion4]
;
[
(ac)
]est
abl
i
shmentandmai
ntenanceoff
undundersub-
sect
i 3)ofsect
on( ion4;
(
b)t
hef
orm ofappl
i
cat
ionandt
hepar
ti
cul
arst
obegi
vent
her
einandt
hedocument
s
t
oaccompanysuchappl
i
cat
ionundersub-
sect
i 2)ofsect
on( ion6;
(
c)t
hepr
ocedur
eforhol
dingani
nqui
ryundersub-
sect
i 4)ofsect
on( ion7;
(
d)t
hepur
posesf
orwhi
cht
heCol
l
ect
orshal
lhav
epower
sofaCi
vi
lCour
tundersub-
sect
ion
5)ofsect
( ion7;
(
e)t
hemanneri
nwhi
chnot
iceoft
heof
fenceandoft
hei
ntent
iont
omakeacompl
aint
t
otheCent
ral
Gov
ernmentshal
lbegi
venundercl b)ofsect
ause( ion18;
(
f)anyot
hermat
terwhi
chi
srequi
redt
obe,
ormaybe,
prescr
ibed.
(
3)Ev
ery[
rul
eorscheme]madeundert
hisActshal
lbel
aid,
assoonasmaybeaf
teri
t
i
s made,bef
oreeachHouseofPar
li
ament
,whi
l
eiti
sinsessi
onf
orat
otalper
iodof
t
hir
tyday
swhi
chmaybecompr
isedi
nonesessi
onori
ntwoormor
esuccessi
ve
sessi
ons,
and i
f,bef
oret
heexpi
ryoft
hesessi
oni
mmedi
atel
yfol
l
owi
ngt
hesessi
onor
t
hesuccessi
vesessi
ons af
oresai
d,bot
hHousesagr
eei
nmaki
nganymodi
fi
cat
ioni
n
t
he[
rul
eorscheme]orbot
hHousesagr
eet
hatt
her
uleorschemeshoul
dnotbemade,
t
he[
rul
eorscheme]shal
lther
eaf
terhav
eef
fectonl
yinsuchmodi
fi
edf
orm orbeofno
ef
fect
,ast
hecase maybe;so,howev
er,t
hatanysuchmodi
fi
cat
ionorannul
ment
shal
lbewi
thoutpr
ejudi
cet
othev
ali
dit
yofany
thi
ngpr
evi
ousl
ydoneundert
hatr
uleor
scheme.

THESCHEDULE
Seesect
[ i 1)
on3( ]
(
i)Rei
mbur
sementofmedi
cal
expensesi
ncur
redupt
oamaxi
mum ofRs.12,
500i
n
eachcase.
(
ii
)Forf
atal
acci
dent
sther
eli
efwi
l
lbeRs.25,
000perper
soni
naddi
ti
ont
o
r
eimbur
sementofmedi
cal
expensesi
fany
,incur
redont
hev
ict
im upt
oamaxi
mum of
Rs.12,
500.
(
ii
i)Forper
manentt
otal
orper
manentpar
ti
aldi
sabi
l
ityorot
heri
njur
yorsi
ckness,
the
r
eli
efwi
l
lbe
(
a)r
eimbur
sementofmedi
cal
expensesi
ncur
red,
ifany
,upt
oamaxi
mum ofRs.
12,
500i
neachcaseand
(
b)cashr
eli
efont
hebasi
sofper
cent
ageofdi
sabl
ementascer
ti
fi
edbyanaut
hor
ised
phy
sici
an.Ther
eli
eff
ort
otal
per
manentdi
sabi
l
itywi
l
lbeRs.25,
000.
(
iv)Forl
ossofwagesduet
otempor
arypar
ti
aldi
sabi
l
itywhi
chr
educest
heear
ning
capaci
ty oft
hev
ict
im,
ther
ewi
l
lbeaf
ixedmont
hlyr
eli
efnotexceedi
ngRs.1,
000per
mont
hupt
oamaxi
mum of3mont
hs:pr
ovi
dedt
hev
ict
im hasbeenhospi
tal
i
sedf
ora
per
iodexceedi
ng3day
sandi
sabov
e16y
ear
sofage.
(
v)Upt
oRs.6,
000dependi
ngont
heact
ual
damage,
foranydamaget
opr
ivat
epr
oper
ty.
 Cat
tl
eInsur
ance:Cov
erage,
Clai
m &Excl
usi
ons

Cat
tl
e ar
e consi
der
ed one oft
he mostv
alued possessi
ons oft
he r
ural
communi
ty.Mar
ginal
,smal
landmedi
um f
armer
sear
nconsi
der
abl
epor
ti
onoft
hei
r
i
ncomef
rom cat
tl
erear
ing.Si
ncet
hel
i
vel
i
hoodoff
armer
sdependsomuchont
hem,
it
becomesi
mpor
tantt
ogetcat
tl
einsur
ancef
orcompr
ehensi
vecov
erageagai
nstcat
tl
e
l
oss.Cat
tl
einsur
ancei
sanot
herendeav
ouroft
heGov
ernmentofI
ndi
atopr
otectt
he
agr
o-basedeconomyoft
hecount
ry.

Whati
sCat
tl
eInsur
ance?

Cat
tl
einsur
ancepr
otect
sIndi
anr
uralpeopl
efr
om f
inanci
all
ossi
ncur
redduet
o
t
hedeat
hoft
hei
rcat
tl
e.Thecostofcat
tl
eishi
ghandt
hei
rlosscanf
orcef
armer
sto
geti
ntoa debtcy
cle.Wi
th cat
tl
einsur
ance,f
armer
s wi
l
lgetcompr
ehensi
ve
pr
otect
ionagai
nstt
hecat
tl
eloss.

Ty
pesofCat
tl
eInsur
ance

Ther
ear
etwot
ypesofr
iskswhi
char
einsur
edundert
hispol
i
cy:

1.Deat
hofcat
tl
e:I
tcov
ersl
ossofl
i
feduet
oacci
dentori
njur
yanddi
sease
occur
red duet
osur
gical
inf
ect
ion

2.Per
manentDi
sabi
li
tycov
er:
Itcov
erst
her
iskofper
manentandcompl
etedi
sabi
l
ity

WhatCat
tl
eInsur
anceCov
ers?

Besi
desdeat
hordi
sabi
l
itycausedbyf
ir
e,r
oadacci
dent
s,dr
owni
ng,
elect
rocut
ion,
snakebi
tesorpoi
soni
ng,
cat
tl
einsur
anceof
fer
scov
eragef
orot
heri
ssuesaswel
l
.
Theyi
ncl
ude:

 Deat
hduet
onat
ural
cal
ami
ti
esl
i
kest
ormsandear
thquakes
 Deat
hduet
odi
sease,
inf
ect
ionorcal
vi
ngdur
ingsur
gical
oper
ati
ons
 Per
manentdi
sabi
l
ity
,formi
l
chcowst
hisr
efer
stoi
ncapaci
tyt
oconcei
veand
y
iel
dmi
l
k.Forbul
l
s,t
hisr
efer
stoi
ncapaci
tyt
obr
eed

HowCat
tl
eInsur
anceFunct
ions?

Cat
tl
einsur
ancei
sani
mpor
tantaspectf
orl
i
vest
ockmanagementi
nrur
alar
ea.
Letusunder
standhowt
hisi
nsur
ancewor
ks.
  Fi
rstst
epi
stoi
dent
if
ythecat
tl
eanddet
ermi
net
hepr
iceoft
hecat
tl
ebef
ore
f
inal
i
zsng t
he sum assur
ed.Thi
sassessmenti
sjoi
ntl
ycar
ri
ed outbyt
he
benef
ici
aryandanaut
hor
isedv
eter
inar
ydoct
or
 Benef
ici
aryneedst
opayt
hepr
emi
um amountonmont
hlyory
ear
lybasi
s,
accor
dingt
othepol
i
cy
 I
ncaseofdeat
hordi
sabi
l
ityoft
hecat
tl
e,t
hebenef
ici
aryi
mmedi
atel
yinf
orms
t
hebankaboutt
hemi
shap
 Al
lther
equi
reddocument
sneedt
obesubmi
tt
edt
othei
nsur
ancecompany
 I
nsur
ancecompanyr
epr
esent
ati
vewi
l
lval
i
dat
eal
lthedocument
sandset
tl
ethecl
aim

El
igi
bil
it
yCr
it
eri
a

Cat
tl
eInsur
ancePol
i
cycov
erspeopl
ewhohav
e:

 Cows,
bul
l
ocksorbuf
fal
oesofei
thersex
 Cr
oss-
breedandexot
iccat
tl
eownedbypr
ivat
eowner
s,mi
l
itar
ydai
ryf
arms,
co-
oper
ati
vedai
ri
esandcor
por
atedai
ri
es
 Bot
h schemed and non-
schemed ani
mal
sfal
lundert
his pol
i
cy Schemed
ani
mal
sref
ert
ocat
tl
esubsi
disedunderNat
ionalLi
vest
ockDev
elopmentBoar
d
(
NLDB)andSt
ateLi
vest
ockDev
elopmentBoar
d(SLDB)

Thepol
i
cyseeker
sneedt
oensur
ethatatt
het
ime ofbuy
ing i
nsur
ance,t
hecat
tl
e
shoul
d notbei
njur
edorsuf
fer
ingf
rom somedi
sease.Theheal
thcondi
ti
onneedst
o
becer
ti
fi
edbyav
eter
inar
ysur
geon.Ani
mal
sundert
hef
oll
owi
ngagegr
oupar
eel
i
gibl
e
f
ort
hei
nsur
ancecov
er.

Ani
malTy
pe Ani
malAge

Mi
l
chCows 2y
r orageat1stcal
s/ vi
ng–10y
rs
Mi
l
chBuf
fal
oes 3y
r orageat1stcal
s/ vi
ng–12y
rs

St
udBul
l
s 3y
rs–8y
rs

Bul
l
ocks&Mal
eBuf
fal
oes 3y
rs–12y
rs

Femal
eCal
ves/Hei
fer
s From ageof4mont
hs–2y
rs/1st
calv
ing
 age,
whi
chev
eri
slower

From ageof4mont
hs–2y
rs/1st
Mi
l
chCow’
sof
fspr
ing calv
ing
age,
whi
cheverisl
ower
st
Upto3yr
s/1 calv
ingage,
whi
chev
eri
s
Mi
l
chBuf
fal
oesof
fspr
ing
l
ower

Document
sRequi
redf
orCl
aim Pr
ocess

Fol
l
owi
ngar
ethedocument
swhi
chshoul
dbesubmi
tt
edt
ogett
hecl
aim amount
:

 Pr
oposal
for
m
 Medi
cal
cer
ti
fi
cat
efr
om v
eter
inar
ydoct
or
 Mi
nimum 4phot
ogr
aphsoft
hei
nsur
edani
mal
 Dul
yfi
l
ledi
ncl
aimf
orm
 Recei
ptofpay
mentwhi
l
epur
chasi
ngt
heani
mal
 I
dent
if
icat
iont
agoft
hei
nsur
edcat
tl
e

Cl
aim Pr
ocess

Fol
l
owi
ngst
epsar
efol
l
owedt
opr
ocesscat
tl
einsur
ancecl
aims:

 Theownershoul
dimmedi
atel
yint
imat
ethei
nsur
eraboutt
hedeat
h/i
njur
yon
t
he24*
7tol
lfr
eecust
omercar
enumberoft
hepr
ovi
der
 Gett
hedeat
hcer
ti
fi
cat
eort
hecer
ti
fi
cat
eofdi
sabi
l
ityf
rom av
eter
inar
ypr
act
it
ioner
 Thebenef
ici
aryshoul
dal
sosubmi
tthedul
yfi
l
ledi
ncl
aimf
orm al
ongwi
tht
he
deat
h/di
sabi
l
itycer
ti
fi
cat
e
 Anaut
hor
isedmemberf
rom t
hei
nsur
ancecompanywi
l
lvi
sitt
hesi
teandv
eri
fy
t
hesubmi
tt
eddet
ail
s
 I
fthecl
aimi
sfoundt
obegenui
ne,
theamounti
spai
dtot
hebenef
ici
ary
,el
sei
t
i
srej
ect
ed

Excl
usi
ons
 Thought
hecat
tl
einsur
anceai
mst
ocov
ermostoft
her
ural
Indi
answhohav
ecat
tl
e,
t
hecl
aimi
snon-
pay
abl
eundert
hef
oll
owi
ngci
rcumst
ances.Someoft
hesecases of
excl
usi
onsar
e:

 Thef
torcl
andest
inesal
e
 Shi
pmentv
iaai
rway
sorsea
 Ter
ror
ism,
war
,radi
oact
ivi
tyandnucl
earexpl
osi
ons
 Negl
ect
,ov
er-
loadi
ngandt
reat
mentunderunski
l
leddoct
ors
 Usi
ngf
orot
herpur
poset
hanwhathasbeenment
ionedi
nthecl
aim pr
oposal
 Nott
reat
ingwhensi
ckornott
aki
nganyi
nit
iat
ivet
opr
eventt
hedeat
h
 Acci
dent
sori
njur
ywhi
choccur
redbef
oret
hecommencementoft
hepol
i
cy
 Sl
aught
eri
ngwi
thoutper
missi
onf
rom t
hev
eter
inar
yorgov
ernmentof
fi
cial

Ti
meTakent
oSet
tl
eCl
aims

Accor
dingt
oIRDA r
egul
ati
on,acat
tl
einsur
anceneedst
obeset
tl
edbyt
he
i
nsur
erwi
thi
n30day
sofcl
aim submi
ssi
on.I
ffur
theri
nvest
igat
ioni
sneeded,
thebank
cant
akemaxi
mum si
xmont
hst
oset
tl
ethecl
aim.

Compani
esof
fer
ingCat
tl
eInsur
ancei
nIndi
a

Someoft
hei
nsur
ancecompani
esof
fer
ingt
hispl
ani
nIndi
aar
e:
 HDFCEr
go
 Rel
i
anceGener
al
 I
CICILombar
d
 TATAAI
G
 Or
ient
alI
nsur
ance
 SBIGener
al

I
mpor
tantAspect
s

Al
soknownasl
i
vest
ocki
nsur
ance,t
hispol
i
cyi
sav
ail
abl
eforal
mostal
lcat
tl
e
owner
sofr
uralI
ndi
a.Howev
er,
bef
orebuy
ingani
nsur
ance,
thebel
owment
ionedf
act
s
mustbekepti
nmi
nd:
  Cat
tl
emustbepr
oper
lyv
acci
nat
edandf
edwi
thnut
ri
ti
ousf
ood.I
fint
ent
ional
car
elessnessi
sfoundast
hecauseofdeat
hordi
sabi
l
ity
,thecl
aim mi
ghtget
r
eject
ed
 Togett
hecl
aim appr
oval
,thebankmustbei
nti
mat
edi
mmedi
atel
yaf
tert
hemi
shap
 Ski
l
ledandcer
ti
fi
edv
eter
inar
ydoct
orshoul
dbeengagedt
otr
eatt
hecat
tl
e;el
se
t
hecl
aim mi
ghtgetr
eject
ed

Adv
ant
agesofBuy
ingCat
tl
eInsur
ance

Cat
tl
einsur
ancei
ntendst
obenef
itmaxi
mum numberofpeopl
einr
ural
Indi
a.The
i
nsur
ancepol
i
cypr
ovi
descov
erageagai
nstt
her
isksofdeat
handper
manent
di
sabi
l
ityduet
o

 Fami
nes
 Acci
dent
s
 Ear
thquakes
 Ri
otsorst
ri
kes
 Sur
gical
oper
ati
ons
 Fi
re,
expl
osi
on,
impl
osi
onandl
i
ght
ning
 Ai
rcr
aftdamageormi
ssi
l
etest
ingact
ivi
ti
es
 Di
seasecont
ract
edandi
nfect
ionwhi
chwasi
nfl
i
cteddur
ingt
hepol
i
cyper
iod
 Nat
ural
cal
ami
ti
esl
i
kest
orms,
tor
nado,
typhoons,
hur
ri
cane,
inundat
ionandf
loods
 Agr
icul
tur
einsur
ancei
nIndi
a

Agr
icul
tur
einI
ndi
aishi
ghl
ysuscept
ibl
etor
isksl
i
kedr
ought
sandf
loods.I
tis
necessar
yto pr
otectt
hef
armer
sfr
om nat
uralcal
ami
ti
esand ensur
ethei
rcr
edi
t
el
i
gibi
l
ityf
or t
henextseason.Fort
hispur
pose,t
heGov
ernmentofI
ndi
aint
roduced
manyagr
icul
tur
alschemest
hroughoutt
hecount
ry.

Cont
ent
s

1Pr
adhanMant
riFasal
Bima

Yoj
ana2Pr
evi
ousschemes

Far
mIncomeI
nsur
anceScheme

Nat
ional
Agr
icul
tur
eInsur
anceScheme

Pr
adhanMant
riFasalBi
maYoj
ana

The Pr
adhan Mant
riFasalBi
ma Yoj
ana (
Pri
me Mi
nist
er'
s Cr
op I
nsur
ance
Scheme)wasl
aunchedbyPr
imeMi
nist
erofI
ndi
aNar
endr
aModi
on13Febr
uar
y2016.
I
tenv
isagesauni
for
m pr
emi
um ofonl
y2percentt
obepai
dbyf
armer
sforKhar
if
cr
ops,and1.
5percent f
orRabicr
ops.Thepr
emi
um f
orannualcommer
cialand
hor
ti
cul
tur
alcr
opswi
l
lbe5percent
.

Pr
evi
ousschemes

Far
mIncomeI
nsur
anceScheme

TheCent
ralGov
ernmentf
ormul
atedt
heFar
mIncomeI
nsur
anceScheme(
FII
S)
dur
ing2003-
04.Thet
wocr
it
icalcomponent
sofaf
armer
'si
ncomear
eyi
eldandpr
ice.
FI
ISt
arget
edt
heset
wocomponent
sthr
oughasi
ngl
einsur
ancepol
i
cysot
hatt
he
i
nsur
edf
armercoul
dgetaguar
ant
eedi
ncome.

Theschemepr
ovi
dedi
ncomepr
otect
iont
othef
armer
sbyi
nsur
ingpr
oduct
ion
andmar
ketr
isks.Thei
nsur
edf
armer
swer
eensur
edmi
nimum guar
ant
eedi
ncome
(
thati
s,av
eragey
iel
dmul
ti
pli
edbyt
hemi
nimum suppor
tpr
ice)
.Ift
heact
uali
ncome
wasl
esst
hant
heguar
ant
eedi
ncome,
thei
nsur
edwoul
dbecompensat
edt
otheext
ent
oft
heshor
tfal
lbyt
heAgr
icul
tur
eInsur
anceCompanyofI
ndi
a.I
nit
ial
l
y,t
hescheme
woul
dcov
eronl
ywheatand r
iceandwoul
dbecompul
sor
yforf
armer
sav
ail
i
ngcr
op
l
oans.NAI
S(expl
ainedi
nthesect
ion
bel
ow)woul
dbewi
thdr
awnf
ort
hecr
opscov
eredunderFI
IS,
butwoul
dcont
inuet
obe
appl
i
cabl
eforot
hercr
ops.

TheFI
ISwaswi
thdr
awni
n2004.Ther
ecentat
temptbyt
heGuj
aratgov
ernment
t
orei
ntr
oducet
heFar
m I
ncomeI
nsur
anceScheme(
FII
S)can r
efor
m agr
icul
tur
al
i
nsur
anceandpr
eventf
arm-
lev
eldi
str
ess.

Nat
ionalAgr
icul
tur
eInsur
anceScheme

TheGov
ernmentofI
ndi
aexper
iment
edwi
thacompr
ehensi
vecr
opi
nsur
ance
schemewhi
chf
ail
ed.TheGov
ernmentt
heni
ntr
oducedi
n1999-
2000,anew scheme
t
it
led“
Nat
ional
Agr
icul
tur
alI
nsur
anceScheme”(
NAI
S)or“
Rasht
ri
yaKr
ishi
BimaYoj
ana”
(
RKBY)
.NAI
Senv
isagescov
erageofal
lfoodcr
ops(
cer
eal
sandpul
ses)
,oi
l
seeds,
hor
ti
cul
tur
aland commer
cialcr
ops.I
tcov
ersal
lfar
mer
s,bot
hloaneesandnon-
l
oanees,
undert
hescheme.

Thepr
emi
um r
atesv
aryf
rom 1.
5per
centt
o3.
5per
centofsum assur
edf
orf
ood
cr
ops.I
nthecaseofhor
ti
cul
tur
alandcommer
cialcr
ops,act
uar
ialr
atesar
echar
ged.
Smal
landmar
ginalf
armer
sar
eent
it
ledt
oasubsi
dyof50per
centoft
hepr
emi
um
char
ged- t
hesubsi
dyi
sshar
edequal
l
ybet
weent
heGov
ernmentofI
ndi
aandt
he
St
ates.Thesubsi
dyi
stobephasedoutov
eraper
iodof5y
ear
s.

NAI
Soper
atesont
hebasi
sof

Ar
eaappr
oach-def
inedar
easf
oreachnot
if
iedcr
opf
orwi
despr
eadcal
ami
ti
es.

Oni
ndi
vi
dualbasi
s-f
orl
ocal
i
zedcal
ami
ti
essuchashai
l
stor
ms,l
andsl
i
des,cy
clones
andf
loods.

Undert
hescheme,eachst
atei
srequi
redt
oreacht
hel
evelGr
am Panchay
atas
t
he uni
tofi
nsur
ance i
n a maxi
mum per
iod of3 y
ear
s.Agr
icul
tur
eInsur
ance
Cor
por
ati
onofI
ndi
aisi
mpl
ement
ingt
hescheme.
 Fi
rei
nsur
ance
Fi
resandot
herr
elat
edper
il
s,i
.e.ev
ent
swhi
chcauseaf
inanci
all
oss,hav
e
becomeacommoncauseofl
ossesi
nrecentt
imes.Theseper
il
scauseunspeakabl
e
l
osst
opr
oper
tyas wel
lasgoods.Thati
swhyhav
ingaf
ir
einsur
ancepol
i
cybecomes
i
mpor
tant
.Thepol
i
cycov
erst
hef
inanci
all
osst
hatoccur
stoourasset
swhent
heyar
e
damagedduet
ofi
reorot
hercov
eredper
il
s.Onecanbuyaf
ir
einsur
ancepl
anunder
t
hef
oll
owi
ngci
rcumst
ances–
• I
fyouar
eanownerofgoodsand/
orpr
oper
ty
• I
fyouar
eapawnbr
okerorpawnee(
pawnbr
oker– ani
ndi
vi
dualwhol
ends
moneyt
oanot
herbasedonanyassetpawnedbyanot
her
;pawneei
sani
ndi
vi
dualwho
l
endsmoneyt
oanot
heri
ndi
vi
dual
agai
nstanassetwhi
chi
spawned)
• I
fyouar
eamor
tgagee(
mor
tgageei
saf
inanci
ali
nst
it
uti
onwhi
chl
endsmoney
basedont
hemor
tgageofanasset
)
• I
fyouar
etheassi
gneeof
fi
cialr
ecei
verofasset
swher
einsol
vencypr
oceedi
ngs
ar
einv
olv
ed
• I
fyouar
eawar
ehouseownerandgoodsar
est
oredi
nyourwar
ehousef
orwhi
ch
y
ouar
eresponsi
ble
• I
fyouar
eani
ndi
vi
dual
whohasl
awf
ulpossessi
onofanygoodsorpr
oper
ty

Cov
erageunderf
ir
einsur
ancepol
ici
es
Fi
rei
nsur
ancepl
ansnotonl
ycov
erl
ossessuf
fer
edbyf
ir
ebutal
sol
osses
suf
fer
edbyot
herper
il
s.Thecommonper
il
swhi
char
ecov
eredunderf
ir
einsur
ance
pol
i
ciesi
ncl
udet
hef
oll
owi
ng–
• Fi
re,
expl
osi
onori
mpl
osi
on
• Li
ght
ning
• Damageduet
oanai
rcr
aft
• St
ri
kes,
riot
soranyot
hert
ypeofmal
i
ciousact
swhi
chcausedamage
• St
orm,
typhoon,
floodandi
nundat
ionwhi
chi
scol
l
ect
ivel
ycal
l
edSTFI
• I
mpactdamagewhi
choccur
soni
mpactwi
thr
oadorr
ail
vehi
cles,
ani
mal
s,et
c.
• Subsi
dence,
rocksl
i
desorl
andsl
i
des
• Ov
erf
lowi
ngorbur
sti
ngofwat
ert
anks,
pipesandot
herappar
atus
• Mi
ssi
l
etest
ingoper
ati
onsandt
hedamagescausedt
her
eof
• Wat
erl
eakagef
rom aut
omat
icspr
inkl
eri
nst
all
ati
onswhi
chcausesdamage
• Bushf
ir
e
Whati
snotcov
eredunderf
ir
einsur
ancepol
ici
es?
Despi
tecov
eri
nganumberofper
il
sbesi
desf
ir
e,f
ir
einsur
ancepol
i
ciesal
so
hav
esomecommonexcl
usi
ons.Theseexcl
usi
onsi
ncl
udet
hef
oll
owi
ng–
• Lossesbyf
ir
ewhi
chwascausedduet
oear
thquakes
• Per
il
sli
kewar
,inv
asi
onandt
hel
i
ke
• Per
il
sli
kemar
ti
all
aw,
insur
rect
ionorr
ebel
l
ion
• Under
groundf
ir
esandt
hel
ossest
hatt
heycause
• Thel
osssuf
fer
edwhent
hei
nsur
edpr
oper
tyi
sbur
nedont
hedi
rect
ives
ofapubl
i
caut
hor
it
y
• Thef
trel
atedl
ossessuf
fer
eddur
ingoraf
tert
hef
ir
e
• Spont
aneouscombust
ion
• Lossesf
acedbecauseofnucl
earper
il
s
• Lossessuf
fer
edbecauseofpol
l
uti
onand/
orcont
ami
nat
ion
• Anyt
ypeofconsequent
ial
losses

Somei
mpor
tantdef
ini
ti
ons
I
nsur
anceCompani
esAct
,1958ofEngl
anddef
inesf
ir
einsur
ancei
s“t
hei
ssue
of
,orunder
taki
ngofl
i
abi
l
ityunderpol
i
cyofI
nsur
anceagai
nstl
ossbyori
nci
dent
alt
o
f
ir
e”.

