MARINE INSURANCE

What is Marine Insurance?

It’s security for your goods while they are in transit. This policy
secures business goods & personal belongings that are being
transported within the country.

It covers your belongings against damage or loss happening

anywhere from the source to destination.
 WHO NEEDS IT?
HAVING THIS POLICY IS ESSENTIAL FOR BUSINESSES AND INDIVIDUALS ALIKE.
BUSINESS SHIPMENTS ARE USUALLY HIGH IN VALUE AND ANY DAMAGE CAN
DIRECTLY IMPACT BUSINESS.

WHEN IT COMES TO AN INDIVIDUAL, RELOCATION IS REGARDED AS ONE OF

THE MOST STRESSFUL LIFE EVENTS, BE IT FOR JOB CHANGE OR MARRIAGE.

WHATEVER YOUR REASON MAY BE FOR TRANSPORTING YOUR GOODS, OUR

POLICY PROTECTS YOUR GOODS AGAINST MATERIAL DAMAGES.
 WHY DO YOU NEED IT?
AS A BUSINESSPERSON YOUR GOODS ARE OF IMMENSE VALUE TO
YOU. IT’S YOUR SOURCE OF REVENUE. INSURING YOUR GOODS
AGAINST ANY UNTOWARD INCIDENT, WHILE THEY ARE BEING
TRANSPORTED, MEANS SECURING YOUR OWN FUTURE & BUSINESS.

IF YOU’RE AN INDIVIDUAL AND MAKING A MOVE DUE TO

PERSONAL OR PROFESSIONAL REASONS, YOU’RE LIKELY TO BE
WORRIED ABOUT A LOT OF THINGS ALREADY.
 FEATURES OF MARINE INSURANCE
IT IS BASED ON UTMOST GOOD FAITH I.E. BOTH THE INSURED AND
THE INSURER’S MUST DISCLOSE EVERYTHING WHICH IS IN THEIR
KNOWLEDGE AND CAN AFFECT THE CONTRACT OF INSURANCE.

IT IS A CONTRACT OF INDEMNITY. THE INSURED IS ENTITLED TO

RECOVER ONLY THE ACTUAL AMOUNT OF LOSS FROM THE INSURER.
 Types of
Marine
Insurance

OCEAN INLAND
MARINE MARINE
INSURANCE INSURANCE
 OCEAN MARINE INSURANCE HAS A VARIETY OF INSURANCE
COVERAGES DESIGNED TO PROTECT MERCHANDISE, GOODS,
WORKERS, PASSENGERS AND CREWS ABOARD SHIPPING VESSELS
AND CARGO STORAGE DURING MARINE TRANSPORT
DOMESTICALLY OR ABROAD

OCEAN
MARINE
INSURANCE

CARGO HULL FREIGHT

• CARGO INSURANCE: COVERS ALL RISKS OF PHYSICAL DAMAGES
OR LOSS OF THE GOODS WHILE IN TRANSIT BY SEA. IT IS FOR A
PARTICULAR TIME OR FOR A PARTICULAR VOYAGE.
• HULL INSURANCE: TO PROTECT THE SHIP OWNER’S INVESTMENT IN
THE SHIP. IT IS BASICALLY A PROPERTY INSURANCE WHICH
COVERS THE BODY FRAME OF SHIP, MACHINERY, FURNITURE,
TOOLS, FUEL ETC. IT ALSO COVERS THE RISK OF VESSEL DURING
ITS CONSTRUCTION.
• FREIGHT INSURANCE: IT COVERS THE AMOUNT PAID FOR
TRANSPORTATION. IN THIS THE AMOUNT IS PAID IN ADVANCE OR
TO BE PAID AT DESTINATION (IF VESSEL FAILS TO REACH, LOSS OF
FREIGHT)
 INLAND MARINE INSURANCE INDEMNIFIES LOSS TO MOVABLE OR SPECIALIZED
TYPES OF PROPERTY, HISTORICALLY DEVELOPING AS AN OUTGROWTH OF
OCEAN MARINE INSURANCE. INLAND MARINE INSURANCE COVERS PRODUCTS,
MATERIALS AND EQUIPMENT WHEN TRANSPORTED OVER LAND—E.G., VIA
TRUCK OR TRAIN

INLAND
MARINE
INSURANCE

WAREHOUSE
PARTICULAR GENERAL
TO
AVERAGE AVERAGE
WAREHOUSE
PARTICULAR AVERAGE: Particular average is partial loss or damage to a ship
or its cargo that affects only the ship owner or one cargo owner. Particular average
losses are those borne by the owners of the ship or cargo due to direct damage to their
property.