I
ndi
anI
nsur
anceAct
,1938def
ines“
Fir
einsur
ancebusi
nessast
hebusi
nessof
ef
fect
ing,ot
her
wiset
han i
nci
dent
all
yto someot
hercl
assofi
nsur
ancebusi
ness,
cont
ract
s ofi
nsur
ance agai
nstl
oss byori
nci
dent
alt
ofi
re orot
heroccur
rence
cust
omar
il
yincl
udedamongt
her
isksi
nsur
edagai
nsti
nfi
rei
nsur
ancepol
i
cy”
.
Accor
dingt
oHal
sbur
y“I
tisacont
ractofi
nsur
ancebywhi
cht
hei
nsur
eragr
ees
f
orconsi
der
ati
ont
oindemni
fyt
heassur
edupt
oacer
tai
next
entandsubj
ectt
ocer
tai
n
t
ermsandcondi
ti
onsagai
nstl
ossordamagebyf
ir
ewhi
chmayhappent
othepr
oper
ty
oft
heassur
eddur
ingspeci
fi
edper
iod”
.
Cot
tonLJ.
,whi
l
edeci
dingt
hecaseCast
ell
i
anv
.Per
tonhasopi
nedasr
egar
ds
f
ir
einsur
ancet
hati
tis“
Acont
ractwher
ebyoneper
sonunder
takesi
nret
urnf
oragr
eed
consi
der
ati
ont
oindemni
fyanot
herper
sonagai
nstl
ossordamageoccasi
onedbyf
ir
e
upt
otheagr
eedamount
”

Thebasi
cpr
inci
plest
hatgov
ernFi
reI
nsur
ance
(
i)Ut
mostgoodf
ait
h
 I
ninsur
ancecont
ract
s,t
hel
egaldoct
ri
neofut
mostgoodf
ait
happl
i
es.The
i
nsur
ed hast
hedut
yto di
scl
oseal
lmat
eri
alf
act
s,whi
chhav
eabear
ingont
he
i
nsur
ance.Abr
eachoft
hisdut
ymaymaket
hecont
ractv
oidorv
oidabl
e.Thedut
yof
di
scl
osur
econt
inuest
hroughoutt
hepol
i
cyper
iod.
Thef
ir
epr
oposalf
orm al
soi
ncl
udesadecl
arat
ionbyt
hei
nsur
edsay
ingt
hatt
he
st
atement
sdecl
aredbyhi
m ar
etr
ue,
andt
hatt
heycanf
ormt
hebasi
soft
hei
nsur
ance
cont
ract
.Thi
spr
inci
pleal
soexpect
sthei
nsur
edt
oactasi
fhei
suni
nsur
edal
lthet
ime,
andt
akecar
e andsaf
eguar
dhi
sasset
sfr
om t
heper
il
s.Fol
l
owi
ngal
oss,hei
sthen
expect
edt
osal
vageasmuchoft
hepr
oper
tyaspossi
ble.
Sect
ions19-
21oft
heMar
ineI
nsur
anceAct
,1963deal
swi
tht
heconceptof
uber
ri
maf
idesi
.e.ut
mostgoodf
ait
h.Thesesect
ionsappl
ytoal
lki
ndsofi
nsur
ance
pol
i
cieswi
thnecessar
ychanges.
Sec19-I
nsur suber
ancei ri
maef
idei
.
Acont
ractofmar
inei
nsur
ancei
sacont
ractbasedupont
heut
mostgoodf
ait
h,
andi
ftheut
mostgoodf
ait
hbenotobser
vedbyei
therpar
ty,t
hecont
ractmaybe
av
oidedbyt
heot
herpar
ty.

S20Di
scl
osur
ebyassur
ed.
(
1)Subj
ectt
othepr
ovi
sionsoft
hissect
ion,t
heassur
edmustdi
scl
oset
othei
nsur
er,
bef
oret
hecont
racti
sconcl
uded,ev
erymat
eri
alci
rcumst
ancewhi
chi
sknownt
othe
assur
ed,
andt
heassur
edi
sdeemedt
oknowev
eryci
rcumst
ancewhi
ch,
int
heor
dinar
y
cour
seofbusi
ness,oughtt
obeknownt
ohi
m.I
ftheassur
edf
ail
stomakesuch
di
scl
osur
e,t
hei
nsur
ermayav
oidt
hecont
ract
.
(
2)Ev
eryci
rcumst
ancei
smat
eri
alwhi
chwoul
dinf
luencet
hej
udgmentofapr
udent
i
nsur
eri
nfi
xi
ngt
hepr
emi
um,
ordet
ermi
ningwhet
herhewi
l
ltaket
her
isk.
(
3)I
ntheabsenceofi
nqui
ry,
thef
oll
owi
ngci
rcumst
ancesneednotbedi
scl
osed,
namel
y:-
-
(
a)anyci
rcumst
ancewhi
chdi
mini
shest
her
isk;
(
b)anyci
rcumst
ancewhi
chi
sknownorpr
esumedt
obeknownt
othei
nsur
er.The
i
nsur
eri
spr
esumedt
oknowmat
ter
sofcommonnot
ori
etyorknowl
edge,andmat
ter
s
whi
chani
nsur
eri
ntheor
dinar
ycour
seofhi
sbusi
nessassuch,
oughtt
oknow;
(
c)anyci
rcumst
anceast
owhi
chi
nfor
mat
ioni
swai
vedbyt
hei
nsur
er;
(
d)anyci
rcumst
ancewhi
chi
tissuper
fl
uoust
odi
scl
osebyr
easonofanyexpr
essor
i
mpl
i
edwar
rant
y.
(
4)Whet
heranypar
ti
cul
arci
rcumst
ance,
whi
chi
snotdi
scl
osed,
bemat
eri
alornoti
s,i
n
eachcase,
aquest
ionoff
act
.
(
5)Thet
erm"ci
rcumst
ance"i
ncl
udesanycommuni
cat
ionmadet
o,ori
nfor
mat
ion
r
ecei
vedby
,theassur
ed.
21.Di
scl
osur
ebyagentef
fect
ingi
nsur
ance.
Subj
ectt
othepr
ovi
sionsoft
hepr
ecedi
ngsect
ionast
oci
rcumst
anceswhi
ch
neednotbedi
scl
osed,
wher
eani
nsur
ancei
sef
fect
edf
ort
heassur
edbyanagent
,the
agentmustdi
scl
oset
othei
nsur
er—
(
a)ev
erymat
eri
alci
rcumst
ancewhi
chi
sknownt
ohi
msel
f,andanagentt
oinsur
eis
deemedt
oknowev
eryci
rcumst
ancewhi
chi
ntheor
dinar
ycour
seofbusi
nessoughtt
o
beknownby
,ort
ohav
ebeencommuni
cat
edt
ohi
m;and
(
b)ev
erymat
eri
alci
rcumst
ancewhi
cht
heassur
edi
sboundt
odi
scl
ose,unl
essi
t
comest
ohi
sknowl
edget
ool
atet
ocommuni
cat
eitt
otheagent
.

Ef
fectofNon-
Discl
osur
e
I
fmat
eri
alpar
ti
cul
arsar
enotdi
scl
osedandt
heconcer
nedper
sonkeepsqui
et,
whet
hermer
esi
l
enceamount
stof
raud?Expl
anat
ionappendedt
osec17ofI
ndi
an
Cont
ractAct
,pr
ovi
dest
hatsi
l
encemayamountt
ofr
audwher
ether
eisadut
ytospeak.
I
ftheper
sondi
dnotknow aboutt
hef
actt
hati
tismat
eri
alt
heni
tmayamountt
o
mi
srepr
esent
ati
on.Thecont
ractbecomesv
oidabl
e.Hencet
hepar
tydef
raudedmay
av
oidt
hecont
ractandcl
aim compensat
ion.
(
ii
)Insur
abl
eInt
erest
I
nsur
abl
eint
eresti
snotdef
inedi
nanyoft
heAct
sdeal
i
ngwi
thi
nsur
ance.I
tis
‘
ani
nter
estwhi
chcanbeori
spr
otect
edbycont
ractofi
nsur
ance’
.Somei
mpor
tant
def
ini
ti
onsofi
nsur
abl
eint
erestar
e:
Pat
ter
sondef
inesi
tas‘
Arel
ati
onbet
weent
hei
nsur
ed& t
heev
enti
nsur
ed
agai
nst
,sucht
hatt
heoccur
renceoft
heev
entwi
l
lcausesubst
ant
iall
ossori
njur
yof
someki
ndt
othei
nsur
ed’
.
I
nthe wor
ds ofW.
H.Rodda ‘
I
tis an i
nter
estofsuch a nat
uret
hatt
he
occur
renceof t
heev
enti
nsur
edagai
nstwoul
dcausef
inanci
all
osst
othei
nsur
ed’
R.M.Raydef
inest
hat‘
Whent
heassur
edi
ssosi
tuat
edt
hatt
hehappeni
ngof
t
heev
entonwhi
cht
hei
nsur
ancemoneyi
stobepay
abl
ewoul
dasanappr
oxi
mat
e
r
esul
tinv
olv
eint
hel
ossordi
minut
ionofanyr
ightr
ecogni
sedbyl
aw ori
nanyl
egal
l
i
abi
l
ityt
her
eisani
nsur
abl
eint
erestt
otheext
entoft
hel
ossorl
i
abi
l
ity
’.
 Ther
equi
rementofi
nsur
abl
eint
erestgi
vesl
egal
val
i
dit
ytoi
nsur
ancecont
ract
s
anddi
sti
ngui
shest
hem f
rom wager
s.I
tmaybedef
inedast
hel
egal
rightt
oinsur
e,
wher
ether
ightar
isesoutofapecuni
aryr
elat
ionshi
pbet
weent
hei
nsur
edandt
he
subj
ectmat
terofi
nsur
ance.
Thedest
ruct
ionordamaget
othel
att
eri
nvol
vest
hei
nsur
edi
nfi
nanci
all
oss.
Absol
utel
egalowner
shi
pisacl
earexampl
eofi
nsur
abl
eint
erest
.Fore.
g,abankora
f
inanci
ali
nst
it
uti
onwhi
chhasadv
ancedmoneyont
hesecur
it
yofapr
oper
ty,has
i
nsur
abl
eint
eresti
nthatpr
oper
ty.Ti
meandDur
ati
onofi
nsur
abl
eint
erest
I
nFi
rei
nsur
ancepol
i
cy,t
hei
nsur
abl
eint
erestshoul
dexi
statt
het
imeoft
aki
ng
t
hepol
i
cy,t
hroughouti
tscur
rencyper
iodandal
soatt
het
imeofl
oss/
clai
m.Fi
re
i
nsur
ancepol
i
ciesar
eper
sonalcont
ract
s,soi
fthepr
oper
tyi
ssol
dort
ransf
err
ed,t
he
pol
i
cyi
snott
ransf
err
edaut
omat
ical
l
y.I
ncaseofl
i
fei
nsur
ancei
nsur
abl
eint
eresthas
t
obet
her
eatt
het
imeofcommencementoft
hepol
i
cyonl
y.Fur
ther
,incaseofmar
ine
i
nsur
ancei
thast
obet
her
eatt
het
imeofl
ossonl
y.
Ki
ndsofi
nsur
abl
eint
erest
Ther
ear
etwot
ypesofi
nsur
abl
eint
erest
s
(
i)Cont
ract
ual
insur
abl
eint
erest(
uponent
eri
ngofcont
ractt
hei
nter
esti
scr
eat
ede.
g.
bymor
tgageofpr
oper
tyt
hemor
tgageei
npossessi
onwi
l
lhav
einsur
abl
eint
erest
)and
(
ii
)St
atut
oryi
nsur
abl
eint
erestwher
eint
hest
atut
erequi
rest
heexi
stenceofi
t.For
i
nst
ance,
int
erestr
equi
redbyst
atut
es–v
iz.
,
Li
feAssur
anceAct
,1774-Gambl
i
ngAct
,1845–Mar
ineI
nsur
anceAct
,1906i
s
St
atut
oryI
nsur
abl
eint
erest
.
(
ii
i)I
ndemni
ty
Theobj
ect
iveoft
hepr
inci
plei
stopl
acet
hei
nsur
ed,asf
araspossi
ble,i
nthe
samef
inanci
alposi
ti
onaf
teral
oss,ast
hatoccupi
edbyhi
m,i
mmedi
atel
ybef
oret
he
l
oss.
I
nsi
mpl
ewor
ds,t
hepr
inci
pleofi
ndemni
tymeanst
hei
nsur
edi
sindemni
fi
ed
onl
ytot
heext
entofhi
sloss,nopr
ofi
torunduebenef
iti
sext
ended.Thei
ndemni
tyi
s
subj
ectt
othe sum i
nsur
edandot
hert
ermsoft
hepol
i
cy.Thesum i
nsur
edcanbe
f
ixedont
hebasi
sofRei
nst
atementVal
ueorMar
ketVal
ue.Thet
erm‘
Mar
ketv
alue’
means,f
ori
nsur
ancepur
poses,t
hepr
esentcostofconst
ruct
ionofsi
mil
arbui
l
dings,
af
terdeduct
ingdepr
eci
ati
onbasedonage,
usage,
mai
ntenanceet
c.
Si
mil
arl
y,f
orpl
antand machi
ner
y,mar
ketv
aluei
sar
ri
ved atbydeduct
ing
sui
tabl
edepr
eci
ati
onf
orage,usage,wearandt
earet
c,f
rom t
hecur
rentr
epl
acement
cost
s.I
nal
lthecases,depr
eci
ati
onr
efer
stot
heact
uali
ntr
insi
cphy
sicaldepr
eci
ati
on
andnott
hoseusedf
oraccount
ingpur
poses.
(
iv)Subr
ogat
ion
Thepr
inci
palofsubr
ogat
ioni
sthecor
oll
aryoft
hepr
inci
pleofi
ndemni
ty.I
fthe
l
osssuf
fer
edbyt
hei
nsur
edcanber
ecov
eredf
rom t
hir
dpar
ti
es whoar
eresponsi
ble
f
ort
hel
oss, t
hei
nsur
ed’
sri
ght
sofr
ecov
eryar
etr
ansf
err
edorsubr
ogat
edt
othe
i
nsur
ers,
whent
heyi
ndemni
fyt
hel
oss.
(
v)Cont
ri
but
ion
The pr
inci
ple ofcont
ri
but
ion,whi
ch i
sal
so a cor
oll
aryoft
he pr
inci
ple of
i
ndemni
ty,
prov
idest
hati
fthesamepr
oper
tyi
sinsur
edundermor
ethanonepol
i
cy,
the
i
nsur
edcanr
ecov
erar
ateabl
epr
opor
ti
onoft
hel
ossundereachpol
i
cy.Underno
ci
rcumst
ancescanher
ecov
ermor
ethanhi
sloss,
andmakeapr
ofi
t.
(
vi)Pr
oxi
mat
ecause
Acausewhi
chi
mmedi
atel
ypr
ecedesandpr
oducest
heef
fect
,asdi
sti
ngui
shed
f
rom t
her
emot
e,medi
ate,orpr
edi
sposi
ngcause.Anactf
rom whi
chal
ossori
njur
y
r
esul
tsasanat
ural
,di
rect
,uni
nter
rupt
edconsequenceandwi
thoutwhi
cht
hel
ossor
i
njur
ywoul
dnothav
eoccur
red.
I
tist
hepr
imar
ycauseofal
ossori
njur
y.I
tisnotnecessar
il
ythecl
osestcause
i
nti
meorspacenort
hef
ir
stev
entt
hatset
sinmot
ionasequenceofev
ent
sleadi
ngt
o
ani
njur
y.
Pr
oxi
mat
ecausepr
oducespar
ti
cul
ar,f
oreseeabl
econsequences wi
thoutt
he
i
nter
vent
ionofanyi
ndependentorunf
oreseeabl
ecause.I
tist
heact
ive,di
rect
,and
ef
fi
cientcauseofl
ossi
ninsur
ancet
hatset
sinmot
ionanunbr
okenchai
nofev
ent
s
whi
chbr
ingaboutdamage,dest
ruct
ion,ori
njur
ywi
thoutt
hei
nter
vent
ionofanewand
i
ndependentf
orce.I
tisal
socal
l
edl
egal
ordi
rectcause.

Consequent
iall
ossbyf
ir
e
• Ki
ndsofConsequent
ial
lossbyf
ir
e
1.Lossofpr
ofi
t
2.St
andi
ngchar
ges
3.I
ncr
easedcostofwor
king
4.I
ncr
easedcostofr
einst
atement
5.Rent
6.Sal
ari
esofser
vant
s
7.I
nter
estonl
oanandanygener
alexpenses

Ty
pesoff
ir
einsur
ancepol
ici
esav
ail
abl
einI
ndi
a
 Di
ff
erentt
ypesoff
ir
einsur
ancepl
ansar
eof
fer
edi
nIndi
adependi
ngont
he
cov
erageneedofdi
ff
erenti
ndi
vi
dual
s.Thepol
i
ciescanbef
orf
ixedasset
sli
kebui
l
ding,
pl
antandpr
oper
tyorf
orgoodsandst
ocksoft
hebusi
ness.Thecommonl
yav
ail
abl
e
t
ypesoff
ir
einsur
ancepl
ansi
ncl
udet
hef
oll
owi
ng–
Forf
ixedasset
s
1.
Repl
acementv
aluepol
i
cy
Ast
henamesuggest
s,t
hispol
i
cywor
ksont
heconceptofr
epl
aci
ngt
heasset
whi
ch i
s damaged due t
o a cov
ered per
il
.The i
nsur
ance company pay
sthe
r
epl
acementv
alue oft
he assetwhi
ch i
s damaged.The r
epl
acementv
alue i
s
cal
cul
atedast
hemar
ketv
alueoft
heassetmi
nusdepr
eci
ati
onbasedont
heasset
’s
age.I
fthepr
oper
tyi
sinsur
ed,
thecostofconst
ruct
ionoft
hepr
oper
tyi
scov
eredunder
t
hepol
i
cy.I
nthecaseofot
herasset
s,t
hei
rrepl
acementv
alue i
scal
cul
atedandpai
d
asacl
aim.
2.
Rei
nst
atementv
aluepol
i
cy
Ar
einst
atementv
alue pol
i
cy i
s not
hing butan added cl
ause undert
he
r
epl
acementv
aluepol
i
cy.Aspert
hiscl
ause,t
hei
nsur
ancecompanyunder
takest
o
r
epl
acet
hedamagedpr
oper
tyt
oit
sor
igi
nalcondi
ti
onwhi
chwaspr
iort
othel
oss.
Rei
nst
atementcl
ausei
sappl
i
cabl
eonl
yforf
ixedasset
sli
kebui
l
dings.Ot
herasset
s
cannotbecov
eredundert
hiscl
ause.Mor
eov
er,y
ou getcov
erageonar
einst
atement
basi
sonl
yify
ouchooset
her
einst
atementcl
ausei
nthef
ir
einsur
ancepol
i
cy.I
fthe
cl
ausei
snotsel
ect
ed,
clai
mswoul
dbepai
donar
epl
acementv
aluebasi
sonl
y.

Forgoods,
stocksandot
hernon-
fi
xedasset
s
1.
Float
erpol
i
cy
Thi
spol
i
cyi
sidealf
orasset
swhi
char
elocat
edatdi
ff
erentl
ocat
ions.Asi
ngl
e
pol
i
cycanbet
akenf
oral
ltheasset
sandt
heasset
swoul
dbecov
eredonaf
loat
er
basi
s.Howev
er,t
oav
ailcov
erage,ev
eryl
ocat
ionandt
hev
alueoft
heasset
sateach
l
ocat
ionwoul
dhav
etobespeci
fi
ed.
2.
Decl
arat
ionpol
i
cy
Adecl
arat
ionpol
i
cyi
ssui
tabl
eforasset
swhosev
aluechangesdur
ingt
hey
ear
,
l
i
kest
ocksi
nabusi
ness.Undert
hispol
i
cy,apr
ovi
sionalsum i
nsur
edi
stakenandt
he
pr
emi
um i
spai
dfort
hesame.Thesum i
nsur
edwoul
drepr
esentt
hemaxi
mum r
iskof
t
hei
nsur
ancecompany
.Onceamont
hcompl
etes,t
hehi
ghestv
alueachi
evedbyt
he
f
luct
uat
ingasseti
srecor
dedanddecl
ared.Ther
eaf
ter
,theav
erageoft
hedecl
ared
v
aluei
scal
cul
atedandi
t
becomest
heact
ualsum i
nsur
edoft
hepol
i
cy.I
ftheact
ualsum i
nsur
edi
slowert
han
t
hepr
ovi
sional
sum i
nsur
ed,
youcancl
aim apr
emi
um r
efund.
3.
Float
erdecl
arat
ionpol
i
cy
Thi
spol
i
cyi
sthecombi
nat
ionoff
loat
erpol
i
cyanddecl
arat
ionpol
i
cy.Asset
s
st
oredatdi
ff
erentl
ocat
ionswhosev
aluesf
luct
uat
eov
ert
hey
earcanbecov
eredunder
asi
ngl
epol
i
cyt
hrought
hiscov
er.
4.
Speci
fi
cpol
i
cy
Thi
spol
i
cycov
erst
hel
ossupt
oaspeci
fi
camount
.Thespeci
fi
camounti
sthe
sum i
nsur
edoft
hepol
i
cywhi
chi
susual
l
ylowert
hant
heact
ual
val
ueoft
heasset
.
5.
Compr
ehensi
vepol
i
cy
Ast
henamesuggest
s,acompr
ehensi
vepol
i
cyhast
hewi
destscopeofcov
er
andcov
erst
heassetagai
nstt
hemaxi
mum numberofper
il
s.
6.
Val
uedpol
i
cy
Asset
swhosemar
ketv
aluecannotbeassessedcanbei
nsur
edunderav
alued
pol
i
cy.Undert
hepol
i
cy,cov
eragei
sal
l
owedf
oranagr
eedv
alueoft
heassetwhi
chi
s
t
hebestest
imat
eoft
heasset
’smar
ketv
alue.
7.
Val
uabl
epol
i
cy
Undert
hispl
an,
thesum i
nsur
edi
snotdeci
dedatt
het
imeofbuy
ingt
hepol
i
cy.
Thecl
aim amounti
scal
cul
atedatt
het
imeofl
oss.Tocal
cul
atet
hecl
aim amount
,the
mar
ketv
alueoft
heasseti
stakeni
ntoconsi
der
ati
on.
8.
Aver
agepol
i
cy
Theav
eragepol
i
cyi
saf
ir
einsur
ancepol
i
cywhi
chwor
ksont
hepr
inci
pleof
‘
Aver
ageCl
ause’
.Anav
eragecl
ausei
sappl
i
cabl
eify
ouav
ailasum i
nsur
edwhi
chi
s
l
owert
hant
heact
ualv
alueoft
hegood.I
nthatcase,whenacl
aimi
smade,y
oudon’
t
gett
hef
ullamountofcl
aim.Yougetanav
eragecl
aim whi
chi
scal
cul
atedi
npr
opor
ti
on
t
othesum i
nsur
edt
haty
ouhav
etaken.Fori
nst
ance,
supposet
hev
alueofanasseti
s
I
NR1l
akhandy
ouav
ailasum i
nsur
edofI
NR80,
000.Si
ncey
ouhav
einsur
edonl
y80%
oft
heasset
’sv
alue,y
ouwoul
dget80% cl
aim set
tl
ement
.So,i
fthecl
aimi
sforI
NR
50,
000,
thei
nsur
ancecompanywoul
dappl
ytheav
eragecl
auseandpayacl
aim ofonl
y
I
NR40,
000.

9.
Consequent
ial
losspol
i
cy
Thi
spol
i
cycov
erst
hel
ossofpr
ofi
twhi
chy
oucansuf
ferwhenf
ir
edi
srupt
syour
busi
ness.
Whi
cht
ypeoff
ir
einsur
ancepol
i
cyshoul
dyoubuy
?
Gi
vent
hedi
ff
erentt
ypesoff
ir
einsur
ancepl
answhi
char
eav
ail
abl
eint
he
mar
ket
,youmustf
eelconf
usedast
owhi
chpol
i
cyy
oushoul
dbuy
.Tocl
eart
his
conf
usi
on,t
her
ear
esomef
act
orswhi
chy
oushoul
dconsi
derwhenchoosi
ngt
her
ight
t
ypeoff
ir
einsur
ancepl
an.Thef
act
orswhi
chshoul
ddet
ermi
ney
ourchoi
ceoft
he
pol
i
cyi
ncl
udet
hef
oll
owi
ng–
1.
Thet
ypeofr
iskt
hati
sbei
ngcov
ered
Chooseapol
i
cybasedont
het
ypeofr
iskt
haty
ouf
ace.I
fyouhav
etoi
nsur
e
asset
satmul
ti
plel
ocat
ions,
chooseaf
loat
erpol
i
cy.I
fthev
alueofy
ourasset
scannot
beaccur
atel
yascer
tai
ned,
aval
uedpol
i
cywoul
dmakemor
esense.So,
chooseapol
i
cy
basedont
het
ypeofr
iskt
haty
ouf
ace
2.
Thenat
ureoft
heassetwhi
chy
ouwantt
oinsur
e
Asst
atedear
li
er,di
ff
erentt
ypesofasset
scanbei
nsur
edunderdi
ff
erentt
ypes
ofpl
ans.Forpr
oper
tyand f
ixed asset
s,y
ou can choose r
epl
acementv
alue or
r
einst
atementv
aluepol
i
cieswhi
l
eforot
herasset
sther
ear
eot
herpol
i
cies.So,
choose
apol
i
cysui
ti
ngt
heassetwhi
chi
stobei
nsur
ed.
3.
Exposur
eri
sks
Assessthet
ypesofr
iskst
owhi
cht
heasseti
sexposedandt
henchooset
hebest
pol
icy.
4.
Cov
eragedur
ati
on
I
tisi
mpor
tantt
oknow t
heper
iodf
orwhi
chy
ouneedt
otaket
hecov
erage
bef
orey
ousel
ectt
hemostsui
tabl
efi
rei
nsur
ancepol
i
cy.

Document
srequi
redf
orcl
aimr
egi
str
ati
oni
nfi
rei
nsur
ance
I
ncaseofacl
aim,
youshoul
dsubmi
tthef
oll
owi
ngdocument
sforr
egi
ster
ing
y
ourcl
aim wi
tht
hei
nsur
ancecompany–
1.
Copyoft
hepol
i
cybondwhi
chshoul
dal
soi
ncl
udet
heschedul
eofbenef
it
saswel
l
asanycl
auseswhi
chhav
ebeenat
tachedt
her
ein
2.
Thef
ir
einsur
ancecl
aimf
orm whi
chshoul
dbecompl
etel
yfi
l
ledandsi
gned
3.
Newspapercut
ti
ngwher
ethei
nst
anceoft
hef
ir
ehasbeenr
epor
ted(
Ifav
ail
abl
e)
4.
Prev
iouscl
aimr
ecor
ds,
ifany
5.
Phot
ogr
aphsoft
hedamagessuf
fer
ed
6.Pol
i
ceFI
R
7.
Repor
toft
hef
ir
ebr
igade
8.
Thef
orensi
crepor
t,i
fav
ail
abl
e
9.
Final
inv
est
igat
ionr
epor
t
 Oncet
hecl
aim i
sregi
ster
ed,t
hei
nsur
ancecompanywoul
d gett
hecl
aim
sur
vey
ed and t
hen t
he cl
aim woul
d be set
tl
ed.Fi
rei
nsur
ance i
sver
yimpor
tant
cov
eragef
orpr
otect
ionagai
nstt
hel
ossofasset
s.Lossescannotbeav
oidedbuty
ou
cani
nsur
eagai
nstsuchl
ossesi
fyouar
esmar
tandbuyt
her
ightt
ypeoff
ir
einsur
ance
pol
i
cy.

Cov
erageunderFi
reI
nsur
ancePol
icy
I
tcov
ersal
lthel
ossesar
isi
ngoutoft
heacci
dent
alf
ir
e,subj
ectt
oter
msand
condi
ti
onsoft
hef
ir
epol
i
cywhi
chi
sli
mit
edbyt
hepol
i
cyv
alueandnotbyt
heext
entof
damagesust
ainedbyt
hepr
oper
tyowner
.Ingener
al,
thef
oll
owi
ngl
ossesar
ecov
ered:
•Act
ual
lossofgoodsduet
ofi
re
•Addi
ti
onal
li
vi
ngexpensesduet
odamaget
oper
sonal
proper
ty
•Losst
oadj
acentbui
l
dingorpr
oper
tyduet
ofi
rei
nthei
nsur
edbui
l
ding
•Compensat
ionpai
dtof
ir
efi
ght
ers
•Fi
ret
ri
gger
edbyel
ect
ri
cit
y
•Ov
erf
lowi
ngofawat
ert
ankorpi
pes

Cl
aim Pr
ocess
I
fyouhappent
oencount
eranev
ent
ual
i
tybecauseoff
ir
e,y
ouneedt
omake
cl
aimsunderf
ir
einsur
ance.Toav
oidr
eject
ion andf
ast
ent
hecl
aim pr
ocess,y
ou
shoul
dbecl
earoft
hepr
ocedur
eandt
hedocument
sneeded.
•I
mmedi
atel
yinf
ormt
hei
nsur
ancepr
ovi
derei
theronl
i
neorbycal
l
ingont
hei
r24/
7tol
l
-
f
reenumber
•Al
so,
cont
actt
hef
ir
ebr
igadeandt
hepol
i
ce
•I
nsur
ancecompanywi
l
lappoi
ntasur
vey
orf
orscr
uti
nyoft
hesi
tuat
ion
•Submi
tthedul
yfi
l
ledi
ncl
aimf
orm andot
herpr
oof
sandphot
ogr
aphs
•I
fappr
oved,
thecl
aim canbeset
tl
edf
rom 15-
30day
s,ast
het
imedur
ati
oni
sdi
ff
erent
f
ort
hei
nsur
ancecompani
es

Excl
usi
onsi
nFi
reI
nsur
ancePol
i
cy
Notall
sit
uat
ionsandcasesar
ecov
eredbyf
ir
einsur
ance.Somesi
tuat
ionsar
e
excl
uded.
•Fi
recausedbywar
,nucl
earr
isks,
riotorear
thquake
•Pl
annedori
ntent
ional
fir
ebyt
heenemyorpubl
i
caut
hor
it
yforwhat
soev
err
easons
•Under
groundf
ir
e
•Lossbecauseoft
hef
tdur
ingoraf
tert
hef
ir
e
•Mal
i
ciousorhost
il
e,human-
madecausesoff
ir
e
Thi
sli
stdoesnoti
ncl
udeal
ltheexcl
usi
onsast
heyv
aryf
ordi
ff
erentpr
ovi
der
s

I
mpor
tantAspect
s
Theconceptofaf
ir
einsur
ancei
sbasedont
hreeessent
ial
condi
ti
onswhi
ch
shoul
dbemetbef
orey
oucanf
il
eacl
aim
•Ther
emustbeanact
ual
fir
eint
hei
nsur
edpr
emi
ses
•Thef
ir
emustbeacci
dent
alandbey
ondt
her
easonabl
econt
rol
oft
hepol
i
cyhol
der
•Lossordamagemustbeduet
obur
ningt
ri
gger
edbyacci
dent
alf
ir
e.Thedamageby
heatorf
ir
e,i
fnotacci
dent
al,
won’
tbeconsi
der
edasl
ossduet
ofi
re.Hence,
insur
ance
i
snotappl
i
cabl
einsuchi
nst
ances

Adv
ant
agesofBuy
ingFi
reI
nsur
ance
Consi
der
ingt
heamountt
hatt
hei
nsur
ancecompanycanpayf
ort
hel
ossesand
sav
eyou f
rom f
urt
herpr
obl
ems,y
ou shoul
d noti
gnor
e and under
est
imat
efi
re
i
nsur
ance.Letusl
ookatsomeoft
headv
ant
agesofbuy
ingt
hispol
i
cy:
•Homeowner
scangetbackt
hecostofdamaget
othest
ruct
ureoft
hehouse
•I
tal
socov
erst
hecostofr
epl
acementoft
hei
temsi
nthehouse,
suchasAC,
t
elev
isi
on,
comput
er,
etc.
•I
ncaseoff
act
oryandof
fi
ce,
thei
nsur
ancecancov
ert
hecostofdamagedst
ocks
•Thei
nsur
ancecancov
ert
hecostofr
epai
rofmachi
nes,
ift
heyar
edamaged.
 Mar
inei
nsur
ance
Mar
inei
nsur
ancecov
erst
hel
ossordamageofshi
ps,
car
go,
ter
minal
s,andany
t
ranspor
tbywhi
cht
hepr
oper
tyi
str
ansf
err
ed,acqui
red,orhel
dbet
weent
hepoi
ntsof
or
igi
nandt
hef
inaldest
inat
ion.Car
goi
nsur
ancei
sthesub-
branchofmar
inei
nsur
ance,
t
hough Mar
ine i
nsur
ance al
so i
ncl
udes Onshor
e and Of
fshor
e exposed pr
oper
ty,
(
cont
ainert
ermi
nal
s,por
ts,oi
lpl
atf
orms,pi
pel
i
nes)
,Hul
l
,Mar
ineCasual
ty,andMar
ine
Li
abi
l
ity
.Whengoodsar
etr
anspor
tedbymai
lorcour
ier
,shi
ppi
ngi
nsur
ancei
sused
i
nst
ead.

Hi
stor
y
Mar
inei
nsur
ancewast
heear
li
estwel
l
-dev
elopedki
ndofi
nsur
ance,
wit
hor
igi
ns
i
ntheGr
eekandRomanmar
inel
oan.I
twast
heol
destr
iskhedgi
ngi
nst
rument
sour
ancest
ors used t
o mi
ti
gat
eri
sk i
n medi
evalt
imes.Separ
ate mar
ine i
nsur
ance
cont
ract
swer
edev
elopedi
nGenoaandot
herI
tal
i
anci
ti
esi
nthef
our
teent
hcent
ury
andspr
eadt
onor
ther
nEur
ope.Pr
emi
umsv
ari
edwi
thi
ntui
ti
veest
imat
esoft
hev
ari
abl
e
r
iskf
rom seasonsandpi
rat
es.Moder
nmar
inei
nsur
ancel
aw or
igi
nat
edi
ntheLex
mer
cat
ori
a(l
awmer
chant
).I
n1601,
aspeci
ali
zedchamberofassur
ancesepar
atef
rom
t
heot
herCour
tswasest
abl
i
shed i
nEngl
and.Byt
heendoft
hesev
ent
eent
hcent
ury
,
London'
sgr
owi
ngi
mpor
tanceasacent
ref
ort
radewasi
ncr
easi
ngdemandf
ormar
ine
i
nsur
ance.I
nthel
ate1680s,Edwar
dLl
oydopenedacof
feehouseonTowerSt
reeti
n
London.I
tsoonbecameapopul
arhauntf
orshi
powner
s,mer
chant
s,andshi
ps'
capt
ains,
andt
her
ebyar
eli
abl
esour
ceoft
hel
atestshi
ppi
ngnews.
Ll
oyd'
sCof
feeHousewast
hef
ir
stmar
inei
nsur
ancemar
ket
.Itbecamet
he
meet
ingpl
acef
orpar
ti
esi
ntheshi
ppi
ngi
ndust
rywi
shi
ngt
oinsur
ecar
goesandshi
ps,
andt
hosewi
l
li
ngt
ounder
wri
tesuchv
ent
ures.Thesei
nfor
malbegi
nni
ngsl
edt
othe
est
abl
i
shmentoft
hei
nsur
ancemar
ket
,Ll
oyd'
sofLondonandsev
eralr
elat
edshi
ppi
ng
andi
nsur
ancebusi
nesses.Thepar
ti
cipat
ingmember
soft
hei
nsur
ancear
rangement
ev
ent
ual
l
yfor
medacommi
tt
eeandmov
edt
otheRoy
alExchangeonCor
nhi
l
last
he
Soci
ety of Ll
oyd'
s.The est
abl
i
shment of i
nsur
ance compani
es,a dev
elopi
ng
i
nfr
ast
ruct
ure of speci
ali
sts(
such as shi
pbr
oker
s,admi
ral
tyl
awy
ers,banker
s,
sur
vey
ors,
lossadj
ust
ers,
gener
alav
erageadj
ust
erset
c),
andt
hegr
owt
hoft
heBr
it
ish
Empi
regav
eEngl
i
shl
awapr
omi
nencei
nthi
sar
eawhi
chi
tlar
gel
ymai
ntai
nsandf
orms
t
hebasi
sofal
mostal
lmoder
npr
act
ice.Lor
dMansf
iel
d,Lor
dChi
efJust
icei
nthemi
d-
ei
ght
eent
hcent
ury
,begant
hemer
gingofl
aw mer
chantandcommonl
aw pr
inci
ples.
Thegr
owt
hoft
heLondoni
nsur
ancemar
ketl
edt
othest
andar
dizat
ionofpol
i
ciesand
j
udi
cialpr
ecedentf
urt
herdev
eloped mar
ine i
nsur
ance l
aw.I
n 1906 t
he Mar
ine
I
nsur
anceActcodi
fi
ed
t
hepr
evi
ouscommonl
aw;i
tisbot
hanext
remel
ythoughandconci
sepi
eceofwor
k.
Al
thought
het
it
leoft
heActr
efer
stoMar
ineI
nsur
ance,t
hegener
alpr
inci
pleshav
e
beenappl
i
edt
oal
lnon-
li
fei
nsur
ance.I
nthe19t
hcent
ury
,Ll
oyd'
sandt
heI
nst
it
uteof
LondonUnder
wri
ter
s(agr
oupi
ngofLondoncompanyi
nsur
ers)dev
elopedbet
ween
t
hem st
andar
dizedcl
ausesf
ort
heuseofmar
inei
nsur
ance,andt
hesehav
ebeen
mai
ntai
nedsi
nce.Thesear
eknownast
he‘
I
nst
it
uteCl
auses’becauset
heI
nst
it
ute
cov
ered t
he costoft
hei
rpubl
i
cat
ion.Outofmar
inei
nsur
ance,gr
ew non-
mar
ine
i
nsur
ance and r
einsur
ance.Mar
ine i
nsur
ance t
radi
ti
onal
l
yfor
med t
he maj
ori
tyof
busi
nessunder
wri
tt
enatLl
oyd'
s.Nowaday
s,Mar
inei
nsur
ancei
s of
tengr
oupedwi
th
Av
iat
ionandTr
ansi
t(car
go)r
isks,
andi
nthi
sfor
misknownbyt
heacr
ony
m'MAT'
.
I
tiscommonf
ormar
inei
nsur
anceagenci
est
ocompet
ewi
tht
heof
fer
ings
pr
ovi
ded by l
ocali
nsur
ers.These speci
ali
stagenci
es of
ten f
il
lmar
ketgaps by
pr
ovi
ding cov
erf
orhar
d-t
o-pl
ace orobscur
e mar
ine i
nsur
ance r
isks t
hatwoul
d
ot
her
wisebedi
ff
icul
tori
mpossi
blet
ofi
ndi
nsur
ancecov
erf
or.Theseagenci
escan
becomequi
tel
argeandev
ent
ual
l
ybecomemar
ketmaker
s.Theyoper
atebestwhen
t
hei
rdayt
odaymanagementi
sindependentoft
hei
nsur
erswhopr
ovi
det
hem wi
tht
he
capi
tal
tounder
wri
ter
isksont
hei
rbehal
f.
Pr
act
ice
TheMar
ineI
nsur
anceActi
ncl
udes,asaschedul
e,ast
andar
dpol
i
cy(
knownas
t
he"
SGf
orm"
),whi
chpar
ti
eswer
eatl
i
ber
tyt
ousei
ftheywi
shed.Becauseeacht
erm
i
nthepol
i
cyhadbeent
est
edt
hroughatl
eastt
wocent
uri
esofj
udi
cialpr
ecedent
,the
pol
i
cywasext
remel
ythor
ough.Howev
er,
itwasal
soexpr
essedi
nrat
herar
chai
cter
ms.
I
n1991,t
heLondonmar
ketpr
oducedanew st
andar
dpol
i
cywor
dingknownast
he
MAR91f
orm usi
ngt
heI
nst
it
uteCl
auses.TheMARf
ormi
ssi
mpl
yagener
alst
atement
ofi
nsur
ance;
theI
nst
it
uteCl
ausesar
eusedt
osetoutt
hedet
ailoft
hei
nsur
ancecov
er.
I
npr
act
ice,t
hepol
i
cydocumentusual
l
yconsi
stsoft
heMARf
orm usedasacov
er,
wi
tht
heCl
ausesst
apl
edt
othei
nsi
de.Ty
pical
l
y,eachcl
ausewi
l
lbest
amped,wi
tht
he
st
ampov
erl
appi
ngbot
hont
othei
nsi
decov
erandt
oot
hercl
auses;t
hispr
act
icei
s
usedt
oav
oidt
hesubst
it
uti
onorr
emov
alofcl
auses.Becausemar
inei
nsur
ancei
s
t
ypi
cal
l
y under
wri
tt
en on a subscr
ipt
ion basi
s,t
he MAR f
orm begi
ns:We,t
he
Under
wri
ter
s,agr
eet
obi
ndour
sel
veseachf
orhi
sownpar
tandnotonef
oranot
her[
..
.]
.
I
nlegalt
erms,
li
abi
l
ityundert
hepol
i
cyi
ssev
eralandnotj
oint
,i.
e.,
theunder
wri
ter
sar
e
al
lli
abl
etoget
her
,butonl
yfort
hei
rshar
eorpr
opor
ti
onoft
her
isk.I
foneunder
wri
ter
shoul
d def
aul
t,t
her
emai
nderar
enotl
i
abl
etopi
ckhi
sshar
eoft
hecl
aim.Ty
pical
l
y,
mar
inei
nsur
ancei
sspl
i
tbet
weent
hev
essel
sandt
hecar
go.I
nsur
anceoft
hev
essel
s
i
sgener
all
yknownas"
Hul
landMachi
ner
y"(
H&M)
.Amor
erest
ri
ctedf
orm ofcov
eri
s
"
Tot
alLossOnl
y"(
TLO)
,gener
all
y
usedasar
einsur
ance,
whi
chonl
ycov
erst
het
otall
ossoft
hev
esselandnotanypar
ti
al
l
oss.Cov
ermaybeonei
thera"
voy
age"or"
ti
me"basi
s.The"
voy
age"basi
scov
ers
t
ransi
tbet
weent
hepor
tssetouti
nthepol
i
cy;
the"
ti
me"basi
scov
ersaper
iod,
typi
cal
l
y
oney
ear
,andi
smor
ecommon.
Pr
otect
ionandi
ndemni
ty
Amar
inepol
i
cyt
ypi
cal
l
ycov
eredonl
ythr
ee-
quar
teroft
hei
nsur
ed'
sli
abi
l
iti
es
t
owar
dst
hir
dpar
ti
es(
Inst
it
uteTi
meCl
ausesHul
l
s1.
10.
83)
.Thet
ypi
call
i
abi
l
iti
esar
ise
i
nrespectofcol
l
isi
onwi
thanot
hershi
p,knownas"
runni
ngdown"(
col
l
isi
onwi
tha
f
ixedobj
ecti
san"
all
i
sion"
),andwr
eckr
emov
al(
awr
eckmayser
vet
obl
ockahar
bour
,
f
orexampl
e).I
nthe19t
hcent
ury
,shi
powner
sbandedt
oget
heri
nmut
ualunder
wri
ti
ng
cl
ubsknownasPr
otect
ionandI
ndemni
tyCl
ubs(
P&I
),t
oinsur
ether
emai
ningone-
quar
terl
i
abi
l
ityamongstt
hemsel
ves.TheseCl
ubsar
est
il
linexi
stencet
odayandhav
e
becomet
hemodelf
orot
herspeci
ali
zedandnon-
commer
cialmar
ineandnon-
mar
ine
mut
ual
,forexampl
einr
elat
iont
ooi
lpol
l
uti
onandnucl
earr
isks.Cl
ubswor
kont
he
basi
sofagr
eei
ngt
oacceptashi
pownerasamemberandl
evy
ingani
nit
ial"
cal
l
"
(
premi
um)
.Wi
tht
hef
undaccumul
ated,r
einsur
ancewi
l
lbepur
chased;howev
er,i
fthe
l
ossexper
iencei
sunf
avour
abl
eoneormor
e"suppl
ement
arycal
l
s"maybemade.
Cl
ubsal
sot
ypi
cal
l
ytr
ytobui
l
dupr
eser
ves,butt
hisput
sthem atoddswi
tht
hei
r
mut
ualst
atus.Because,
li
abi
l
ityr
egi
mesv
aryt
hroughoutt
hewor
ld,
insur
ersar
eusual
l
y
car
eful
tol
i
mitorexcl
udeAmer
icanJonesActl
i
abi
l
ity
.

Act
ualt
otall
ossandconst
ruct
ivet
otall
oss
Theset
wot
ermsar
eusedt
odi
ff
erent
iat
ethedegr
eeofpr
ooft
hatav
esselor
car
gohasbeenl
ost
.Anact
ualt
otall
ossoccur
swhent
hedamagesorcostofr
epai
r
cl
ear
lyequalorexceedt
hev
alueoft
hepr
oper
ty.Aconst
ruct
ivet
otall
ossi
sasi
tuat
ion
i
nwhi
cht
hecostofr
epai
rspl
ust
hecostofsal
vageequal
orexceedt
hev
alue.Theuse
oft
heset
ermsi
scont
ingentont
her
ebei
ngpr
oper
tyr
emai
ningt
oassessdamages,
whi
chi
snotal
way
spossi
blei
nlossest
oshi
psatseaori
ntot
alt
hef
tsi
tuat
ions.I
nthi
s
r
espect
,mar
inei
nsur
ancedi
ff
ersf
rom non-
mar
inei
nsur
ance,
wit
hwhi
cht
hei
nsur
edi
s
r
equi
redt
opr
ovehi
sloss.Tr
adi
ti
onal
l
y,i
nlaw,mar
inei
nsur
ancewasseenasan
i
nsur
anceof"
theadv
ent
ure"
,wi
thi
nsur
ershav
ingast
akeandani
nter
esti
nthev
essel
and/
ort
hecar
gor
athert
hansi
mpl
yani
nter
esti
nthef
inanci
alconsequencesoft
he
subj
ect
-mat
ter
'ssur
viv
al.

Thet
erm"
const
ruct
ivet
otall
oss"wasal
sousedbyt
heUni
tedSt
atesNav
y
dur
ingWor
ldWarI
Itodescr
ibenav
alv
essel
sthatwer
edamagedt
osuchanext
entt
hat
t
heywer
e
bey
ondeconomi
cal
repai
r.Thi
swasmostof
tenappl
i
edt
odest
roy
er-
typeshi
psi
n1945,
t
hel
asty
earoft
hewar
,manywhi
chwer
edamagedbykami
kazes.Byt
hist
imeenough
shi
pswer
eav
ail
abl
efort
hewart
hatsomecoul
dbedi
sposedofi
fsev
erel
ydamaged.

Gener
alav
erages
Av
eragei
nmar
inei
nsur
ancet
ermsi
s"anequi
tabl
eappor
ti
onmentamongal
l
t
hei
nter
est
edpar
ti
esofansuchanexpenseorl
oss.
"
Gener
alav
eragest
andsapar
tformar
inei
nsur
ance.I
nor
derf
orgener
alav
erage
t
obepr
oper
lydecl
ared,1)t
her
emustbeanev
entwhi
chi
sbey
ondt
heshi
powner
's
cont
rol
,whi
chi
mper
il
stheent
ir
eadv
ent
ure;2)t
her
emustbeav
olunt
arysacr
if
ice,3)
t
her
emustbesomet
hingsav
ed.Thev
olunt
arysacr
if
icemi
ghtbet
hej
ett
isonofcer
tai
n
car
go,t
heuseoft
ugs,orsal
vor
s,ordamaget
otheshi
p,bei
t,v
olunt
arygr
oundi
ng,
knowi
ngl
ywor
kingt
heengi
nest
hatwi
l
lresul
tindamages.Gener
alav
erager
equi
resal
l
par
ti
esconcer
nedi
nthemar
it
imev
ent
ure(
hul
l
/car
go/
frei
ght
/bunker
s)t
ocont
ri
but
eto
makegoodt
hev
olunt
arysacr
if
ice.Theyshar
etheexpensei
npr
opor
ti
ont
othe'
val
ue
atr
isk"i
ntheadv
ent
ure.Par
ti
cul
arav
eragei
sthet
erm appl
i
edt
opar
ti
all
ossbei
thul
l
orcar
go.

Av
erage
Av
eragei
sthesi
tuat
ioni
nwhi
cht
hei
nsur
edhasunder
-i
nsur
ed,i
.e.
,insur
edan
i
tem f
orl
esst
hani
tiswor
th.Av
eragewi
l
lappl
ytor
educet
hecl
aim amountpay
abl
e.
An av
erage adj
ust
eri
s a mar
ine cl
aims speci
ali
str
esponsi
blef
oradj
ust
ing and
pr
ovi
dingt
hegener
alav
eragest
atement
.AnAv
erageAdj
ust
eri
nNor
thAmer
icai
sa
'
memberoft
heassoci
ati
on ofAv
erageAdj
ust
ers'To ensur
ethef
air
nessoft
he
adj
ust
mentaGener
alAv
erageadj
ust
eri
sappoi
ntedbyt
heshi
pownerandpai
dbyt
he
i
nsur
er.

Excess,
deduct
ibl
e,r
etent
ion,
co-
insur
ance,
andf
ranchi
se
Anexcessi
stheamountpay
abl
ebyt
hei
nsur
edandi
susual
l
yexpr
essedast
he
f
ir
stamountf
all
i
ngdue,upt
oacei
l
ing,i
ntheev
entofal
oss.Anexcessmayormay
notbeappl
i
ed.I
tmaybeexpr
essedi
nei
thermonet
aryorper
cent
aget
erms.Anexcess
i
sty
pical
l
yusedt
odi
scour
agemor
alhazar
dandt
oremov
esmal
lcl
aims,whi
char
e
di
spr
opor
ti
onat
elyexpensi
vet
ohandl
e.Thet
erm"
excess"si
gni
fi
est
he"
deduct
ibl
e"or
"
ret
ent
ion"
.
Aco-
insur
ance,whi
cht
ypi
cal
l
ygov
ernsnon-
propor
ti
onalt
reat
yrei
nsur
ance,i
s
anexcessexpr
essedasapr
opor
ti
onofacl
aimi
nper
cent
aget
ermsandappl
i
edt
othe
ent
ir
etyofacl
aim.Co-
insur
ancei
sapenal
tyi
mposedont
hei
nsur
edbyt
hei
nsur
ance
car
ri
erf
orunder
r
epor
ti
ng/
decl
ari
ng/
insur
ingt
hev
alueoft
angi
blepr
oper
tyorbusi
nessi
ncome.The
penal
tyi
sbasedonaper
cent
agest
atedwi
thi
nthepol
i
cyandt
heamountunder
r
epor
ted.Asanexampl
e: av
esselact
ual
l
yval
uedat$1,
000,
000hasan80% co-
i
nsur
ancecl
ausebuti
sinsur
edf
oronl
y
$750,
000.Si
ncei
tsi
nsur
edv
aluei
slesst
han80%ofi
tsact
ualv
alue,
wheni
tsuf
fer
sa
l
oss,t
hei
nsur
ancepay
-outwi
l
lbesubj
ectt
otheunder
-r
epor
ti
ngpenal
ty,t
hei
nsur
ed
wi
l
lrecei
ve750000/
1000000t
h(75%)oft
hecl
aim madel
esst
hededuct
ibl
e.

Speci
ali
stpol
ici
es
Var
iousspeci
ali
stpol
i
ciesexi
st,
incl
udi
ng:
• Newbui
ldi
ngr
isks:Thi
scov
erst
her
iskofdamaget
othehul
lwhi
l
eiti
sunder
const
ruct
ion.
• OpenCar
goorShi
pper
’sI
nter
estI
nsur
ance:Thi
spol
i
cymaybepur
chasedbya
car
ri
er,f
rei
ghtbr
oker
,orshi
pper
,ascov
eragef
ort
heshi
pper
’sgoods.I
ntheev
entof
l
ossordamage,
thi
sty
peofi
nsur
ancewi
l
lpayf
ort
het
ruev
alueoft
heshi
pment
,rat
her
t
hanonl
ythel
egal
amountt
hatt
hecar
ri
eri
sli
abl
efor
.
• YachtI
nsur
ance:I
nsur
anceofpl
easur
ecr
afti
sgener
all
yknown as"
yacht
i
nsur
ance"andi
ncl
udesl
i
abi
l
itycov
erage.Smal
l
erv
essel
ssuchasy
acht
sandf
ishi
ng
v
essel
sar
ety
pical
l
yunder
wri
tt
enona"
bindi
ngaut
hor
it
y"or"
li
nesl
i
p"basi
s.
• Warr
isks:Gener
alhul
linsur
ancedoesnotcov
ert
her
isksofav
esselsai
l
ing
i
ntoawarzone.At
ypi
calexampl
eist
her
iskt
oat
ankersai
l
ingi
nthePer
sianGul
f
dur
ingt
heGul
fWar
.Ifanat
tacki
scl
assi
fi
edasa"
ri
ot"t
heni
twoul
dbecov
eredbywar
-
ri
ski
nsur
ers.
• I
ncr
easedVal
ue(
IV)
:Incr
easedVal
uecov
erpr
otect
stheshi
powneragai
nstany
di
ff
erencebet
weent
hei
nsur
edv
alueoft
hev
essel
andt
hemar
ketv
alueoft
hev
essel
.
• Ov
erduei
nsur
ance:Thi
sisaf
orm ofi
nsur
ancenow l
argel
yobsol
eteduet
o
adv
ancesi
ncommuni
cat
ions.I
twasanear
lyf
orm ofr
einsur
anceandwasboughtby
ani
nsur
erwhenashi
pwasl
ateatar
ri
vi
ngatherdest
inat
ionpor
tandt
her
ewasar
isk
t
hatshemi
ghthav
ebeenl
ost(
but
,equal
l
y,mi
ghtsi
mpl
yhav
ebeendel
ayed)
.The
ov
erduei
nsur
anceoft
heTi
tani
cwas4r
vfamousl
yunder
wri
tt
enont
hedoor
stepof
Ll
oyd'
s.
• Car
go i
nsur
ance:Car
go i
nsur
ance i
s under
wri
tt
en on t
he I
nst
it
ute Car
go
Cl
auses,
wit
hcov
erageonanA,
B,orCbasi
s,Ahav
ingt
hewi
destcov
erandCt
hemost
r
est
ri
cted.Val
uabl
ecar
goi
sknownasspeci
e.I
nst
it
uteCl
ausesal
soexi
stf
ort
he
i
nsur
anceofspeci
fi
cty
pesofcar
go,suchasf
rozenf
ood,f
rozenmeat
,andpar
ti
cul
ar
commodi
ti
essuchasbul
koi
l
,coal
,andj
ute.Of
tent
hesei
nsur
ancecondi
ti
onsar
e
dev
elopedf
oraspeci
fi
cgr
oupasi
sthecasewi
tht
heI
nst
it
uteFeder
ati
onofOi
l
s,
SeedsandFat
sAssoci
ati
ons(
FOFSA)Tr
adesCl
auseswhi
chhav
e
beenagr
eedwi
tht
heFeder
ati
onofOi
l
s,SeedsandFat
sAssoci
ati
onsandI
nst
it
ute
Commodi
tyTr
adesCl
auseswhi
char
eusedf
ort
hei
nsur
anceofshi
pment
sofcocoa,
cof
fee,cot
ton,f
atsandoi
l
s,hi
desandski
ns,met
als,oi
lseeds,r
efi
nedsugar
,andt
ea
andhav
ebeenagr
eedwi
tht
heFeder
ati
onofCommodi
tyAssoci
ati
ons.

War
rant
iesandcondi
ti
ons
Apecul
i
ari
tyofmar
inei
nsur
ance,andi
nsur
ancel
awgener
all
y,i
stheuseoft
he
t
ermscondi
ti
onandwar
rant
y.I
nEngl
i
shl
aw,acondi
ti
ont
ypi
cal
l
ydescr
ibesapar
tof
t
hecont
ractt
hati
sfundament
alt
otheper
for
manceoft
hatcont
ract
,and,
ifbr
eached,
t
henon-
breachi
ngpar
tyi
sent
it
lednotonl
ytocl
aim damagesbutt
oter
minat
ethe
cont
ractont
hebasi
sthati
thasbeenr
epudi
atedbyt
hepar
tyi
nbr
each.
Bycont
rast
,awar
rant
yisnotf
undament
alt
otheper
for
manceoft
hecont
ract
andbr
eachofawar
rant
y,whi
l
egi
vi
ngr
iset
oacl
aimf
ordamages,
doesnotent
it
let
he
non-
breachi
ngpar
tyt
oter
minat
ethecont
ract
.Themeani
ngoft
heset
ermsi
srev
ersed
i
ninsur
ancel
aw.I
ndeed,awar
rant
yifnotst
ri
ctl
ycompl
i
edwi
thwi
l
laut
omat
ical
l
y
di
schar
get
hei
nsur
erf
rom f
urt
herl
i
abi
l
ityundert
hecont
ractofi
nsur
ance.Theassur
ed
hasnodef
enset
ohi
sbr
each,
unl
esshecanpr
ovet
hatt
hei
nsur
er,
byhi
sconduct
,has
wai
vedhi
sri
ghtt
oinv
oket
hebr
each,
possi
bil
i
typr
ovi
dedi
nsect
ion34(
3)oft
heMar
ine
I
nsur
anceAct1906(
MIA)
;(sec36(
3)I
ndi
anl
aw)
.Fur
ther
mor
e,i
ntheabsenceof
expr
esswar
rant
iest
heMI
Awi
l
limpl
ythem,not
abl
yawar
rant
ytopr
ovi
deaseawor
thy
v
essel
att
hecommencementoft
hev
oyagei
nav
oyagepol
i
cy(
sect
ion39(
1);
(sec41(
1)
I
ndi
anl
aw)
.andawar
rant
yofl
egal
i
tyoft
hei
nsur
edv
oyage(
sect
ion41)
;(sec43
I
ndi
anl
aw)
.

Sal
vageandpr
izes
Thet
erm"
sal
vage"r
efer
stot
hepr
act
iceofr
ender
ingai
dtoav
esseli
ndi
str
ess.
Apar
tfr
om t
heconsi
der
ati
ont
hatt
heseai
str
adi
ti
onal
l
y"apl
aceofsaf
ety
",mor
eov
er
sai
l
orsar
ehonour
-boundt
orenderassi
stanceasr
equi
red,
iti
sobv
iousl
yint
hei
nter
est
ofunder
wri
ter
stoencour
ageassi
stancet
ovessel
sindangerofbei
ngwr
ecked.A
pol
i
cywi
l
lusual
l
yincl
udea "
sueandl
abour
"cl
ausewhi
chwi
l
lcov
ert
her
easonabl
e
cost
sincur
redbyashi
powneri
nhi
sav
oidi
ngagr
eat
erl
oss.
Atsea,ashi
pindi
str
esswi
l
lty
pical
l
yagr
eet
o"Ll
oyd'
sOpenFor
m"wi
thany
pot
ent
ialsal
vor
.TheLl
oyd'
sOpenFor
m(LOF)i
sthest
andar
dcont
ract
,al
thoughot
her
f
ormsexi
st.TheLl
oyd'
sOpenFor
misheaded"
Nocur
e— nopay
";t
hei
ntent
ionbei
ng
t
hati
ftheat
tempt
edsal
vagei
sunsuccessf
ul,noawar
dwi
l
lbemade.Howev
er,t
his
pr
inci
plehasbeenweakenedi
n
r
ecenty
ear
s,andawar
dsar
enow per
mit
tedi
ncaseswher
e,al
thought
heshi
pmi
ght
hav
esunk,
pol
l
uti
onhasbeenav
oidedormi
ti
gat
ed.
I
not
herci
rcumst
ancest
he"
sal
vor
"mayi
nvoket
heSCOPI
Cter
ms(
mostr
ecent
andcommonl
yusedr
endi
ti
oni
sSCOPI
C2000)i
ncont
rastt
otheLOFt
heset
erms
meant
hatt
hesal
vorwi
l
lbepai
dev
eni
fthesal
vageat
tempti
sunsuccessf
ul.The
amountt
hesal
vorr
ecei
ves i
sli
mit
edt
ocov
ert
hecost
soft
hesal
vageat
temptand
25% abov
eit
.Oneoft
hemai
nnegat
ivef
act
orsi
ninv
oki
ngSCOPI
C(ont
hesal
vor
's
behal
f)i
sift
hesal
vageat
tempti
ssuccessf
ult
heamountatwhi
cht
hesal
vorcancl
aim
underar
ti
cle13ofLOFi
sdi
scount
ed.
The Ll
oyd'
s Open For
m,once agr
eed,al
l
ows sal
vage at
tempt
sto begi
n
i
mmedi
atel
y.Theext
entofanyawar
disdet
ermi
ned l
ater
;al
thought
hest
andar
d
wor
dingr
efer
stot
heChai
rmanofLl
oyd'
sar
bit
rat
inganyawar
d,i
npr
act
icet
her
oleof
ar
bit
rat
ori
spassedt
ospeci
ali
stadmi
ral
tyQCs.Ashi
pcapt
uredi
nwari
sref
err
edt
oas
apr
ize,
andt
hecapt
orsent
it
ledt
opr
izemoney
.Agai
n,t
hisr
iski
scov
eredbyst
andar
d
pol
i
cies.
 THEMARI
NEI
NSURANCEACT,
1963

ARRANGEMENTOFSECTI
ONS
1.
Shor
tti
tl
eandcommencement
.
2.
Def
ini
ti
ons.
MARI
NEI
NSURANCE

3.
Marinei
nsur
ance
def
ined.
4.
Mi xedseaandl
and
risks.
I
NSURABLEI
NTEREST
5.
Lawfulmarine
advent
ure.

6.
Avoi
danceofwager
ingcont
ract
s.
7.
Insur
abl
eint
erestdef
ined.
8.
Wheni
nter
estmustat
tach.
9.
Def
easi
bleorcont
ingenti
nter
est
.
10.
Par
ti
ali
nter
est
.
11.
Rei
nsur
ance.
12.
Bot
tomr
y.
13.
Mast
er’
sandseamen’
swages.
14.
Adv
ancef
rei
ght
.
15.
Char
gesofi
nsur
ance.
16.
Quant
um ofi
nter
est
.
17.
Assi
gnmentofi
nter
est
.
I
NSURABLEVALUE
18.
Measur
eofi
nsur
abl
eval
ue.
DI
SCLOSUREANDREPRESENTATI
ONS
19.
Insur suber
ancei ri
maef
idei
.
20.
Discl
osur
ebyassur
ed.
21.
Discl
osur
ebyagentef
fect
ingi
nsur
ance.
22.
Repr
esent
ati
onspendi
ngnegot
iat
ionofcont
ract
.
23.
Whencont
racti
sdeemedt
obeconcl
uded.
 THEPOLI
CY
24.
Cont
ractmustbeembodi
edi
npol
i
cy.
25.
Whatpol
i
cymustspeci
fy.
26.
Signat
ureofi
nsur
er.
27.
Voy
ageandt
imepol
i
cies.
28.
Desi
gnat
ionandsubj
ect
-mat
ter
.
29.
Val
uedpol
i
cy.
30.
Unv
aluedpol
i
cy.
31.
Float
ingpol
i
cybyshi
porshi
ps.
32.
Const
ruct
ionoft
ermsi
npol
i
cy.
33.
Premi
um t
obear
ranged.
DOUBLEI
NSURANCE

34.
Doubl
einsur
ance.
WARRANTI
ES,
ETC.

35.
Nat
ureof
war
rant
y.

36.
Whenbr
eachofwar
rant
yexcused.
37.
Expr
esswar
rant
ies.
38.
War
rant
yofneut
ral
i
ty.
39.
Noi
mpl
i
edwar
rant
yofnat
ional
i
ty.
40.
War
rant
yofgoodsaf
ety
.
41.
War
rant
yofseawor
thi
nessofshi
p.
42.
Noi
mpl
i
edwar
rant
ythatgoodsar
eseawor
thy
.
43.
War
rant
yofl
egal
i
ty.
THEVOYAGE
44.
Impl
i
edcondi
ti
onast
ocommencementofr
isk.
45.
Alt
erat
ionofpor
tofdepar
tur
e.
46.
Sai
l
ingf
ordi
ff
erentdest
inat
ion.
47.
Changeofv
oyage.
48.
Dev
iat
ion.
49.
Sev
eral
por
tsofdi
schar
ge.
50.
Del
ayi
nvoy
age.
51.
Excusef
ordev
iat
ionordel
ay.
 ASSI
GNMENTOFPOLI
CY
52.
Whenandhowpol
i
cyi
sassi
gnabl
e.
53.
Assur
edwhohasnoi
nter
estcannotassi
gn.
THEPREMI
UM
54.
Whenpr
emi
um pay
abl
e.
LOSSANDABANDONMENT
55.
Incl
udedandexcl
udedl
osses.
56.
Par
ti
alandt
otal
loss.
57.
Act
ual
tot
all
oss.
58.
Missi
ngshi
p.
59.
Eff
ectoft
ranshi
pment
,et
c.
60.
Const
ruct
ivet
otal
lossdef
ined.
61.
Eff
ectofconst
ruct
ivet
otal
loss.
62.
Not
iceofabandonment
.
63.
Eff
ectofabandonment
.
PARTI
ALLOSSES(
INCLUDI
NGSALVAGEANDGENERALAVERAGEANDPARTI
CULAR
CHARGES)
64.
Par
ti
cul
arav
eragel
oss.
65.
Sal
vagechar
ges.
66.
Gener
alav
eragel
oss.
MEASUREOFI
NDEMNI
TY
67.
Ext
entofl
i
abi
l
ityofi
nsur
erf
orl
oss.
68.
Tot
all
oss.
69.
Par
ti
all
ossofshi
p.
70.
Par
ti
all
ossoff
rei
ght
.
71.
Par
ti
all
ossofgoods,
mer
chandi
se,
etc.
72.
Appor
ti
onmentofv
aluat
ion.
73.
Gener
alav
eragecont
ri
but
ionsandsal
vagechar
ges.
74.
Liabi
l
iti
est
othi
rdpar
ti
es.
75.
Gener
alpr
ovi
sionsast
omeasur
eofi
ndemni
ty.
76.
Par
ti
cul
arav
eragewar
rant
ies.
77.
Successi
vel
osses.
78.
Sui
ngandl
abour
ingcl
ause.
 RI
GHTSOFI
NSURERONPAYMENTS
79.
Rightofsubr
ogat
ion.
80.
Rightofcont
ri
but
ion.
81.
Eff
ectofunder
-
i
nsur
ance.RETURNOF
PREMI
UM
82.
Enf
orcementofr
etur
n.
83.
Ret
urnbyagr
eement
.
84.
Ret
urnf
orf
ail
ureofconsi
der
ati
on.
SUPPLEMENTAL
85.
Rat
if
icat
ionbyassur
ed.
86.
Impl
i
edobl
i
gat
ionv
ari
edbyagr
eementorusage.
87.
Reasonabl
eti
me,
etc.
,aquest
ionoff
act
.
88.
Cov
eri
ngnot
easev
idence.
89.
Powert
oappl
yActwi
thmodi
fi
cat
ions,
etc.
,i
ncer
tai
ncases.
90.
Cer
tai
npr
ovi
sionst
oov
err
ideTr
ansf
erofPr
oper
tyAct
,1882.
91.
Sav
ings.
92.
[Repeal
ed.
]

SCHEDULE.—FORM OFPOLI
CY.
 THEMARI
NEI
NSURANCEACT,
1963
ACTNO.11OF1963
18t
[ hApr
il
,1963.
]
AnActt
ocodi
fyt
hel
awr
elat
ingt
omar
inei
nsur
ance.

BEi
tenact
edbyPar
li
amenti
ntheFour
teent
hYearoft
heRepubl
i
cofI
ndi
aasf
oll
ows:
-
1.
Shor
tti
tl
eandcommencement 1)Thi
.—( sActmaybecal
l
edt
heMar
ineI
nsur
ance
Act
,1963.
2)I
( tshal
lcomei
ntof
orceonsuchdat
eas t
heCent
ral Gov
ernment may
, by
not
if
icat
ioni
ntheOf
fi
cial
Gazet
te,
appoi
nt.
2.
Def
ini
ti
ons.—I
nthi
sAct
,unl
esst
hecont
extot
her
wiser
equi
res,
—
(
a)“
cont
ractofmar
inei
nsur
ance”meansacont
ractofmar
inei
nsur
anceasdef
inedby
sect
ion3;
(
b)“
frei
ght
”incl
udest
hepr
ofi
tder
ivabl
ebyashi
p-ownerf
rom t
heempl
oymentofhi
s
shi
ptocar
ryhi
sowngoodsorot
hermov
abl
es,aswel
lasf
rei
ghtpay
abl
ebyat
hir
d
par
ty,
butdoes not
i
ncl
udepassagemoney
;
(
c)“
insur
abl
epr
oper
ty”meansanyshi
p,goodsorot
hermov
abl
eswhi
char
eexposed
t
omar
it
ime
per
il
s;
(
d)“
mar
ineadv
ent
ure”i
ncl
udesanyadv
ent
urewher
e—
(
i)anyi
nsur
abl
epr
oper
tyi
sexposedt
omar
it
imeper
il
s;
(
ii
)theear
ningsoracqui
sit
ionofanyf
rei
ght
,passagemoney
,commi
ssi
on,pr
ofi
tor
ot
herpecuni
arybenef
it
,ort
hesecur
it
yforanyadv
ances,l
oans,ordi
sbur
sement
sis
endanger
edbyt
he
exposur
eofi
nsur
abl
epr
oper
tyt
omar
it
imeper
il
s;
(
ii
i)anyl
i
abi
l
ityt
oat
hir
dpar
tymaybei
ncur
red byt
heownerof
,orot
herper
son
i
nter
est
ed i
norr
esponsi
blef
or,
insur
abl
epr
oper
tybyr
easonofmar
it
imeper
il
s;
(
e)“
mar
it
imeper
il
s”meanst
heper
il
sconsequenton,
ori
nci
dent
alt
o,t
henav
igat
ionof
t
hesea,t
hati
stosay
,per
il
soft
heseas,f
ir
e,warper
il
s,pi
rat
es,r
over
s, t
hiev
es,
capt
ures, sei
zur
es,r
est
rai
ntsand det
ainment
sofpr
incesand peopl
es,j
ett
isons,
bar
rat
ryandanyot
herper
il
swhi
char
eei
theroft
hel
i
keki
ndormaybedesi
gnat
edby
t
hepol
i
cy;
(
f)“
mov
abl
es”meansanymov
abl
etangi
blepr
oper
ty,
othert
hant
heshi
p,andi
ncl
udes
money
,val
uabl
esecur
it
iesandot
herdocument
s;
(
g)“
pol
i
cy”meansamar
inepol
i
cy;
(
h)“
shi
p”i
ncl
udesev
erydescr
ipt
ionofv
essel
usedi
nnav
igat
ion;
(
i)“
sui
t”i
ncl
udescount
er-
clai
m andset
-of
f.
3.Mar
inei
nsur
ancedef
ined.— A cont
ractofmar
inei
nsur
ancei
san agr
eement
wher
eby t
hei
nsur
erunder
takest
oindemni
fyt
heassur
ed,i
nthemannerandt
othe
ext
entt
her
ebyagr
eed,agai
nstmar
inel
osses,t
hati
stosay
,thel
ossesi
nci
dent
alt
o
mar
ineadv
ent
ure.
4.Mi
xedseaand l
andr
i 1)Acont
sks.—( ractofmar
inei
nsur
ancemay
,byi
tsexpr
ess
t
erms,
orbyusageoft
rade,
beex
tendedsoast
opr
otectt
heassur
edagai
nstl
osseson
i
nlandwat
ersoronanyl
andr
iskwhi
chmaybei
nci
dent
alt
oanyseav
oyage.
2)Wher
( eashi
pincour
seofbui
l
dingort
hel
aunchofashi
p,oranyadv
ent
ure
anal
ogoust
o amar
ine
adv
ent
ure,i
scov
eredbyapol
i
cyi
nthef
orm ofamar
inepol
i
cy,t
hepr
ovi
sionsoft
his
Act
,insof
aras
appl
i
cabl
e,shal
lappl
yther
eto,
butexceptasbyt
hissect
ion pr
ovi
ded,not
hing i
nthi
s
Actshal
lal
teror
af
fectanyr
uleofl
awappl
i
cabl
etoanycont
ractofi
nsur
anceot
hert
hanacont
ractof
mar
inei
nsur
anceasbyt
hisActdef
ined.
Expl
anat
ion.—“
Anadv
ent
ureanal
ogoust
oamar
ineadv
ent
ure”i
ncl
udesanadv
ent
ure
wher
eanyshi
p,goodsorot
hermov
abl
esar
eexposedt
oper
il
sinci
dent
alt
olocalor
i
nlandt
ransi
t.
5.Lawf
ulmar
ineadv
ent
ure.— Subj
ectt
othepr
ovi
sionsoft
hisAct
,ev
eryl
awf
ul
mar
ineadv
ent
ure
maybet
hesubj
ectofacont
ractofmar
inei
nsur
ance.
I
NSURABLEI
NTEREST
6.
Avoi
danceofwager
ingcont
ract
s.—
(
1)Ev
erycont
ractofmar
inei
nsur
ancebywayofwager
ingi
svoi
d.
(
2)Acont
ractofmar
inei
nsur
ancei
sdeemedt
obeawager
ingcont
ract
:—
(
a)wher
etheassur
edhasnotani
nsur
abl
eint
erestasdef
inedbyt
hisAct
,andt
he
cont
racti
sent
eredi
ntowi
thnoex
pect
ati
onofacqui
ri
ngsuchani
nter
est
;or
(
b)wher
ethepol
i
cyi
smade“
int
erestornoi
nter
est
”,or“
wit
houtf
urt
herpr
oofof
i
nter
estt
hant
he
pol
i
cyi
tsel
f,or“
wit
houtbenef
itofsal
vaget
othei
nsur
er”
,orsubj
ectt
oanyot
herl
i
ke
t
erm:
Prov
idedt
hat
,wher
ether
eisnopossi
bil
i
tyofsal
vage,
apol
i
cymaybeef
fect
ed
wi
thoutbenef
itofsal
vaget
othei
nsur
er.
7.
Insur
abl
eint
erestdef
i 1)Subj
ned.—( ectt
othepr
ovi
sionsoft
hisAct
,ev
eryper
son
hasani
nsur
abl
eint
erestwhoi
sint
erest
edi
namar
ineadv
ent
ure.
2)I
( npar
ti
cul
araper
soni
sint
erest
edi
namar
ineadv
ent
urewher
ehest
andsi
nany
l
egalorequi
tabl
erel
ati
ont
otheadv
ent
ureort
oanyi
nsur
abl
epr
oper
tyatr
iskt
her
ein,
i
nconsequenceofwhi
chhemaybenef
itbyt
hesaf
etyorduear
ri
valofi
nsur
abl
e
pr
oper
ty,ormay be pr
ejudi
cedbyi
tsl
oss,orbydamaget
her
eto,orbyt
hedet
ent
ion
t
her
eof
,ormayi
ncurl
i
abi
l
ityi
nrespectt
her
eof
.
8.Wheni
nter
estmustat
t 1)Theassur
ach.— ( edmustbei
nter
est
edi
nthesubj
ect
-
mat
teri
nsur
edatt
het
imeoft
hel
oss,t
houghheneednotbei
nter
est
edwhent
he
i
nsur
ancei
sef
fect
ed:
Pr
ovi
dedt
hat
,wher
ethesubj
ect
-mat
teri
sinsur
ed“
lostornotl
ost
”,t
heassur
edmay
r
ecov
eral
though
hemaynothav
eacqui
redhi
sint
erestunt
ilaf
tert
hel
oss,
unl
essatt
het
imeof
ef
fect
ingt
hecont
ractof
i
nsur
ancet
heassur
edwasawar
eoft
hel
oss,
andt
hei
nsur
erwasnot
.
2)Wher
( etheassur
edhasnoi
nter
estatt
het
imeoft
hel
oss,hecannotacqui
re
i
nter
estbyanyactorel
ect
ionaf
terhei
sawar
eoft
hel
oss.
9.Def
easi
bleorcont
ingenti
nter
est 1)Adef
.—( easi
blei
nter
esti
sinsur
abl
e,asal
soi
s
acont
ingenti
nter
est
.
2)I
( npar
ti
cul
ar,wher
ethebuy
erofgoodshasi
nsur
edt
hem,hehasani
nsur
abl
e
i
nter
est
,not
wit
hst
andi
ngt
hathemi
ght
,athi
sel
ect
ion,hav
erej
ect
edt
hegoods,or
hav
etr
eat
edt
hem asatt
hesel
l
er’
sri
sk,byr
easonoft
hel
att
er’
sdel
ayi
nmaki
ng
del
i
ver
yorot
her
wise.
10.
Par
ti
ali
nter
est
.—Apar
ti
ali
nter
estofanynat
urei
sinsur
abl
e.
11.
Rei
nsur 1)Thei
ance.—( nsur
erunderacont
ractofmar
inei
nsur
ancehasan
i
nsur
abl
eint
eresti
nhi
sri
sk,
andmayr
einsur
einr
espectofi
t.
2)Unl
( esst
hepol
i
cyot
her
wisepr
ovi
des,
theor
igi
nal
assur
edhasnor
ightori
nter
est
i
nrespectofsuchr
einsur
ance.
12.
Bot
tomr
y.—Thel
enderofmoneyonbot
t yorr
omr espondent
iahasani
nsur
abl
e
i
nter
esti
nrespectoft
hel
oan.
13.
Mast
er’
sandseamen’
swages.-Themast
eroranymemberoft
hecr
ewofashi
p
hasani
nsur
abl
eint
eresti
nrespectofhi
swages.
14.
Adv
ancef
rei
ght
.—I
nthecaseofadv
ancef
rei
ght
,theper
sonadv
anci
ngt
hef
rei
ght
hasani
nsur
abl
eint
erest
,insof
arassuchf
rei
ghti
snotr
epay
abl
eincaseofl
oss.
15.Char
gesofi
nsur
ance.— Theassur
edhasani
nsur
abl
eint
eresti
nthechar
gesof
anyi
nsur
ancewhi
chhemayef
fect
.
16.Quant
um ofi
nter
est 1)Wher
.— ( ethesubj
ect
-mat
teri
nsur
edi
smor
tgaged,t
he
mor
tgagorhasani
nsur
abl
eint
eresti
nthef
ullv
aluet
her
eof
,andt
hemor
tgageehasan
i
nsur
abl
eint
eresti
nrespectofanysum dueort
obecomedueundert
hemor
tgage.
(
2)Amor
tgagee,consi
gnee,orot
herper
sonhav
ingani
nter
esti
nthesubj
ect
-mat
ter
i
nsur
edmayi
nsur
eonbehal
fandf
ort
hebenef
itofot
herper
sonsi
nter
est
edaswel
las
f
orhi
sownbenef
it
.
(
3)Theownerofi
nsur
abl
epr
oper
tyhasani
nsur
abl
eint
eresti
nrespectoft
hef
ull
val
ue
t
her
eof
,not
wit
hst
andi
ngt
hatsomet
hir
dper
sonmayhav
eagr
eed,orbe l
i
abl
eto
i
ndemni
fyhi
mincaseofl
oss.
17.
Assi
gnmentofi
nter
est
.— Wher
etheassur
edassi
gnsorot
her
wisepar
tswi
thhi
s
i
nter
esti
nthesubj
ect
-mat
teri
nsur
ed,
hedoesnott
her
ebyt
ransf
ert
otheassi
gneehi
s
r
ight
s undert
he cont
ract ofi
nsur
ance,unl
ess t
her
e be an expr
ess ori
mpl
i
ed
agr
eementwi
tht
heassi
gneet
othatef
fect
.Butt
hepr
ovi
sionsoft
hissect
iondonot
af
fectt
ransmi
ssi
onofi
nter
estbyoper
ati
onofl
aw.
I
NSURABLEVALUE
18.Measur
eofi
nsur
abl
eval
ue.—Subj
ectt
oanyexpr
esspr
ovi
sionorv
aluat
ioni
nthe
pol
i
cy,
the
i
nsur
abl
eval
ueoft
hesubj
ect
-mat
teri
nsur
edmustbeascer
tai
nedasf
oll
ows:
—
(
1)I
ninsur
anceonshi
p,t
hei
nsur
abl
eval
uei
sthev
alue,att
hecommencementoft
he
r
isk,oft
heshi
p,i
ncl
udi
ngherout
fi
t,pr
ovi
sions,andst
oresf
ort
heof
fi
cer
sand cr
ew,
money adv
ancedf
orseamen’
swages,andot
herdi
sbur
sement
s(i
fany
)incur
red t
o
maket
heshi
pfi
tfort
hev
oyageoradv
ent
urecont
empl
atedbyt
hepol
i
cy,pl
ust
he
char
gesofi
nsur
anceupon t
hewhol
e.Thei
nsur
abl
eval
ue,
int
hecaseofast
eamshi
p,
i
ncl
udesal
so t
he machi
ner
y,boi
l
ers,andcoal
sandengi
nest
oresi
fownedbyt
he
assur
ed;i
nthecaseofashi
pdr
ivenbypowerot
hert
hanst
eam i
ncl
udesal
sot
he
machi
ner
yandf
uel
sandengi
nest
ores,i
fownedbyt
heassur
ed;andi
nthecaseofa
shi
pengagedi
naspeci
alt
rade,i
ncl
udesal
sot
heor
dinar
yfi
tt
ingsr
equi
sit
efort
hat
t
rade.
(
2)I
ninsur
anceonf
rei
ght
,whet
herpai
dinadv
anceorot
her
wise,
thei
nsur
abl
eval
uei
s
t
hegr
ossamountoft
hef
rei
ghtatt
her
iskoft
heassur
ed,pl
ust
hechar
gesof
i
nsur
ance.
(
3)I
ninsur
anceongoodsormer
chandi
se,
thei
nsur
abl
eval
uei
sthepr
imecostoft
he
pr
oper
tyi
nsur
ed,pl
ust
heexpensesofandi
nci
dent
alt
oshi
ppi
ngandt
hechar
gesof
i
nsur
anceupont
hewhol
e.
(
4)I
ninsur
anceonanyot
hersubj
ect
-mat
ter
,thei
nsur
abl
eval
uei
stheamountatt
he
r
iskoft
heassur
edwhent
hepol
i
cyat
taches,
plust
hechar
gesofi
nsur
ance.
DI
SCLOSUREANDREPRESENTATI
ONS
19.
Insur suber
ancei ri
maef
idei
.—Acont
ractofmar
inei
nsur
ancei
sacont
ractbased
upont
heut
mostgoodf
ait
h,andi
ftheut
mostgoodf
ait
hbenotobser
vedby ei
ther
par
ty,t
hecont
ractmaybeav
oidedbyt
heot
herpar
ty.
20.
Discl
osur
ebyassur 1)Subj
ed.—( ectt
othepr
ovi
sionsoft
hissect
ion,t
heassur
ed
mustdi
scl
oset
o
t
hei
nsur
er,bef
oret
hecont
racti
sconcl
uded,ev
erymat
eri
alci
rcumst
ancewhi
ch,i
s
knownt
otheassur
ed,andt
heassur
edi
sdeemedt
oknowev
eryci
rcumst
ancewhi
ch,
i
ntheor
dinar
ycour
seofbusi
ness,oughtt
obeknownt
ohi
m.I
ftheassur
edf
ail
sto
makesuchdi
scl
osur
e,t
hei
nsur
ermayav
oidt
hecont
ract
.
(
2)Ev
eryci
rcumst
ancei
smat
eri
alwhi
chwoul
dinf
luencet
hej
udgmentofapr
udent
i
nsur
eri
nfi
xi
ng
t
hepr
emi
um,
ordet
ermi
ningwhet
herhewi
l
ltaket
her
isk.
(
3)I
ntheabsenceofi
nqui
ry,
thef
oll
owi
ngci
rcumst
ancesneednotbedi
scl
osed,
namel
y:—
(
a)anyci
rcumst
ancewhi
chdi
mini
shest
her
isk;
(
b)anyci
rcumst
ancewhi
chi
sknownorpr
esumedt
obeknownt
othei
nsur
er.The
i
nsur
eri
spr
esumedt
oknowmat
ter
sofcommonnot
ori
etyorknowl
edge,andmat
ter
s
whi
chani
nsur
eri
ntheor
dinar
ycour
seofhi
sbusi
nessassuchoughtt
oknow;
(
c)anyci
rcumst
anceast
owhi
chi
nfor
mat
ioni
swai
vedbyt
hei
nsur
er;
(
d)anyci
rcumst
ancewhi
chi
tissuper
fl
uoust
odi
scl
osebyr
easonofanyexpr
essor
i
mpl
i
edwar
rant
y.
(
4)Whet
heranypar
ti
cul
arci
rcumst
ance,
whi
chi
snotdi
scl
osed,
bemat
eri
alornoti
s,i
n
eachcase,
aquest
ionoff
act
.
(
5)Thet
erm“
cir
cumst
ance”i
ncl
udesanycommuni
cat
ionmadet
o,ori
nfor
mat
ion
r
ecei
ved by
,theassur
ed.
21.
Discl
osur
e byagentef
fect
ing i
nsur
ance.— Subj
ectt
othe pr
ovi
sions oft
he
pr
ecedi
ng sect
ion ast
o ci
rcumst
anceswhi
ch need not be di
scl
osed,wher
e an
i
nsur
ancei
sef
fect
edf
or t
heassur
edbyanagent
,theagentmustdi
scl
oset
othe
i
nsur
er—
(
a)ev
erymat
eri
alci
rcumst
ancewhi
chi
sknownt
ohi
msel
f,and anagentt
oinsur
eis
deemedt
o knowev
eryci
rcumst
ancewhi
chi
ntheor
dinar
ycour
seofbusi
nessought
t
obeknownby
,ort
ohav
ebeencommuni
cat
edt
o,hi
m;and
(
b)ev
erymat
eri
alci
rcumst
ancewhi
cht
heassur
edi
sboundt
odi
scl
ose,unl
essi
t
comest
ohi
sknowl
edget
ool
atet
ocommuni
cat
eitt
otheagent
.
22.
Repr
esent
ati
ons pendi
ng negot
iat
ion of cont
ract 1) Ev
.— ( ery mat
eri
al
r
epr
esent
ati
onmadebyt
heassur
edorhi
sagentt
othei
nsur
erdur
ingt
henegot
iat
ions
f
ort
hecont
ract
,andbef
oret
hecont
racti
sconcl
uded,mustbet
rue.I
fitbeunt
ruet
he
i
nsur
ermayav
oidt
hecont
ract
.
(
2)A r
epr
esent
ati
oni
smat
eri
alwhi
chwoul
dinf
luencet
hej
udgmentofapr
udent
i
nsur
eri
nfi
xi
ngt
hepr
emi
um,
ordet
ermi
ningwhet
herhewi
l
ltaket
her
isk.
(
3)A r
epr
esent
ati
onmaybeei
therast
o amat
teroff
act
,orast
o amat
terof
expect
ati
onorbel
i
ef.
(
4)Ar
epr
esent
ati
onast
oamat
teroff
acti
str
ue,
ifi
tbesubst
ant
ial
l
ycor
rect
,thati
sto
say
,ift
hedi
ff
erencebet
weenwhati
srepr
esent
edandwhati
sact
ual
l
ycor
rectwoul
d
notbeconsi
der
edmat
eri
albyapr
udenti
nsur
er.
(
5)Ar
epr
esent
ati
onast
oamat
terofexpect
ati
onorbel
i
efi
str
uei
fitbemadei
ngoodf
ait
h.
(
6)Ar
epr
esent
ati
onmaybewi
thdr
awnorcor
rect
edbef
oret
hecont
racti
sconcl
uded.
(
7)Whet
herapar
ti
cul
arr
epr
esent
ati
onbemat
eri
alornot
,is,
ineachcase,
aquest
ionoff
act
.
23.
Whencont
racti
sdeemedt
obeconcl
uded.
—A cont
ractofmar
inei
nsur
ancei
s
deemed t
obe concl
udedwhent
hepr
oposaloft
heassur
edi
s accept
edbyt
he
i
nsur
er,
whet
hert
hepol
i
cybet
heni
ssuedornot
;andf
ort
hepur
poseofshowi
ngwhen
t
hepr
oposalwasaccept
ed,r
efer
encemaybemadet
othesl
i
p,cov
eri
ngnot
eorot
her
cust
omar
ymemor
andum oft
hecont
ract
,al
thoughi
tbeunst
amped.
THEPOLI
CY
24.Cont
ractmustbeembodi
edi
npol
icy
.-Acont
ractofmar
inei
nsur
anceshal
lnotbe
admi
tt
edi
nev
idenceunl
essi
tisembodi
edi
na mar
inepol
i
cyi
naccor
dance wi
tht
his
Act
.Thepol
i
cymaybeexecut
edandi
ssuedei
theratt
het
imewhent
hecont
racti
s
concl
uded,
oraf
ter
war
ds.
25.
Whatpol
icymustspeci
fy.—Amar
inepol
i
cymustspeci
fy—
(
1)t
henameoft
heassur
ed,
orofsomeper
sonwhoef
fect
sthei
nsur
anceonhi
sbehal
f;
(
2)t
hesubj
ect
-mat
teri
nsur
edandt
her
iski
nsur
edagai
nst
;
(
3)t
hev
oyage,
orper
iodoft
ime,
orbot
h,ast
hecasemaybe,
cov
eredbyt
hei
nsur
ance;
(
4)t
hesum orsumsi
nsur
ed;
(
5)t
henameornamesoft
hei
nsur
erori
nsur
ers.
26.Si
gnat
ureofi
nsur
er 1)Amar
.— ( inepol
i
cymustbesi
gnedbyoronbehal
foft
he
i
nsur
er.
2)Wher
( eapol
i
cyi
ssubscr
ibed byoronbehal
foft
wo ormor
einsur
ers,each
subscr
ipt
ion,
unl
esst
hecont
rar
ybeexpr
essed,
const
it
utesadi
sti
nctcont
ractwi
tht
he
assur
ed.
27.
Voy
ageandt
imepol
ici
es.
—(1)Wher
ethecont
racti
stoi
nsur
ethesubj
ect
-mat
terat
andf
rom,
orf
rom onepl
acet
oanot
herorot
her
s,t
hepol
i
cyi
scal
l
eda“
voy
agepol
i
cy”
,
and,
wher
ethecont
racti
stoi
nsur
ethesubj
ect
-mat
terf
oradef
ini
teper
iodoft
ime,
the
pol
i
cyi
scal
l
eda“
ti
mepol
i
cy”
.Acont
ractf
orbot
hvoy
ageandt
imemaybei
ncl
udedi
n
t
hesamepol
i
cy.
2)At
( imepol
i
cywhi
chi
smadef
oranyt
imeexceedi
ngt
wel
vemont
hsi
sinv
ali
d.
28.
Desi
gnat
ionandsubj
ect
-mat
ter 1)Thesubj
.—( ect
-mat
teri
nsur
edmustbe
desi
gnat
ed i
namar
inepol
i
cywi
thr
easonabl
ecer
tai
nty
.
(
2)Thenat
ureandext
entoft
hei
nter
estoft
heassur
edi
nthesubj
ect
-mat
teri
nsur
ed
neednotbespeci
fi
edi
nthepol
i
cy.
(
3)Wher
ethepol
i
cydesi
gnat
est
hesubj
ect
-mat
teri
nsur
edi
ngener
alt
erms,
itshal
lbe
const
ruedt
oappl
ytot
hei
nter
esti
ntendedbyt
heassur
edt
obecov
ered.
(
4)I
ntheappl
i
cat
ionoft
hissect
ionr
egar
dshal
lbehadt
oanyusager
egul
ati
ngt
he
desi
gnat
ionoft
hesubj
ect
-mat
teri
nsur
ed.
29.
Val
uedpol
icy 1)Apol
.—( i
cymaybeei
therv
aluedorunv
alued.
(
2)Av
aluedpol
i
cyi
sapol
i
cywhi
chspeci
fi
est
heagr
eedv
alueoft
hesubj
ect
-mat
teri
nsur
ed.
(
3)Subj
ectt
othepr
ovi
sionsoft
hisAct
,andi
ntheabsenceoff
raud,
thev
aluef
ixedby
t
hepol
i
cyi
s,asbet
weent
hei
nsur
erandassur
ed,concl
usi
veoft
hei
nsur
abl
eval
ueof
t
hesubj
ecti
ntendedt
obei
nsur
ed,
whet
hert
hel
ossbet
otal
orpar
ti
al.
(
4)Unl
esst
hepol
i
cyot
her
wisepr
ovi
des,
thev
aluef
ixedbyt
hepol
i
cyi
snotconcl
usi
ve
f
ort
hepur
poseofdet
ermi
ningwhet
hert
her
ehasbeenaconst
ruct
ivet
otal
loss.
30.
Unv
aluedpol
icy
.—Anunv
aluedpol
i
cyi
sapol
i
cywhi
chdoesnotspeci
fyt
hev
alue
oft
hesubj
ect
-mat
teri
nsur
ed,butsubj
ectt
othel
i
mitoft
hesum i
nsur
ed,l
eav
est
he
i
nsur
abl
eval
uet
obesubsequent
lyascer
tai
ned,
int
hemannerher
einbef
oreexpl
ained.
31.
Float
ingpol
icybyshi
porshi 1)Af
ps.—( loat
ingpol
i
cyi
sapol
i
cywhi
chdescr
ibes
t
hei
nsur
ancei
ngener
alt
erms,
andl
eav
est
henameornamesoft
heshi
porshi
psand
ot
herpar
ti
cul
arst
obedef
inedbysubsequentdecl
arat
ion.
(
2)Thesubsequentdecl
arat
ionordecl
arat
ionsmaybemadebyendor
sementont
he
pol
i
cy,
ori
not
hercust
omar
ymanner
.
(
3)Unl
esst
hepol
i
cyot
her
wisepr
ovi
des,t
hedecl
arat
ionsmustbemadei
ntheor
der
ofdi
spat
chorshi
pment
.Theymust
,int
hecaseofgoods,compr
iseal
lconsi
gnment
s
wi
thi
nthet
ermsoft
hepol
i
cy,andt
hev
alueoft
hegoodsorot
herpr
oper
tymustbe
honest
lyst
ated,
but
anomi
ssi
onorer
roneousdecl
arat
ionmayber
ect
if
ied ev
enaf
terl
ossorar
ri
val
,
pr
ovi
dedt
heomi
ssi
onordecl
arat
ionwasmadei
ngoodf
ait
h.
(
4)Unl
esst
hepol
i
cyot
her
wisepr
ovi
des,
wher
eadecl
arat
ionofv
aluei
snotmadeunt
il
af
ternot
iceofl
ossorar
ri
val
,thepol
i
cymustbet
reat
edasanunv
aluedpol
i
cyas
r
egar
dst
hesubj
ect
-mat
teroft
hatdecl
arat
ion.
32.
Const
ruct
ionoft
ermsi
npol
i
cy 1)Apol
.—( i
cymaybei
nthef
ormi
ntheSchedul
e.
2)Subj
( ectt
othepr
ovi
sionsoft
hisAct
,andunl
esst
hecont
extoft
hepol
i
cyot
her
wise
r
equi
res,
thet
ermsandexpr
essi
onsment
ionedi
ntheSchedul
eshal
lbeconst
rued as
hav
ingt
hescopeandmeani
ngassi
gnedt
othem i
ntheSchedul
e.
33.Pr
emi
um t
obear
r 1)Wher
anged.—( eani
nsur
ancei
sef
fect
edatapr
emi
um t
obe
ar
ranged,
andnoar
rangementi
smade,
areasonabl
epr
emi
um i
spay
abl
e.
2)Wher
( eani
nsur
ancei
sef
fect
edont
het
ermst
hatanaddi
ti
onalpr
emi
um i
stobe
ar
ranged i
nagi
venev
ent
,andt
hatev
enthappensbutnoar
rangementi
smade,
then
ar
easonabl
eaddi
ti
onal
premi
um i
spay
abl
e.
DOUBLEI
NSURANCE
34.
Doubl
eInsur 1)Wher
ance.—( etwoormor
epol
i
ciesar
eef
fect
edbyoronbehal
fof
t
heassur
edont
hesameadv
ent
ureandi
nter
estoranypar
tther
eof
,andt
hesums
i
nsur
edexceed t
hei
ndemni
tyal
l
owedbyt
hisAct
,theassur
edi
ssai
dtobeov
er-
i
nsur
edbydoubl
einsur
ance.
2)Wher
( etheassur
edi
sov
er-
insur
edbydoubl
einsur
ance—
(
a)t
heassur
ed,unl
esst
hepol
i
cyot
her
wisepr
ovi
des,maycl
aim pay
mentf
rom t
he
i
nsur
ersi
nsuchor
derashemayt
hinkf
it
,pr
ovi
dedt
hathei
snotent
it
ledt
orecei
veany
sum i
nexcessoft
hei
ndemni
tyal
l
owedbyt
hisAct
;
(
b)wher
ethepol
i
cyunderwhi
cht
heassur
edcl
aimsi
sav
aluedpol
i
cy,t
heassur
ed
mustgi
vecr
edi
tasagai
nstt
hev
aluat
ion,
foranysum r
ecei
vedbyhi
m underanyot
her
pol
i
cy,
wit
houtr
egar
dtot
heact
ual
val
ueoft
hesubj
ect
-mat
teri
nsur
ed;
(
c)wher
ethepol
i
cyunderwhi
cht
heassur
edcl
aimsi
sanunv
aluedpol
i
cy,hemust
gi
vecr
edi
t,asagai
nstt
hef
ulli
nsur
abl
eval
ue,
foranysum r
ecei
vedbyhi
m underany
ot
herpol
i
cy;
(
d)wher
etheassur
edr
ecei
vesanysum i
nexcessoft
hei
ndemni
tyal
l
owedbyt
hisAct
,
hei
sdeemedt
ohol
dsuchsum i
ntr
ustf
ort
hei
nsur
ers,accor
dingt
othei
rri
ghtof
cont
ri
but
ionamongt
hemsel
ves.
WARRANTI
ES,
ETC.
35.
Nat
ureofwar
rant
y. 1)Awar
—( rant
y,i
nthef
oll
owi
ngsect
ionsr
elat
ingt
owar
rant
ies,
meansapr
omi
ssor
ywar
rant
y,t
hati
stosayawar
rant
ybywhi
cht
heassur
ed
under
takest
hat
somepar
ti
cul
art
hingshal
lorshal
lnotbedone,
ort
hatsomecondi
ti
onshal
lbef
ulf
il
led,
orwher
ebyheaf
fi
rmsornegat
ivest
heexi
stenceofapar
ti
cul
arst
ateoff
act
s.
(
2)Awar
rant
ymaybeexpr
essori
mpl
i
ed.
(
3)Awar
rant
y,asabov
edef
ined,
isacondi
ti
onwhi
chmustbeexact
lycompl
i
ed wi
th,
whet
heri
tbemat
eri
alt
other
iskornot
.Ifi
tbenotsocompl
i
edwi
th,t
hen,subj
ectt
o
anyexpr
esspr
ovi
sioni
nthepol
i
cy,t
hei
nsur
eri
sdi
schar
gedf
rom l
i
abi
l
ityasf
rom t
he
dat
eoft
hebr
eachofwar
rant
y,butwi
thoutpr
ejudi
cet
oanyl
i
abi
l
ityi
ncur
redbyhi
m
bef
oret
hatdat
e.
36.
When br
each ofwar
rant 1)Non-
yexcused.— ( compl
i
ancewi
th awar
rant
yis
excusedwhen,byr
easonofachangeofci
rcumst
ances,t
hewar
rant
yceasest
obe
appl
i
cabl
etot
heci
rcumst
ancesoft
hecont
ract
,orwhencompl
i
ancewi
tht
hewar
rant
y
i
srender
edunl
awf
ulbyanysubsequentl
aw.
(
2)Wher
eawar
rant
yisbr
oken,t
heassur
edcannotav
ailhi
msel
foft
hedef
ence t
hat
t
hebr
eachhasbeenr
emedi
ed,
andt
hewar
rant
ycompl
i
edwi
thbef
orel
oss.
(
3)Abr
eachofwar
rant
ymaybewai
vedbyt
hei
nsur
er.
37.Expr
esswar
rant
i 1)Anexpr
es.—( esswar
rant
ymaybei
nanyf
orm ofwor
dsf
rom
whi
cht
hei
ntent
iont
owar
ranti
stobei
nfer
red.
(
2)Anexpr
esswar
rant
ymustbei
ncl
udedi
n,orwr
it
tenupon,t
hepol
i
cy,ormustbe
cont
ainedi
nsomedocumenti
ncor
por
atedbyr
efer
encei
ntot
hepol
i
cy.
(
3)Anexpr
esswar
rant
ydoesnotexcl
udei
mpl
i
edwar
rant
y,unl
essi
tbei
nconsi
stent
t
her
ewi
th.
38.War
rant
yofneut
ral
it
y. 1)Wher
—( einsur
abl
epr
oper
ty,whet
hershi
porgoods,i
s
expr
essl
ywar
rant
edneut
ral
,ther
eisani
mpl
i
edcondi
ti
ont
hatt
hepr
oper
tyshal
lhav
e
aneut
ralchar
act
eratt
hecommencementoft
her
isk,andt
hat
,sof
arast
heassur
ed
cancont
rolt
hemat
ter
,it
sneut
ral
char
act
ershal
lbepr
eser
veddur
ingt
her
isk.
2)Wher
( eashi
pisexpr
essl
ywar
rant
ed“
neut
ral
”,t
her
eisal
soani
mpl
i
ed condi
ti
on
t
hat
,sof
arast
he
assur
edcancont
rolt
hemat
ter
,sheshal
lbepr
oper
lydocument
ed,t
hati
stosay
,that
sheshal
lcar
ryt
henecessar
ypaper
stoest
abl
i
shherneut
ral
i
ty,andt
hatsheshal
lnot
f
alsi
fyorsuppr
essherpaper
s,oruse
si
mul
atedpaper
s.I
fanyl
ossoccur
sthr
oughbr
eachoft
hiscondi
ti
on,t
hei
nsur
ermay
av
oid t
hecont
ract
.
39.Noi
mpl
iedwar
rant
yofNat
ional
it
y.—Ther
eisnoi
mpl
i
edwar
rant
yast
o t
he
nat
ional
i
tyofashi
p,ort
hathernat
ional
i
tyshal
lnotbechangeddur
ingt
her
isk.
40.
War
rant
yofGoodSaf
ety
.—Wher
ethesubj
ect
-mat
teri
nsur
edi
s war
rant
ed“
wel
l
”
or“
ingoodsaf
ety
”onapar
ti
cul
arday
,iti
ssuf
fi
cienti
fitbesaf
eatanyt
imedur
ing
t
hatday
.
41.War
rant
yofSeawor
thi
nessofShi 1)I
p.— ( nav
oyagepol
i
cyt
her
eisani
mpl
i
ed
war
rant
ythatatt
hecommencementoft
hev
oyaget
heshi
pshal
lbeseawor
thyf
ort
he
pur
poseoft
hepar
ti
cul
aradv
ent
urei
nsur
ed.
(
2)Wher
ethepol
i
cyat
tacheswhi
l
etheshi
pisi
npor
t,t
her
eisal
soani
mpl
i
edwar
rant
y
t
hatsheshal
l
,
att
hecommencementoft
her
isk,ber
easonabl
yfi
ttoencount
ert
heor
dinar
yper
il
sof
t
he por
t.
(
3)Wher
ethepol
i
cyr
elat
est
oav
oyagewhi
chi
sper
for
medi
ndi
ff
erentst
ages,dur
ing
whi
cht
heshi
p
r
equi
resdi
ff
erentki
ndsoforf
urt
herpr
epar
ati
onorequi
pment
,ther
eisani
mpl
i
ed
war
rant
ythatatt
he
commencementofeachst
aget
heshi
pisseawor
thyi
nrespectofsuchpr
epar
ati
on
orequi
pmentf
ort
he
pur
posesoft
hatst
age.
(
4)Ashi
pisdeemedt
obeseawor
thywhenshei
sreasonabl
yfi
tinal
lrespect
sto
encount
ert
heor
dinar
yper
il
soft
heseasoft
headv
ent
urei
nsur
ed.
(
5)I
naTi
me-
pol
i
cyt
her
eisnoi
mpl
i
edwar
rant
ythatt
heshi
pshal
lbeseawor
thyatany
st
ageoft
headv
ent
ure,
butwher
e,wi
tht
hepr
ivi
tyoft
heassur
ed,
theshi
pissentt
osea
i
n an unseawor
thy st
ate,t
he i
nsur
eri
s notl
i
abl
eforany l
oss at
tri
but
abl
eto
unseawor
thi
ness.
42.
Noi
mpl
iedwar
rant
ythatgoodsar
eseawor
thy 1)I
.—( napol
i
cyongoodsorot
her
mov
eabl
ether
eisnoi
mpl
i
edwar
rant
ythatt
hegoodsormov
abl
esar
eseawor
thy
.
2)I
( nav
oyagepol
i
cyongoodsorot
hermov
abl
est
her
eisani
mpl
i
edwar
rant
ythatat
t
hecommencementoft
hev
oyaget
heshi
pisnotonl
yseawor
thyasashi
p,butal
so
t
hatshei
sreasonabl
yfi
ttocar
ryt
hegoodsorot
hermov
abl
est
othedest
inat
ion
cont
empl
atedbyt
hepol
i
cy.
43.War
rant
yofl
egal
it
y.—Ther
eisani
mpl
i
edwar
rant
ythatt
headv
ent
urei
nsur
edi
sa
l
awf
ulone,
andt
hat
,sof
arast
heassur
edcan cont
rolt
hemat
ter
,the adv
ent
ureshal
l
becar
ri
edouti
nal
awf
ulmanner
.
THEVOYAGE
44.I
mpl
iedcondi
ti
onast
ocommencementofr
i 1)Wher
sk.—( ethesubj
ect
-mat
teri
s
i
nsur
edbya
v
oyagepol
i
cy“
atandf
rom”or“
from”apar
ti
cul
arpl
ace,
iti
snotnecessar
ythatt
he
shi
pshoul
dbeatt
hat
pl
acewhent
hecont
racti
sconcl
uded,
butt
her
eisani
mpl
i
edcondi
ti
ont
hatt
he
adv
ent
ureshal
lbe
commencedwi
thi
nar
easonabl
eti
me,
andt
hati
ftheadv
ent
urebenotsocommenced
t
hei
nsur
ermay
av
oidt
hecont
ract
.
2)Thei
( mpl
i
edcondi
ti
onmaybenegat
ivedbyshowi
ngt
hatt
hedel
aywascausedby
ci
rcumst
ancesknownt
othei
nsur
erbef
oret
hecont
ractwasconcl
uded,
orbyshowi
ng
t
hathewai
vedt
hecondi
ti
on.
45.Al
ter
ati
onofpor
tofdepar
tur
e.—Wher
ethepl
aceofdepar
tur
eisspeci
fi
edbyt
he
pol
i
cy,andt
heshi
pinst
eadofsai
l
ingf
rom t
hatpl
acesai
l
sfr
om anyot
herpl
ace,t
he
r
iskdoesnotat
tach.
46.
Sai
li
ngf
ordi
ff
erentdest
inat
ion.—Wher
ethedest
inat
ioni
sspeci
fi
edi
nthepol
i
cy,
andt
heshi
p,i
nst
eadofsai
l
ingf
ort
hatdest
inat
ion,
sai
l
sforanyot
herdest
inat
ion,t
he
r
iskdoesnotat
tach.
47.
Change ofv
oy 1)Wher
age.— ( e,af
tert
he commencementoft
he r
isk,t
he
dest
inat
ionoft
heshi
pisv
olunt
ari
l
ychanged f
rom t
hedest
inat
ioncont
empl
atedby
t
hepol
i
cy,
ther
eissai
dtobeachangeofv
oyage.
2)Unl
( esst
hepol
i
cyot
her
wisepr
ovi
des,
wher
ether
eisachangeofv
oyage,
thei
nsur
er
i
sdi
schar
ged
f
rom l
i
abi
l
ityasf
rom t
het
imeofchange,t
hati
stosay
,asf
rom t
het
imewhent
he
det
ermi
nat
iont
ochangei
tismani
fest
ed;andi
tisi
mmat
eri
alt
hatt
heshi
pmaynoti
n
f
acthav
elef
tthecour
seofv
oyagecont
empl
atedbyt
hepol
i
cywhent
hel
ossoccur
s.
48.Dev
iat
i 1)Wher
on.— ( eashi
p,wi
thoutl
awf
ulexcused,dev
iat
esf
rom t
hev
oyage
cont
empl
atedbyt
hepol
i
cy,
thei
nsur
edi
sdi
schar
gedf
rom l
i
abi
l
ityasf
rom t
het
imeof
dev
iat
ion,andi
tisi
mmat
eri
alt
hatt
heshi
pmayhav
eregai
nedherr
out
ebef
oreany
l
oss occur
s.
(
2)Ther
eisadev
iat
ionf
rom t
hev
oyagecont
empl
atedbyt
hepol
i
cy—
(
a)wher
ethecour
seoft
hev
oyagei
sspeci
fi
cal
l
ydesi
gnat
edbyt
hepol
i
cy,andt
hat
cour
sei
sdepar
tedf
rom;
or
(
b)wher
ethecour
seoft
hev
oyagei
snotspeci
fi
cal
l
ydesi
gnat
edbyt
hepol
i
cy,butt
he
usualandcust
omar
ycour
sei
sdepar
tedf
rom.
(
3)Thei
ntent
iont
odev
iat
eisi
mmat
eri
al;
ther
emustbeadev
iat
ioni
nfactt
odi
schar
ge
t
hei
nsur
erf
rom hi
sli
abi
l
ityundert
hecont
ract
.
49.
Sev
eralpor
tsofdi
schar
ge.
—(1)Wher
esev
eralpor
tsofdi
schar
gear
especi
fi
edby
t
hepol
i
cy,
theshi
pmaypr
oceedt
oal
loranyoft
hem,
but
,int
heabsenceofanyusage
orsuf
fi
cientcauset
othecont
rar
y,shemustpr
oceedt
othem,
orsuchoft
hem asshe
goest
o,i
ntheor
derdesi
gnat
edbyt
hepol
i
cy.I
fshedoesnot
,ther
eisadev
iat
ion.
2)Wher
( ethepol
i
cyi
sto“
por
tsofdi
schar
ge”
,wi
thi
nagi
venar
ea,
whi
char
enotnamed,
t
heshi
pmust
,int
heabsenceofanyusageorsuf
fi
cientcauset
othecont
rar
y,pr
oceed
t
othem,orsuchoft
hem asshegoest
o,i
nthei
rgeogr
aphi
calor
der
.Ifshedoesnot
,
t
her
eisadev
iat
ion.
50.Del
ayi
nvoy
age.—I
nthecaseofav
oyagepol
i
cy,t
headv
ent
urei
nsur
edmustbe
pr
osecut
edt
hroughouti
tscour
sewi
thr
easonabl
edi
spat
ch,and,i
fwi
thoutl
awf
ul
excusei
tisnotsopr
osecut
ed,
thei
nsur
eri
sdi
schar
gedf
rom l
i
abi
l
ityasf
rom t
het
ime
whent
hedel
aybecameunr
easonabl
e.
51.Excusef
ordev
iat
ionordel
ay 1)Dev
.— ( iat
ionordel
ayi
npr
osecut
ingt
hev
oyage
cont
empl
ated
byt
hepol
i
cyi
sexcused—
(
a)wher
eaut
hor
isedbyanyspeci
alt
ermi
nthepol
i
cy;
or
(
b)wher
ecausedbyci
rcumst
ancesbey
ondt
hecont
rol
oft
hemast
erandhi
sempl
oyer
;or
(
c)wher
ereasonabl
ynecessar
yinor
dert
ocompl
ywi
thanexpr
essori
mpl
i
edwar
rant
y;or
(
d)wher
ereasonabl
ynecessar
yfort
heoft
heshi
porsubj
ect
-mat
teri
nsur
ed;
or
(
e)f
ort
hepur
poseofsav
inghumanl
i
feorai
dingashi
pindi
str
esswher
ehumanl
i
fe
maybe i
n
danger
;or
(
f)wher
ereasonabl
ynecessar
yfort
hepur
poseofobt
aini
ngmedi
cal
orsur
gical
aidf
or
anyper
sononboar
dtheshi
p;or
(
g)wher
ecausedbyt
hebar
rat
rousconductoft
hemast
erorcr
ew,
ifbar
rat
rybeoneof
t
heper
il
sinsur
edagai
nst
.
2)Whent
( hecauseexcusi
ngt
hedev
iat
ionordel
ayceasest
ooper
ate,t
heshi
pmust
r
esumehercour
se,
andpr
osecut
eherv
oyagewi
thr
easonabl
edi
spat
ch.
ASSI
GNMENT OFPOLI
CY
52.Whenandhow pol
icyi
sassi
gnabl 1)Amar
e.— ( inepol
i
cymaybet
ransf
err
edby
assi
gnmentunl
essi
tcont
ainst
ermsexpr
essl
ypr
ohi
bit
ingassi
gnment
.Itmay be
assi
gnedei
therbef
oreoraf
terl
oss.
(
2)Wher
eamar
inepol
i
cyhasbeenassi
gnedsoast
opasst
hebenef
ici
ali
nter
esti
n
suchpol
i
cy,
theassi
gneeoft
hepol
i
cyi
sent
it
ledt
osuet
her
eoni
nhi
sownname;and
t
he def
endanti
sent
it
ledt
omakeanydef
encear
isi
ngoutoft
hecont
ractwhi
chhe
woul
dhav
e beenent
it
ledt
omakei
fthesui
thadbeenbr
oughti
nthenameoft
he
per
sonbyoronbehal
fofwhom t
hepol
i
cywasef
fect
ed.
(
3)Amar
inepol
i
cymaybeassi
gnedbyendor
sementt
her
eonori
not
hercust
omar
ymanner
.
53.
Assur
edwhohasnoi
nter
estcannotassi
gn.
—Wher
etheassur
edhaspar
tedwi
th
orl
osthi
sint
eresti
nthesubj
ect
-mat
teri
nsur
ed,andhasnot
,bef
oreoratt
het
imeof
so doi
ng expr
essl
y ori
mpl
i
edl
y agr
eed t
o assi
gn t
he pol
i
cy,any subsequent
assi
gnmentoft
hepol
i
cyi
sinoper
ati
ve:
Pr
ovi
dedt
hatnot
hingi
nthi
ssect
ionaf
fect
stheassi
gnmentofapol
i
cyaf
terl
oss.
THEPREMI
UM
54.
Whenpr
emi
um pay
abl
e.—Unl
essot
her
wiseagr
eed,t
hedut
yoft
heassur
edorhi
s
agentt
opayt
hepr
emi
um,
andt
hedut
yoft
hei
nsur
ert
oissuet
hepol
i
cyt
otheassur
ed
orhi
sagent
,ar
econcur
rentcondi
ti
ons,
andt
hei
nsur
eri
snotboundt
oissuet
hepol
i
cy
unt
ilpay
mentort
enderoft
hepr
emi
um.
LOSSANDABANDONMENT
55.
Incl
udedandexcl
udedl
osses.
—(1)Subj
ectt
othepr
ovi
sionsoft
hisAct
,and
unl
esst
hepol
i
cyot
her
wisepr
ovi
des,t
hei
nsur
eri
sli
abl
eforanyl
osspr
oxi
mat
ely
causedbyaper
ili
nsur
edagai
nst
,but
,subj
ectasaf
oresai
d,hei
snotl
i
abl
eforanyl
oss
whi
chi
snotpr
oxi
mat
elycausedbyaper
ili
nsur
edagai
nst
.
2)I
( npar
ti
cul
ar—
(
a)t
hei
nsur
eri
snotl
i
abl
eforanyl
ossat
tri
but
abl
etot
hewi
l
fulmi
sconductoft
he
assur
ed,
but
,unl
esst
hepol
i
cyot
her
wisepr
ovi
des,
hei
sli
abl
eforanyl
osspr
oxi
mat
ely
causedbya per
ili
nsur
edagai
nst
,ev
ent
hought
hel
oss woul
d nothav
e happened
butf
ort
hemi
sconductornegl
i
genceoft
hemast
erorcr
ew;
(
b)unl
esst
hepol
i
cyot
her
wisepr
ovi
des,t
hei
nsur
eronshi
porgoodsi
snotl
i
abl
efor
anyl
osspr
oxi
mat
elycausedbydel
ay,al
thought
hedel
aybecausedbyaper
ili
nsur
ed
agai
nst
;
(
c)unl
esst
hepol
i
cyot
her
wisepr
ovi
des,t
hei
nsur
eri
snotl
i
abl
eforor
dinar
ywearand
t
ear
,or
dinar
yleakageandbr
eakage,i
nher
entv
iceornat
ureoft
hesubj
ect
-mat
ter
i
nsur
ed,orf
or anyl
osspr
oxi
mat
elycausedbyr
atsorv
ermi
n,orf
oranyi
njur
yto
machi
ner
ynotpr
oxi
mat
elycausedbymar
it
imeper
il
s.
56.
Par
ti
alandt
otall 1)Al
oss.—( ossmaybeei
thert
otal
orpar
ti
al.Anyl
ossot
hert
han
at
otal
loss,
asher
einaf
terdef
ined,
isapar
ti
all
oss.
(
2)At
otal
lossmaybeei
theranact
ual
tot
all
oss,
oraconst
ruct
ivet
otal
loss.
(
3)Unl
essadi
ff
erenti
ntent
ionappear
sfr
om t
het
ermsoft
hepol
i
cy,an i
nsur
ance
agai
nstt
otal
lossi
ncl
udesaconst
ruct
ive,
aswel
lasanact
ual
,tot
all
oss.
(
4)Wher
etheassur
edbr
ingsasui
tforat
otall
ossandt
heev
idencepr
ovesonl
ya
par
ti
all
oss,
hemay
,unl
esst
hepol
i
cyot
her
wisepr
ovi
des,
recov
erf
orapar
ti
all
oss.
(
5)Wher
egoodsr
eacht
hei
rdest
inat
ioni
nspeci
e,butbyr
easonofobl
i
ter
ati
onof
mar
ks,orot
her
wise,t
heyar
eincapabl
eofi
dent
if
icat
ion,t
hel
oss,i
fany
,ispar
ti
aland
nott
otal
.
57.
Act
ualt
otall 1)Wher
oss.— ( ethesubj
ect
-mat
teri
nsur
edi
sdest
roy
ed,orso
damagedas t
oceaset
obeat
hingoft
heki
ndi
nsur
ed,orwher
etheassur
ed i
s
i
rr
etr
iev
abl
ydepr
ivedt
her
eof
,ther
eisanact
ual
tot
all
oss.
2)I
( nthecaseofanact
ual
tot
all
ossnonot
iceofabandonmentneedbegi
ven.
58.Mi
ssi
ngshi
p.— Wher
etheshi
pconcer
nedi
ntheadv
ent
urei
smi
ssi
ng,and af
ter
t
he l
apseofar
easonabl
eti
menonewsofherhasbeenr
ecei
ved,anact
ualt
otall
oss
maybepr
esumed.
59.Ef
fectoft
ranshi
pment
,et
c.—Wher
e,byaper
ili
nsur
edagai
nst
,thev
oyage i
s
i
nter
rupt
edati
nter
medi
atepor
torpl
ace,
undersuchci
rcumst
ancesas,
apar
tfr
om any
speci
alst
ipul
ati
oni
nthecont
ractofaf
rei
ght
ment
,toj
ust
if
ythemast
eri
nlandi
ngand
r
eshi
ppi
ngt
hegoodsorot
hermov
abl
es,
ori
ntr
anshi
ppi
ngt
hem,
andsendi
ngt
hem on
t
othei
rdest
inat
ion, t
hel
i
abi
l
ityoft
hei
nsur
ercont
inues,not
wit
hst
andi
ngt
hel
andi
ng
ort
ranshi
pment
.
60.Const
ruct
ivet
otall
ossdef
ined.
—(1)Subj
ectt
oanyexpr
esspr
ovi
sion i
n t
he
pol
i
cy,
ther
eisaconst
ruct
ivet
otall
osswher
ethesubj
ect
-mat
teri
nsur
edi
sreasonabl
y
abandonedonaccountofi
tsact
ualt
otall
ossappear
ingt
obeunav
oidabl
e,orbecause
i
tcoul
dnotbe pr
eser
vedf
rom act
ualt
otall
osswi
thoutan expendi
tur
ewhi
ch woul
d
exceedi
tsv
aluewhent
heexpendi
tur
ehadbeeni
ncur
red.
2)I
( npar
ti
cul
ar,
ther
eisaconst
ruct
ivet
otal
loss—
(
i)wher
etheassur
edi
sdepr
ivedoft
hepossessi
onofhi
sshi
porgoodsbyaper
il
i
nsur
edagai
nst
,and
(
a)i
tisunl
i
kel
ythathecanr
ecov
ert
heshi
porgoods,
ast
hecasemaybe,
or
(
b)t
hecostofr
ecov
eri
ngt
heshi
porgoods,ast
hecasemaybe,woul
dexceedt
hei
r
v
aluewhenr
ecov
ered;
or
(
ii
)int
hecaseofdamaget
oashi
p,wher
eshei
ssodamagedbyaper
ili
nsur
edagai
nst
t
hat t
hecostofr
epai
ri
ngt
hedamagewoul
dexceedt
hev
alueoft
heshi
pwhen
r
epai
red.I
nest
imat
ingt
hecostofr
epai
rs,nodeduct
ioni
stobemadei
nrespectof
gener
alav
eragecont
ri
but
ionst
othoser
epai
rspay
abl
ebyot
heri
nter
est
s,butaccount
i
stobet
akenoft
he
expenseoff
utur
esal
vageoper
ati
onsandofanyf
utur
egener
alav
eragecont
ri
but
ions
t
owhi
cht
heshi
pwoul
dbel
i
abl
eifr
equi
red;
or
(
ii
i)I
nthecaseofdamaget
ogoods,wher
ethecostofr
epai
ri
ngt
hedamageand
f
orwar
ding t
hegoodst
othei
rdest
inat
ionwoul
dexceedt
hei
rval
ueonar
ri
val
.
61.
Eff
ectofconst
ruct
ivet
otall
oss.— Wher
ether
eisaconst
ruct
ivet
otall
osst
he
assur
edmayei
thert
reatt
hel
ossasapar
ti
all
oss,orabandont
hesubj
ect
-mat
ter
i
nsur
edt
othei
nsur
erandt
reatt
hel
ossasi
fitwer
eanact
ual
tot
all
oss.
62.Not
iceofabandonment 1)Subj
.—( ectt
othepr
ovi
sionsoft
hissect
ion,wher
ethe
assur
edel
ect
stoabandont
hesubj
ect
-mat
teri
nsur
edt
othei
nsur
er,hemustgi
ve
not
iceofabandonment
.Ifhef
ail
stodosot
hel
osscanonl
ybet
reat
edasapar
ti
all
oss.
(
2)Not
iceofabandonmentmaybegi
veni
nwr
it
ing,orbywor
dofmout
h,orpar
tl
yin
wr
it
ingandpar
tl
ybywor
dofmout
h,andmaybegi
veni
nanyt
ermswhi
chi
ndi
cat
ethe
i
ntent
ionoft
heassur
edt
oabandonhi
sinsur
edi
nter
esti
nthesubj
ect
-mat
teri
nsur
ed
uncondi
ti
onal
l
ytot
hei
nsur
er.
(
3)Not
iceofabandonmentmustbegi
venwi
thr
easonabl
edi
l
igenceaf
tert
her
ecei
pt
ofr
eli
abl
einf
ormat
ionoft
hel
oss,
butwher
ethei
nfor
mat
ioni
sofadoubt
fulchar
act
er
t
heassur
edi
sent
it
ledt
oar
easonabl
eti
met
omakeenqui
ry.
(
4)Wher
enot
iceofabandonmenti
spr
oper
lygi
ven,t
her
ight
soft
heassur
edar
enot
pr
ejudi
cedbyt
hef
actt
hatt
hei
nsur
err
efusest
oacceptt
heabandonment
.
(
5)Theaccept
anceofanabandonmentmaybeei
therexpr
essori
mpl
i
edf
rom t
he
conductof t
he i
nsur
er.The mer
e si
l
ence oft
he i
nsur
eraf
ternot
ice i
s notan
accept
ance.
(
6)Wher
enot
iceofabandonmenti
saccept
edt
heabandonmenti
sir
rev
ocabl
e.The
accept
anceoft
henot
iceconcl
usi
vel
yadmi
tsl
i
abi
l
ityf
ort
hel
ossandt
hesuf
fi
ciencyof
t
henot
ice.
(
7)Not
iceofabandonmenti
sunnecessar
ywher
eatt
he t
imewhen t
heassur
ed
r
ecei
vesi
nfor
mat
ionoft
hel
oss,t
her
ewoul
dbenopossi
bil
i
tyofbenef
itt
othei
nsur
er
i
fnot
icewer
egi
vent
ohi
m.
(
8)Not
iceofabandonmentmaybewai
vedbyt
hei
nsur
er.
(
9)Whenani
nsur
erhasr
einsur
edhi
sri
sk,
nonot
iceofabandonmentneedbegi
venbyhi
m.
63.
Eff
ectofabandonment 1)Wher
.— ( ether
eisav
ali
dabandonmentt
hei
nsur
eri
s
ent
it
ledt
otakeov
ert
hei
nter
estoft
heassur
edi
nwhat
evermayr
emai
noft
hesubj
ect
-
mat
teri
nsur
ed,
andal
lpr
opr
iet
aryr
ight
sinci
dent
alt
her
eto.
2)Upont
( heabandonmentofashi
p,t
hei
nsur
ert
her
eofi
sent
it
ledt
oanyf
rei
ghti
n
cour
seofbei
ngear
ned,
andwhi
chi
sear
nedbyhersubsequentt
othecasual
tycausi
ng
t
hel
oss,
lesst
he
expensesofear
ningi
tincur
redaf
tert
hecasual
ty;and,wher
etheshi
piscar
ryi
ngt
he
owner
’sgoods,t
hei
nsur
eri
sent
it
ledt
oar
easonabl
eremuner
ati
onf
ort
hecar
ri
ageof
t
hem subsequentt
othecasual
tycausi
ngt
hel
oss.
PARTI
ALLOSSES(
INCLUDI
NGSALVAGEANDGENERALAVERAGEANDPARTI
CULAR
CHARGES)
64.
Par
ti
cul
arav
eragel 1)Apar
oss.— ( ti
cul
arav
eragel
ossi
sapar
ti
all
ossoft
he
subj
ect
-mat
teri
nsur
ed,causedbyaper
ili
nsur
edagai
nst
,andwhi
chi
snotagener
al
av
eragel
oss.
2)Expensesi
( ncur
redbyoronbehal
foft
heassur
edf
ort
hesaf
etyorpr
eser
vat
ionof
t
hesubj
ect
-mat
teri
nsur
ed,
othert
hangener
alav
erageandsal
vagechar
ges,
arecal
l
ed
par
ti
cul
archar
ges.Par
ti
cul
arl
ychar
gesar
enoti
ncl
udedi
npar
ti
cul
arav
erage.
65.
Sal
vagechar 1)Subj
ges.— ( ectt
oanyexpr
esspr
ovi
sioni
nthepol
i
cy,sal
vage
char
gesi
ncur
redi
npr
event
ingal
ossbyper
il
sinsur
edagai
nstmayber
ecov
eredasa
l
ossbyt
hoseper
il
s.
2)“
( Sal
vagechar
ges”meanst
hechar
gesr
ecov
erabl
eundermar
it
imel
awbyasal
vor
i
ndependent
lyofcont
ract
.Theydonoti
ncl
udet
heexpensesofser
vicesi
nthe nat
ure
ofsal
vager
ender
edbyt
heassur
ed
orhi
sagent
s,oranyper
sonempl
oyedf
orhi
rebyt
hem,f
ort
hepur
poseofav
ert
inga
per
ili
nsur
edagai
nst
.Suchexpenses,wher
epr
oper
lyi
ncur
red,mayber
ecov
eredas
par
ti
cul
archar
gesorasagener
alav
eragel
oss,accor
dingt
otheci
rcumst
ancesunder
whi
cht
heywer
eincur
red.
66.Gener
alav
eragel 1)Agener
oss.—( alav
eragel
ossi
sal
osscausedbyordi
rect
ly
consequent
ialonagener
alav
erageact
.Iti
ncl
udesagener
alav
erageexpendi
tur
eas
wel
lasagener
alav
eragesacr
if
ice.
(
2)Ther
eisagener
alav
erageactwher
eanyext
raor
dinar
ysacr
if
iceorexpendi
tur
eis
v
olunt
ari
l
yand r
easonabl
ymade ori
ncur
red i
nti
me ofper
ilf
ort
he pur
pose of
pr
eser
vingt
hepr
oper
tyi
mper
il
ledi
nthecommonadv
ent
ure.
(
3)Wher
ether
eisagener
alav
eragel
oss,
thepar
tyonwhom i
tfal
l
sisent
it
led,
subj
ect
t
othecondi
ti
onsi
mposedbymar
it
imel
aw,t
oar
ateabl
econt
ri
but
ionf
rom t
heot
her
par
ti
esi
nter
est
ed,
andsuchcont
ri
but
ioni
scal
l
edagener
alav
eragecont
ri
but
ion.
(
4)Subj
ectt
oanyexpr
esspr
ovi
sioni
nthepol
i
cy,wher
etheassur
edhasi
ncur
reda
gener
alav
erageorexpendi
tur
e,hemayr
ecov
erf
rom t
hei
nsur
eri
nrespect of t
he
pr
opor
ti
onof t
hel
osswhi
chf
all
suponhi
m;andi
nthecaseofagener
alav
erage
sacr
if
ice,hemayr
ecov
erf
rom t
hei
nsur
eri
nrespectoft
hewhol
elosswi
thouthav
ing
enf
orcedhi
sri
ghtofcont
ri
but
ionf
rom t
heot
herpar
ti
esl
i
abl
etocont
ri
but
e.
(
5)Subj
ectt
oanyexpr
esspr
ovi
sioni
nthepol
i
cy,wher
etheassur
edhaspai
d,ori
s
l
i
abl
etopay
,agener
alav
eragecont
ri
but
ioni
nrespectoft
hei
nter
esti
nsur
ed,hemay
r
ecov
ert
her
eforf
rom t
hei
nsur
er.
(
6)I
ntheabsenceofexpr
essst
ipul
ati
on,t
hei
nsur
eri
snotl
i
abl
eforanygener
al
av
eragel
oss orcont
ri
but
ionwher
ethel
osswasnoti
ncur
redf
ort
hepur
poseof
av
oidi
ng,
ori
nconnect
ionwi
tht
heav
oidanceofaper
ili
nsur
edagai
nst
.
(
7)Wher
eshi
p,f
rei
ght
,andcar
go,oranyt
wooft
hosei
nter
est
s,ar
eownedbyt
he
sameassur
ed,t
hel
i
abi
l
ityoft
hei
nsur
eri
n r
espect ofgener
alav
eragel
ossesor
cont
ri
but
ionsi
sto bedet
ermi
nedasi
fthosei
nter
est
swer
eownedbydi
ff
erent
per
sons.
MEASUREOFI
NDEMNI
TY
67.
Ext
entofl
iabi
li
tyofi
nsur
erf
orl 1)Thesum whi
oss.—( cht
heassur
edcanr
ecov
er
i
nrespectof
al
ossonapol
i
cybywhi
chhei
sinsur
ed,
int
hecaseofanunv
aluedpol
i
cyt
othef
ull
ext
entoft
hei
nsur
abl
eval
ue,or
,int
hecaseofav
aluedpol
i
cyt
othef
ullext
entoft
he
v
aluef
ixedbyt
hepol
i
cy,
iscal
l
edt
hemeasur
eofi
ndemni
ty.
2)Wher
( ether
eisal
ossr
ecov
erabl
eundert
hepol
i
cy,t
hei
nsur
er,oreachi
nsur
eri
f
t
her
ebemor
ethanone,i
sli
abl
eforsuchpr
opor
ti
onoft
hemeasur
eofi
ndemni
tyas
t
heamountofhi
ssubscr
ipt
ionbear
stot
hev
aluef
ixedbyt
hepol
i
cyi
nthecaseofa
v
aluedpol
i
cy,
ort
othei
nsur
abl
eval
uei
nthecaseofanunv
aluedpol
i
cy.
68.
Tot
all
oss.— Subj
ectt
othepr
ovi
sionsoft
hisAct
,andt
oanyexpr
esspr
ovi
sioni
n
t
hepol
i
cy,
wher
ether
eisat
otal
lossoft
hesubj
ect
-mat
teri
nsur
ed—
(
1)i
fthepol
i
cybeav
aluedpol
i
cy,
themeasur
eofi
ndemni
tyi
sthesum f
ixedbyt
hepol
i
cy;
(
2)i
fthepol
i
cybeanunv
aluedpol
i
cy,t
hemeasur
eofi
ndemni
tyi
sthei
nsur
abl
eval
ue
oft
hesubj
ect
-mat
teri
nsur
ed.
69.
Par
ti
all
ossofshi
p.—Wher
eashi
pisdamaged,
buti
snott
otal
l
ylost
,themeasur
e
ofi
ndemni
tysubj
ectt
oanyexpr
esspr
ovi
sioni
nthepol
i
cy,
isasf
oll
ows—
(
1)wher
etheshi
phasbeenr
epai
red,t
heassur
edi
sent
it
ledt
other
easonabl
ecostof
t
he r
epai
rs,l
esst
hecust
omar
ydeduct
ions,butnotexceedi
ngt
hesum i
nsur
edi
n
r
espectofany onecasual
ty;
(
2)wher
etheshi
phasbeenonl
ypar
ti
all
yrepai
red,t
heassur
edi
sent
it
led t
o t
he
r
easonabl
ecostofsuchr
epai
rs,
comput
edasabov
e,andal
sot
obei
ndemni
fi
edf
ort
he
r
easonabl
edepr
eci
ati
on,i
fany
,ar
isi
ngf
rom t
heunr
epai
reddamage,pr
ovi
dedt
hatt
he
aggr
egat
eamountshal
lnotexceedt
hecostofr
epai
ri
ngt
hewhol
edamage,
comput
ed
asabov
e;
(
3)wher
etheshi
phasnotbeenr
epai
red,andhasnotbeensol
dinherdamagedst
ate
dur
ing t
he r
isk,t
he assur
ed i
s ent
it
led t
o be i
ndemni
fi
ed f
ort
he r
easonabl
e
depr
eci
ati
onar
isi
ngf
rom t
heunr
epai
reddamage,butnotexceedi
ngt
her
easonabl
e
costofr
epai
ri
ngsuchdamage,
comput
edasabov
e;
(
4)wher
etheshi
phasnotbeenr
epai
red,andhasbeensol
dinherdamagedst
ate
dur
ingt
he r
isk,t
heassur
edi
sent
it
ledt
obei
ndemni
fi
edf
ort
her
easonabl
ecostof
r
epai
ri
ngt
hedamage,
comput
edasabov
e,butnotexceedi
ngt
hedepr
eci
ati
oni
nval
ue
asascer
tai
nedbyt
hesal
e.
70.
Par
ti
all
ossoff
rei
ght
.—Subj
ectt
oanyexpr
esspr
ovi
sioni
nthepol
i
cy,wher
ether
e
i
sapar
ti
all
ossoff
rei
ght
,themeasur
eofi
ndemni
tyi
ssuchpr
opor
ti
onoft
hesum f
ixed
byt
hepol
i
cyi
nthecaseofav
aluedpol
i
cyoroft
he i
nsur
abl
eval
uei
nthecaseofan
unv
alued pol
i
cy,ast
hepr
opor
ti
onoff
rei
ghtl
ostbyt
heassur
edbear
stot
hewhol
e
f
rei
ghtatt
her
iskoft
heassur
edundert
hepol
i
cy.
71.Par
ti
all
ossofgoods,mer
chandi
se,et
c.-Wher
ether
eisapar
ti
all
ossofgoods,
mer
chandi
se,orot
hermov
abl
e,t
hemeasur
eofi
ndemni
ty,subj
ectt
oanyexpr
ess
pr
ovi
sioni
nthepol
i
cy,
isasf
oll
ows:
-
(
1)wher
epar
toft
hegoods,
mer
chandi
seorot
hermov
abl
einsur
edbyav
alued pol
i
cy
i
stot
all
ylost
,themeasur
eofi
ndemni
tyi
ssuchpr
opor
ti
onoft
hesum f
ixedbyt
he
pol
i
cyast
hei
nsur
abl
eval
ueoft
hepar
tlostbear
stot
hei
nsur
abl
eval
ueoft
hewhol
e,
ascer
tai
nedasi
nthecaseofanunv
aluedpol
i
cy;
(
2)wher
epar
toft
hegoods,mer
chandi
seorot
hermov
abl
einsur
edbyanunv
alued
pol
i
cyi
stot
all
ylost
,themeasur
eofi
ndemni
tyi
sthei
nsur
abl
eval
ueoft
hepar
tlost
,
ascer
tai
nedasi
ncaseoft
otal
loss;
(
3)wher
ethewhol
eoranypar
toft
hegoodsormer
chandi
sei
nsur
ed hasbeen
del
i
ver
eddamagedati
tsdest
inat
ion,t
hemeasur
eofi
ndemni
tyi
ssuchpr
opor
ti
on of
t
hesum f
ixedbyt
hepol
i
cyi
nthecaseofav
aluedpol
i
cy,oroft
hei
nsur
abl
eval
uei
n
t
hecaseofan unv
alued pol
i
cy,ast
hedi
ff
erencebet
ween t
hegr
osssound and
damagedv
aluesatt
hepl
aceofar
ri
val
bear
stot
hegr
osssoundv
alue;
(
4)“
Grossv
alue”meanst
hewhol
esal
epr
ice,or
,ift
her
ebenosuch pr
ice, t
he
est
imat
ed v
alue,wi
th,i
n ei
thercase,f
rei
ght
,landi
ng char
ges,and dut
y pai
d
bef
orehand;pr
ovi
dedt
hat
,int
hecaseofgoodsormer
chandi
secust
omar
il
y sol
din
bond,t
hebondedpr
icei
sdeemedt
obet
hegr
ossv
alue.“
Grosspr
oceeds”meanst
he
act
ual
pri
ceobt
ainedatasal
ewher
eal
lchar
gesonsal
ear
epai
dbyt
hesel
l
ers.
72.Appor
ti
onmentofv
aluat
i 1)Wher
on.—( edi
ff
erentspeci
esofpr
oper
tyar
einsur
ed
underasi
ngl
e
v
aluat
ion,
thev
aluat
ionmustbeappor
ti
onedov
ert
hedi
ff
erentspeci
esi
npr
opor
ti
ont
o
t
hei
rrespect
ivei
nsur
abl
eval
ues,asi
nthecaseofan unv
aluedpol
i
cy.Thei
nsur
ed
v
alueof any par
tofaspeci
es i
ssuchpr
opor
ti
onoft
het
otali
nsur
edv
alueoft
he
sameast
hei
nsur
abl
e v
alueoft
hepar
tbear
stot
hei
nsur
abl
eval
ueoft
hewhol
e,
ascer
tai
nedi
nbot
hcasesaspr
ovi
dedbyt
hisAct
.
2)Wher
( eav
aluat
ionhast
obeappor
ti
oned,
andpar
ti
cul
arsoft
hepr
imecostofeach
separ
atespeci
es,
qual
i
ty,
ordescr
ipt
ionofgoodscannotbeascer
tai
ned,
thedi
vi
sionof
t
hev
aluat
ionmaybemadeov
ert
henetar
ri
vedsoundv
aluesoft
hedi
ff
erentspeci
es,
qual
i
ties,
ordescr
ipt
ionsofgoods.
73.Gener
alav
eragecont
ri
but
ionsandsal
vagechar
ges.
—(1)Subj
ectt
oanyexpr
ess
pr
ovi
sioni
nthepol
i
cy,
wher
etheassur
edhaspai
d,ori
sli
abl
efor
,anygener
alav
erage
cont
ri
but
ion,t
hemeasur
eofi
ndemni
tyi
sthef
ullamountofsuchcont
ri
but
ioni
fthe
subj
ect
-mat
terl
i
abl
etocont
ri
but
ioni
sinsur
edf
ori
tsf
ullcont
ri
but
oryv
alue;but
,if
suchsubj
ect
-mat
terbenoti
nsur
edf
ori
tsf
ullcont
ri
but
oryv
alue,
ori
fonl
ypar
tofi
tbe
i
nsur
ed,t
hei
ndemni
typay
abl
ebyt
hei
nsur
ermustber
educedi
npr
opor
ti
ont
othe
under
-i
nsur
ance,
andwher
ether
ehasbeenapar
ti
cul
arav
eragel
osswhi
chconst
it
utes
adeduct
ionf
rom t
hecont
ri
but
oryv
alue,
andf
orwhi
cht
hei
nsur
eri
sli
abl
e,t
hatamount
mustbededuct
edf
rom t
hei
nsur
edv
aluei
nor
dert
oascer
tai
nwhatt
hei
nsur
eri
sli
abl
e
t
ocont
ri
but
e.
2)Wher
( ethei
nsur
eri
sli
abl
eforsal
vagechar
gest
heext
entofhi
sli
abi
l
iti
esmustbe
det
ermi
nedont
hel
i
kepr
inci
ple.
74.
Liabi
li
ti
est
othi
rdpar
ti
es.— Wher
etheassur
edhasef
fect
edani
nsur
ancei
n
expr
esst
ermsagai
nstanyl
i
abi
l
ityt
oat
hir
dpar
ty,
themeasur
eofi
ndemni
ty,
subj
ectt
o
anyexpr
esspr
ovi
sioni
nthepol
i
cy,i
stheamountpai
dorpay
abl
ebyhi
mtosucht
hir
d
par
tyi
nrespectofsuchl
i
abi
l
ity
.
75.
Gener
alpr
ovi
sionsast
omeasur
eofi
ndemni
ty.
—(1)Wher
ether
ehasbeenal
oss
i
nrespectofanysubj
ect
-mat
ternotexpr
essl
ypr
ovi
dedf
ori
nthef
oregoi
ngpr
ovi
sions
oft
his Act
,themeasur
eofi
ndemni
tyshal
lbeascer
tai
nedasnear
lyasmaybe,i
n
accor
dancewi
tht
hosepr
ovi
sions,
insof
arasappl
i
cabl
etot
hepar
ti
cul
arcase.
2)Not
( hingi
nthepr
ovi
sionsoft
hisActr
elat
ingt
othemeasur
eofi
ndemni
tyshal
l
af
fectt
her
ulesr
elat
ingt
odoubl
einsur
ance,orpr
ohi
bitt
hei
nsur
erf
rom di
spr
ovi
ng
i
nter
estwhol
l
yor i
npar
t,orf
rom
showi
ngt
hatatt
het
imeoft
hel
osst
he whol
eor anypar
toft
he subj
ect
-mat
ter
i
nsur
edwasnotatr
iskundert
hepol
i
cy.
76.
Par
ti
cul
arav
eragewar
rant
ies.
—(1)Wher
ethesubj
ect
-mat
teri
nsur
edi
swar
rant
ed
f
reef
rom par
ti
cul
arav
erage,
theassur
edcannotr
ecov
erf
oral
ossofpar
t,ot
hert
hana
l
ossi
ncur
redbyagener
alav
eragesacr
if
ice,
unl
esst
hecont
ractcont
ainedi
nthepol
i
cy
beappor
ti
onabl
e;but
,ift
hecont
ractbeappor
ti
onabl
e,t
heassur
edmayr
ecov
erf
ora
t
otal
lossofanyappor
ti
onabl
epar
t.
(
2)Wher
ethesubj
ect
-mat
teri
nsur
edi
swar
rant
edf
reef
rom par
ti
cul
arav
erage,ei
ther
whol
l
y orunderacer
tai
nper
cent
age,t
hei
nsur
eri
snev
ert
hel
essl
i
abl
eforsal
vage
char
ges,andf
orpar
ti
cul
archar
gesandot
herexpensespr
oper
lyi
ncur
redpur
suantt
o
t
he pr
ovi
sions of t
hesui
ngandl
abour
ingcl
ausei
nor
dert
oav
ertal
ossi
nsur
ed
agai
nst
.
(
3)Unl
esst
hepol
i
cyot
her
wisepr
ovi
des,
wher
ethesubj
ect
-mat
teri
nsur
edi
swar
rant
ed
f
reef
rom par
ti
cul
arav
erage underaspeci
fi
edper
cent
age,agener
alav
eragel
oss
cannotbeaddedt
oapar
ti
cul
arav
eragel
osst
omakeupt
hespeci
fi
edper
cent
age.
(
4)Fort
hepur
poseofascer
tai
ningwhet
hert
hespeci
fi
edper
cent
agehasbeenr
eached,
r
egar
dshal
lbehadonl
ytot
heact
uall
osssuf
fer
edbyt
hesubj
ect
-mat
teri
nsur
ed.
Par
ti
cul
archar
gesandt
heexpensesofandi
nci
dent
alt
oascer
tai
ningandpr
ovi
ngt
he
l
ossmustbeexcl
uded.
77.Successi
vel 1)Unl
osses.— ( esst
hepol
i
cyot
her
wisepr
ovi
des,andsubj
ectt
othe
pr
ovi
sionsoft
hisAct
,thei
nsur
eri
sli
abl
eforsuccessi
vel
osses,ev
ent
hought
het
otal
amountofsuchl
ossesmayexceedt
hesum i
nsur
ed.
2)Wher
( e,undert
hesamepol
i
cy,apar
ti
all
oss,whi
chhasnotbeenr
epai
redor
ot
her
wise madegood,
i
sfol
l
owedbyat
otal
loss,
theassur
edcanonl
yrecov
eri
nrespectoft
het
otal
loss:
Pr
ovi
dedt
hatnot
hingi
nthi
s sect
ionshal
laf
fectt
hel
i
abi
l
ityoft
hei
nsur
erundert
he
sui
ng andl
abour
ingcl
ause.
78.Sui
ngandl
abour
ingcl
ause.
—(1)Wher
ethepol
i
cycont
ainsasui
ngandl
abour
ing
cl
ause,t
heengagementt
her
ebyent
eredi
ntoi
sdeemedt
obesuppl
ement
aryt
othe
cont
ractofi
nsur
ance,andt
heassur
edmayr
ecov
erf
rom t
hei
nsur
eranyexpenses
pr
oper
lyi
ncur
redpur
suantt
othecl
ause,not
wit
hst
andi
ngt
hatt
hei
nsur
ermayhav
e
pai
dforat
otall
oss,ort
hatt
hesubj
ect
-mat
termayhav
ebeenwar
rant
edf
reef
rom
par
ti
cul
arav
erage,
eit
herwhol
l
yorunderacer
tai
nper
cent
age.
(
2)Gener
alav
eragel
ossesandcont
ri
but
ionsandsal
vagechar
ges,asdef
inedbyt
his
Act
,ar
enotr
ecov
erabl
eundert
hesui
ngandl
abour
ingcl
ause.
(
3)Expensesi
ncur
redf
ort
hepur
poseofav
ert
ingordi
mini
shi
nganyl
ossnotcov
ered
byt
hepol
i
cyar
enotr
ecov
erabl
eundert
hesui
ngandl
abour
ingcl
ause.
(
4)I
tist
hedut
yoft
heassur
edandhi
sagent
s,i
nal
lcases,t
otakesuchmeasur
esas
mayber
easonabl
efort
hepur
poseofav
ert
ingormi
nimi
singal
oss.
RI
GHTSOFI
NSURERONPAYMENTS
79.
Rightofsubr
ogat
ion.
—(1)Wher
ethei
nsur
erpay
sforat
otall
oss,ei
theroft
he
whol
e,ori
nthecaseofgoodsofanyappor
ti
onabl
epar
t,oft
hesubj
ect
-mat
teri
nsur
ed,
het
her
euponbecomesent
it
ledt
otakeov
ert
hei
nter
estoft
heassur
edi
nwhat
ever
mayr
emai
noft
hesubj
ect
-mat
tersopai
dfor
,andhei
sther
ebysubr
ogat
edt
oal
lthe
r
ight
sandr
emedi
esoft
heassur
edi
nandi
nrespectoft
hatsubj
ect
-mat
terasf
rom t
he
t
imeoft
hecasual
tycausi
ngt
hel
oss.
2)Subj
( ectt
othef
oregoi
ngpr
ovi
sions,wher
ethei
nsur
erpay
sfora par
ti
all
oss,he
acqui
resnot
it
let
o
t
hesubj
ect
-mat
teri
nsur
ed,orsuchpar
tofi
tasmayr
emai
n,buthei
sther
eupon
subr
ogat
edt
oal
lri
ght
sandr
emedi
esoft
heassur
edi
nandi
nrespectoft
hesubj
ect
-
mat
teri
nsur
edasf
rom t
het
imeoft
hecasual
tycausi
ngt
hel
oss,i
nsof
arast
he
assur
edhasbeeni
ndemni
fi
ed,
accor
dingt
othi
sAct
,bysuchpay
mentf
ort
hel
oss.
80.Ri
ghtofcont
ri
but
i 1)Wher
on.—( etheassur
edi
sov
er-
insur
edbydoubl
einsur
ance,
eachi
nsur
eri
sbound,
asbet
weenhi
msel
fandt
heot
heri
nsur
ers,
tocont
ri
but
erat
eabl
y
t
othel
ossi
npr
opor
ti
ont
otheamountf
orwhi
chhei
sli
abl
eunderhi
scont
ract
.
2)I
( fanyi
nsur
erpay
smor
ethanhi
spr
opor
ti
onoft
hel
oss,
hei
sent
it
ledt
omai
ntai
na
sui
tforcont
ri
but
ionagai
nstt
heot
heri
nsur
ers,
andi
sent
it
ledt
othel
i
ker
emedi
esasa
sur
etywhohaspai
dmor
ethanhi
spr
opor
ti
onoft
hedebt
.
81.
Eff
ectofunder
-i
nsur
ance.—Wher
etheassur
edi
sinsur
edf
oranamountl
esst
han
t
hei
nsur
abl
eval
ue,or
,int
hecaseofav
aluedpol
i
cy,f
oranamountl
esst
han t
he
pol
i
cy v
aluat
ion,hei
sdeemedt
obehi
sowni
nsur
eri
nrespectoft
heuni
nsur
ed
bal
ance.
RETURNOFPREMI
UM
82.
Enf
orcementofr
etur
n.—Wher
ethepr
emi
um,
orapr
opor
ti
onat
epar
tther
eof
,is,
by
t
hisAct
,decl
aredt
ober
etur
nabl
e—
(
a)i
fal
readypai
d,i
tmayber
ecov
eredbyt
heassur
edf
rom t
hei
nsur
er,
and,
(
b)i
funpai
d,i
tmayber
etai
nedbyt
heassur
edorhi
sagent
.
83.
Ret
urnbyagr
eement
.— Wher
ethepol
i
cycont
ainsast
ipul
ati
onf
ort
her
etur
nof
t
hepr
emi
um,orapr
opor
ti
onat
epar
tther
eof
,ont
hehappeni
ngofacer
tai
nev
ent
,and
t
hatev
enthappens,
thepr
emi
um,
or,
ast
hecasemaybe,
thepr
opor
ti
onat
epar
tther
eof
,
i
sther
euponr
etur
nabl
etot
heassur
ed.
84.
Ret
urnf
orf
ail
ureofconsi
der
ati 1)Wher
on.—( etheconsi
der
ati
onf
ort
hepay
ment
oft
hepr
emi
um t
otal
l
yfai
l
s,andt
her
ehasbeennof
raudori
l
legal
i
tyont
hepar
toft
he
assur
ed orhi
sagent
s,t
hepr
emi
um i
sther
euponr
etur
nabl
etot
heassur
ed.
(
2)Wher
etheconsi
der
ati
onf
ort
hepay
mentoft
hepr
emi
um i
sappor
ti
onabl
eandt
her
e
i
sat
otalf
ail
ureofanyappor
ti
onabl
epar
toft
heconsi
der
ati
on,
apr
opor
ti
onat
epar
tof
t
hepr
emi
um i
s,undert
hel
i
kecondi
ti
ons,
ther
euponr
etur
nabl
etot
heassur
ed.
(
3)I
npar
ti
cul
ar:
—
(
a)wher
ethepol
i
cyi
svoi
d,ori
sav
oidedbyt
hei
nsur
erasf
rom t
hecommencementof
t
he r
isk,t
hepr
emi
um i
sret
urnabl
e,pr
ovi
dedt
her
ehasbeenno f
raudori
l
legal
i
tyon
t
hepar
toft
heassur
ed;
buti
fther
iski
snotappor
ti
onabl
e,andhasonceat
tached,
the
pr
emi
um i
snotr
etur
nabl
e;
(
b)wher
ethesubj
ect
-mat
teri
nsur
ed,orpar
tther
eof
,hasnev
erbeen i
nper
il
ledt
he
pr
emi
um,or
,as
t
hecasemaybe,
apr
opor
ti
onat
epar
tther
eof
,isr
etur
nabl
e:
Pr
ovi
dedt
hatwher
ethesubj
ect
-mat
terhasbeeni
nsur
ed“
lostornotl
ost
”,andhas
ar
ri
vedi
nsaf
etyatt
het
imewhent
hecont
racti
sconcl
uded,t
hepr
emi
um i
s not
r
etur
nabl
eunl
ess,atsucht
ime,
thei
nsur
erknewoft
hesaf
ear
ri
val
;
(
c)wher
etheassur
edhasnoi
nsur
abl
eint
erestt
hroughoutt
hecur
rencyoft
her
iskt
he
pr
emi
um i
s
r
etur
nabl
e,pr
ovi
dedt
hatt
her
uledoesnotappl
ytoapol
i
cyef
fect
edbywayofwager
ing;
(
d)wher
etheassur
edhasadef
easi
blei
nter
est
,whi
chi
ster
minat
eddur
ingt
he
cur
rencyoft
her
isk,
thepr
emi
um i
snotr
etur
nabl
e;
(
e)wher
etheassur
edhasov
er-
insur
edunderanunv
aluedpol
i
cy,
apr
opor
ti
onat
epar
t
oft
hepr
emi
um i
sret
urnabl
e;
(
f)subj
ectt
othef
oregoi
ngpr
ovi
sions,
wher
etheassur
edhasov
er-
insur
edbydoubl
e
i
nsur
ance,
apr
opor
ti
onat
epar
toft
hesev
eral
premi
umsi
sret
urnabl
e:
Pr
ovi
dedt
hat
,ift
hepol
i
ciesar
eef
fect
edatdi
ff
erentt
imes,
andanyear
li
erpol
i
cyhasat
anyt
imebor
net
heent
ir
eri
sk,
ori
facl
aim hasbeenpai
dont
hepol
i
cyi
nrespectoft
he
f
ullsum i
nsur
edt
her
eby
,nopr
emi
um i
sret
urnabl
einr
espectoft
hatpol
i
cy,andwhen
t
hedoubl
einsur
ancei
sef
fect
edknowi
ngl
ybyt
heassur
ednopr
emi
um i
sret
urnabl
e.
SUPPLEMENTAL
85.
Rat
if
icat
ionbyassur
ed.
—Wher
eacont
ractofmar
inei
nsur
ancei
singoodf
ait
h
ef
fect
edbyoneper
sononbehal
fofanot
her
,theper
sononwhosebehal
fiti
sef
fect
ed
mayr
ati
fyt
hecont
ractev
enaf
terhei
sawar
eofal
oss.
86.I
mpl
iedobl
igat
ionv
ari
edbyagr
eementorusage.
—(1)Wher
eanyr
ight
,dut
y,or
l
i
abi
l
itywoul
dar
iseunderacont
ractofmar
inei
nsur
ancebyi
mpl
i
cat
ionofl
aw,i
tmay
benegat
ivedorv
ari
edbyexpr
essagr
eement
,orbyusage,i
ftheusagebesuchast
o
bi
ndbot
hpar
ti
est
othecont
ract
.
2)Thepr
( ovi
sionsoft
hissect
ionext
endt
oanyr
ight
,dut
y,orl
i
abi
l
itydecl
aredbyt
his
Actwhi
chmaybel
awf
ull
ymodi
fi
edbyagr
eement
.
87.
Reasonabl
eti
me,et
c.,aquest
ionoff
act
.— Wher
ebyt
hisActanyr
efer
encei
s
madet
oreasonabl
eti
me,r
easonabl
epr
emi
um,orr
easonabl
edi
l
igence,t
he quest
ion
whati
sreasonabl
eisaquest
ionoff
act
.
88.
Cov
eri
ngnot
easev
idence.—Wher
ether
eisadul
yst
ampedpol
i
cy,
ref
erencemay
bemade,
asher
etof
ore,
tot
hesl
i
porcov
eri
ngnot
e,i
nanyl
egal
proceedi
ng.
89.Powert
o appl
yActwi
th modi
fi
cat
ions,et
c.,i
n cer
tai
n cases.
—The Cent
ral
Gov
ernmentmay
,bynot
if
icat
ioni
ntheOf
fi
cialGazet
te,di
rectt
hatt
hepr
ovi
sionsof
t
hisActshal
l
,int
hei
rappl
i
cat
iont
ocont
ract
sofmar
inei
nsur
ancer
elat
ingt
oanycl
ass
ofshi
ps excl
usi
vel
y used i
ninl
and nav
igat
ion,be subj
ectt
o such condi
ti
ons,
except
ionsandmodi
fi
cat
ionsasi
tmayspeci
fyi
nthenot
if
icat
ion.
90.
Cer
tai
npr
ovi
sionst
oov
err
ideTr
ansf
erofPr
oper
tyAct
,1882.
—Not
hingi
ncl
ause
e)ofsect
( ion6oft
heTr
ansf
erofPr
oper
tyAct
,1882(
4of1882)
,shal
laf
fectt
he
pr
ovi
sionsofsect
ions17,
52,
53and79.
91.
Sav
ings.—Ther
ulesofl
aw,
incl
udi
ngt
hel
awmer
chant
,whi
chappl
i
edt
ocont
ract
s
ofmar
inei
nsur
ancei
mmedi
atel
ybef
oret
hecommencementoft
hisAct
,sav
einsof
ar
ast
heyar
einconsi
stentwi
tht
heexpr
esspr
ovi
sionsoft
hisAct
,shal
lcont
inuet
oappl
y
t
ocont
ract
sofmar
inei
nsur
ance.
92.
[Repeal
s.]Rep.byt
heRepeal
i
ngandAmendi
ngAct
, 56of1978)
1974( ,s.2andt
he
Fi
rstSchedul
e(w.
e.f
.20-
12-
1974)
.
 SCHEDULEFORM
OFPOLI
CY
Seesect
( ion24)

BEI
TKNOWNTHAT……….
.….
…….
…..
aswel
lin…….
.……………own name as f
orandi
nthe
nameandnamesofal
landev
eryot
herper
sonorper
sonst
owhom t
hesamedot
h,
may
,or shal
l apper
tai
n, i
n par
t or i
n al
l dot
h make assur
ance
andcause andt
hem,
andev
eryoft
hem,
tobei
nsur
edl
ostornotl
ost
,
at
andf
rom uponanyki
ndofgoodsandmer
chandi
ses,andal
soupont
hebody
,tackl
e,
appar
el,or
dnance,muni
ti
on,ar
ti
ll
ery
,boatandot
herf
urni
tur
e,ofandi
nthegoodshi
p
or v
essel cal
l
ed t
he………………………….
wher
eof i
s mast
er f
or t
his pr
esent
v
oyage…………………orwhosoev
erel
se shal
lgo f
ormast
eri
nthe sai
d shi
p or by
what
soev
erot
hernameornamest
hesai
d
shi
p,ort
hemast
ert
her
eof
,isorshal
lbenamedorcal
l
ed;begi
nni
ngt
headv
ent
ure
upont
hesai
d
goodsandmer
chandi
sesf
rom t
hel
oadi
ngt
her
eofaboar
dthesai
dshi
p upon
t
hesai
dshi
p,
et
c…………………………andsoshal
lcont
inueandendur
e,dur
ingherabodet
her
e,upon
t
hesai
dshi
p
et
c Andf
urt
her
,unt
ilt
hesai
dshi
p,wi
thal
lheror
dnance,
tackl
e,appar
el,
etc.
,
andgoods
andmer
chandi
seswhat
soev
ershal
lbear
ri
vedat upont
hesai
dshi
p,et
c.,
unt
il
shehat
hmoor
edatanchort
went
y-f
ourhour
singoodsaf
ety
;andupont
hegoodsand
mer
chandi
ses,unt
ilt
he samebet
her
edi
schar
gedandsaf
elyl
anded.Andi
tshal
lbe
l
awf
ul f
ort
hesai
dshi
p,et
c.,
int
his v
oyaget
opr
oceedandsai
l
t
oandt
ouchandst
ayatanypor
tsorpl
aceswhat
soev
erwi
thoutpr
ejudi
ce t
othi
s
i
nsur
ance.Thesai
dshi
p,et
c.,goods andmer
chandi
ses,et
c.,f
orsomuchas
concer
nedt
heassur
edbyagr
eementbet
weent
heassur
edandassur
ersi
nthi
spol
i
cy,
ar
eandshal
lbe v
alued
at
…………….
Touchi
ngt
headv
ent
uresandper
il
swhi
chwet
heassur
ersar
econt
endedt
obear
,and
dot
akeuponusi
nthi
svoy
age;
theyar
eoft
heseas,
menofwar
,fi
re,enemi
es,pi
rat
es,
r
over
s,t
hiev
es,j
ett
isons,
let
terof mar
t and
count
ermar
t,sur
pri
sal
s,t
aki
ngsatsea,
arr
est
s,r
est
rai
nts,
anddet
ainment
sofal
lki
ngs,
pr
inces,
andpeopl
e,ofwhatnat
ion,
condi
ti
on,
orqual
i
tysoev
er,
bar
rat
ryoft
hemast
er
andmar
iner
s,andofal
l
ot
herper
il
s,l
osses,
andmi
sfor
tunest
hathav
eorshal
lcomet
othehur
t,det
ri
ment
,or
damageoft
hesai
dgoodsandmer
chandi
ses,
andshi
p,et
c.,
oranypar
tther
eof
.Andi
n
caseofany l
ossormi
sfor
tunei
tshal
lbel
awf
ult
otheassur
ed,t
hei
rfact
ors,
ser
vant
s and assi
gns,t
o sue,l
abour
,and t
rav
elf
or,i
n and aboutt
he def
ence,
saf
eguar
dsandr
ecov
ery oft
he sai
dgoods andmer
chandi
sesandshi
p,et
c.,orany
par
tther
eof
,wi
thoutpr
ejudi
cet
othi
sInsur
ance;t
o t
hechar
geswher
eofwe,t
he
assur
ers,
wil
lcont
ri
but
eeachoneaccor
dingt
other
ateandquant
it
yofhi
ssum her
ein
assur
ed.
Andi
tisespeci
all
ydecl
aredandagr
eedt
hatnoact
soft
hei
nsur
erori
nsur
edi
n
r
ecov
eri
ng,sav
ing,orpr
eser
vingt
hepr
oper
tyi
nsur
edshal
lbeconsi
der
edasawai
ver
,
oraccept
anceofabandonment
.Andso
we,t
heassur
ers,ar
econt
ended,anddoher
ebypr
omi
seandbi
ndour
sel
ves,eachone
f
orhi
sownpar
t,ourhei
rs,execut
ors,andgoodst
otheassur
ed,t
hei
rexecut
ors,
admi
nist
rat
ors,
andassi
gns,
fort
het
rue
per
for
manceoft
hepr
emi
ses,
conf
essi
ngour
sel
vespai
dtheconsi
der
ati
onduei
ntous
f
ort
hisassur
anceby
t
heassur
ed,
atandaf
tert
her
ateof
………………
I
nwi
tnesswher
eofwe,t
heassur
ers,hav
esubscr
ibedournamesand sums assur
ed
i
n……….
..
..
MEMORANDUM N.B.
—Cor
n,f
ish,sal
t,f
rui
t,f
lour
,andseedar
ewar
rant
edf
reef
rom
av
erage,
unl
essgener
alort
heshi
pbest
randed,— sugar
,tobacco,hemp,f
lax,hi
desandski
ns
ar
ewar
rant
edf
reef
rom av
erage,underf
ivepercent
.andal
lot
hergoods,al
so t
he
shi
pandf
rei
ght
,ar
ewar
rant
edf
reef
rom av
erage,
undert
hreepercent
.unl
essgener
al,
ort
heshi
pbest
randed.

RULESFORCONSTRUCTI
ONOFPOLI
CY
Thef
oll
owi
ngar
ether
ulesr
efer
redt
obyt
hisActf
ort
heconst
ruct
ionofapol
i
cy
i
ntheabov
eorot
herl
i
kef
orm,
wher
ethecont
extdoesnotot
her
wiser
equi
re:
—
1.
Lostandnotl
ost
.— Wher
ethesubj
ect
-mat
teri
sinsur
ed“
lostornotl
ost
”andt
he
l
osshasoccur
redbef
oret
hecont
racti
sconcl
uded,t
her
iskat
tachesunl
ess,atsuch
t
imet
heassur
ed wasawar
eoft
hel
oss,
andt
hei
nsur
erwasnot
.
2.Fr
om.—Wher
ethesubj
ect
-mat
teri
sinsur
ed“
from”apar
ti
cul
arpl
ace,t
her
iskdoes
notat
tachunt
ilt
heshi
pst
art
sont
hev
oyagei
nsur
ed.
3.
Atandf
r a)Wher
om.—( eashi
pisi
nsur
ed“
atandf
rom”apar
ti
cul
arpl
ace,andshe
i
satt
hatpl
acei
ngoodsaf
etywhent
hecont
racti
sconcl
uded,t
her
iskat
taches
i
mmedi
atel
y.
(
b)I
fshebenotatt
hatpl
acewhent
hecont
racti
sconcl
uded,
ther
iskat
tachesassoon
asshear
ri
vest
her
eingoodsaf
ety
,and,unl
esst
hepol
i
cyot
her
wisepr
ovi
des,i
tis
i
mmat
eri
alt
hatshei
scov
eredbyanot
herpol
i
cyf
oraspeci
fi
edt
imeaf
terar
ri
val
.
(
c)Wher
echar
ter
edf
rei
ghti
sinsur
ed“
atandf
rom”apar
ti
cul
arpl
ace,
andt
heshi
pisat
t
hatpl
acei
ngoodsaf
etywhent
hecont
racti
sconcl
uded,
ther
iskat
tachesi
mmedi
atel
y.
I
fshebe nott
her
ewhent
hecont
racti
sconcl
uded,t
her
iskat
tachesassoonasshe
ar
ri
vest
her
eingoodsaf
ety
.
(
d)Wher
efr
eight
,ot
hert
hanchar
ter
edf
rei
ght
,ispay
abl
ewi
thoutspeci
alcondi
ti
ons
andi
sinsur
ed“
atandf
rom”apar
ti
cul
arpl
ace,
ther
iskat
tachespr
orat
aast
hegoods
or mer
chandi
sear
eshi
pped;pr
ovi
dedt
hati
fther
ebecar
go i
nreadi
nesswhi
ch
bel
ongst
otheshi
p-owner
,orwhi
chsomeot
herper
sonhascont
ract
edwi
thhi
mtoshi
p,
t
her
iskat
tachesassoonast
heshi
pisr
eadyt
orecei
vesuchcar
go.
4.Fr
om t
hel
oadi
ngt
her
eof
.—Wher
egoodsorot
hermov
abl
esar
einsur
ed“
from t
he
l
oadi
ngt
her
eof
”,t
her
iskdoesnotat
tachunt
ilsuchgoodsormov
abl
esar
eact
ual
l
yon
boar
d,andt
hei
nsur
eri
snotl
i
abl
efort
hem whi
l
eint
ransi
tfr
om t
heshor
etot
heshi
p.
5.Saf
elyl
anded.—Wher
ether
iskongoodsorot
hermov
abl
escont
inuesunt
ilt
heyar
e
“
saf
ely
l
anded”
,theymustbel
andedi
nthecust
omar
ymannerandwi
thi
nar
easonabl
eti
me
af
terar
ri
val
att
he
por
tofdi
schar
ge,
andi
ftheyar
enotsol
andedt
her
iskceases.
6.Touchandst
ay.
—Int
heabsenceofanyf
urt
herl
i
censeorusage,
thel
i
ber
tyt
otouch
andst
ay“
atanypor
torpl
acewhat
soev
er”doesnotaut
hor
iset
heshi
ptodepar
tfr
om
t
hecour
seofherv
oyagef
rom t
hepor
tofdepar
tur
etot
hepor
tofdest
inat
ion.
7.Per
il
soft
heseas.—Thet
erm“
per
il
soft
heseas”r
efer
sonl
ytof
ort
uit
ousacci
dent
s
orcasual
ti
esoft
heseas.I
tdoesnoti
ncl
udet
heor
dinar
yact
ionoft
hewi
ndsand
wav
es.
8.
Pir
ates.— Thet
erm“
pir
ates”i
ncl
udespassenger
swhomut
inyandr
iot
erswho
at
tackt
heshi
pfr
om t
heshor
e.
9.Thi
eves.— The t
erm “
thi
eves”does notcov
ercl
andest
ine t
hef
tor a t
hef
t
commi
tt
edbyanyoneoft
heshi
p’scompany
,whet
hercr
eworpassenger
s.
10.
Rest
rai
ntofPr
inces.—Thet
erm“
arr
est
s,et
c.,
ofki
ngs,
pri
nces,
andpeopl
e”r
efer
s
t
opol
i
ticalorexecut
iveact
s,anddoesnoti
ncl
udeal
osscausedbyr
iotorbyor
dinar
y
j
udi
cial
process.
11.
Bar
rat
ry.— Thet
erm“
bar
rat
ry”i
ncl
udesev
erywr
ongf
ulactwi
l
ful
l
ycommi
tt
edby
t
hemast
erofcr
ewt
othepr
ejudi
ceoft
heowner
,or
,ast
hecasemaybe,
thechar
ter
er.
12.
Allot
herper
il
s.— Thet
erm“
allot
herper
il
s”i
ncl
udesonl
yper
il
ssi
mil
ari
nki
ndt
o
t
heper
il
sspeci
fi
cal
l
yment
ionedi
nthepol
i
cy.
13.
Aver
ageunl
essgener
al.—Thet
erm“
aver
ageunl
essgener
al”meansapar
ti
all
oss
oft
hesubj
ect
-mat
teri
nsur
edot
hert
hanagener
alav
eragel
oss,anddoesnoti
ncl
ude
“
par
ti
cul
archar
ges”
.
14.
Str
anded.— Wher
etheshi
phasst
randed,t
hei
nsur
eri
sli
abl
efort
heexcept
ed
l
ossesal
thought
hel
ossi
snotat
tri
but
abl
etot
hest
randi
ng,pr
ovi
dedt
hatwhent
he
st
andi
ngt
akes pl
acet
her
iskhasat
tachedand,i
fthepol
i
cybeongoods,t
hatt
he
damagedgoodsar
eon boar
d.
15.
Shi
p.—Thet
erm“
shi
p”i
ncl
udest
hehul
l
,mat
eri
alandout
fi
t,st
oresandpr
ovi
sions
f
ort
he
of
fi
cer
sandcr
ew,and,i
nthecaseofv
essel
sengagedi
naspeci
alt
rade,t
heor
dinar
y
f
it
ti
ngsr
equi
sit
efort
het
rade,andal
so,i
nthecaseofast
eamshi
p,t
hemachi
ner
y,
boi
l
ers,
andcoal
sandengi
nest
ores,
ifownedbyt
heassur
edandal
soi
nthecaseofa
shi
p dr
iven bypowerot
hert
hanst
eam,
themachi
ner
yandf
uel
sandengi
nest
ores,
if
ownedbyt
heassur
ed.
16.Fr
eight
.—Thet
erm“
frei
ght
”incl
udest
hepr
ofi
tder
ivabl
ebyashi
p-ownerf
rom t
he
empl
oymentofhi
sshi
ptocar
ryhi
sowngoodsormov
abl
esaswel
lasf
rei
ghtpay
abl
e
byat
hir
dpar
ty,
butdoesnot
i
ncl
udepassagemoney
.
17.
Goods.— Thet
erm“
goods”meansgoodsi
nthenat
ureofmer
chandi
se,anddoes
noti
ncl
udeper
sonalef
fect
sorpr
ovi
sionsandst
oresf
oruseonboar
d.I
ntheabsence
of any usaget
othecont
rar
y,deckcar
goandl
i
vingani
mal
smustbei
nsur
ed
speci
fi
cal
l
y,andnotundert
hegener
aldenomi
nat
ionofgoods.