GENERAL AVERAGE: All stakeholders in a sea venture proportionally share any

losses resulting from a voluntary sacrifice of part of the ship or cargo to save the
whole in an emergency.

WAREHOUSE TO WAREHOUSE: A warehouse-to-warehouse insurance covers

cargo from the moment it leaves the origin-warehouse until the moment it arrives at
the destination-warehouse.
 WHO NEEDS TO TAKE MARINE
INSURANCE?

1. MANUFACTURERS
2. TRADERS
3. IMPORTERS/EXPORTERS
4. CUSTOM HOUSE AGENTS
5. TRANSPORTERS/ AGGREGATORS
 WHY DO WE NEED MARINE
INSURANCE…
1. Cargo Theft is Rising
2. Containers / Packages lost at sea
3. Natural events occur
4. Cargo damages happen
5. Legal Requirement
6. Carriers do not give complete coverage
 TYPES OF
LOSS
MARINE LOSS

TOTAL PARTIAL
LOSS LOSS

Actual total Constructive Particular General

loss total loss general loss average loss
ACTUAL TOTAL LOSS

• When a ship is sunk or is completely destroyed by fire, it will be a case of actual

total loss. There may be a case when the goods are so damaged that they do not look
like goods which were insured e.g. if crockery is reduced to pieces, it is a case of
actual total loss.

• In another case if the insured is not able to get the things back i.e., if the ship is
missing and there is no trace of it, it is also a case of actual total loss. In case of
actual total loss the insured is entitled to recover full amount of loss. When the
insured has been compensated the title of goods passes on to the insurer. If some
amount is received from the sale of damaged goods, the amount will go to the
insurer and not to the insured.
CONSTRUCTIVE TOTAL LOSS

• This occurs when the ship is abandoned for certain reasons. It is not commercially
viable to retrieve the ship or cargo. The ship or the cargo is not wholly destroyed
but it is not practicable to get it repaired and restore it to its original position. When
a ship is badly damaged, and the cost of repairs is expected to be more than the
value of the ship, it will be advisable to abandon the ship.

• In the same way if the cargo is safe in the abandoned ship but the cost of bringing
the cargo to the coast is more than the cost of cargo, then it will be proper to leave
the cargo. In the case of constructive total loss, the insured gives a notice of
abandonment and surrenders its interest in the subject-matter to the insurer. The
insured can claim damage for total loss.
PARTICULAR AVERAGE LOSS

• Particular average loss is such that the loss falls on the owner of the
particular ship who has incurred damages either due to an accident or
deliberately.

• It means, if some parts of cargo get damaged due to sea water during the
voyage, the loss will be considered as particular and hence it will be borne
by persons who directly get affected due to damage to the said cargo.

• Reasons- Mechanical issue, overheating etc.

GENERAL AVERAGE LOSS

• A general average loss is caused voluntarily to avoid an impending danger. A general average
loss is one which is caused by an extra-ordinary sacrifice or expenditure voluntarily and
reasonably made or incurred under unpredictable circumstances

• If a ship is sinking because of overload, some of the cargo may be thrown out of the ship with a
purpose to save the ship and the crew. It will be a case of general average loss.

Conditions:
(a)There must be an extra-ordinary situation.
(b) The peril must be real and not imaginary.
(c) The loss must be voluntary and deliberate.
(d)The sacrifice must be made prudently.
(e) The purpose should be to save the whole adventure.
(f) The act should be successful at least partially.
MAJOR
PLAYERS
 TYPES OF MARINE POLICIES

1) VOYAGE POLICY
• WHEN A MARINE INSURANCE POLICY EMBODIES THE CONTRACT
TO INSURE THE SUBJECT-MATTER AT AND FROM, OR FROM ONE
PLACE TO ANOTHER OR OTHER.

• IN A VOYAGE POLICY, THE SUBJECT MATTER IS INSURED FOR A

PARTICULAR VOYAGE IRRESPECTIVE OF TIME INVOLVED IN IT. IN
THIS CASE THE RISK ATTACHES ONLY WHEN THE SHIP STARTS ON
THE VOYAGE.
 TYPES OF MARINE POLICIES
2) TIME POLICY
• AN INSURANCE POLICY EMBODYING A CONTRACT IN WHICH THE SUBJECT
MATTER IS INSURED FOR A DEFINITE PERIOD OF TIME.

3) MIXED POLICY
• A COMBINATION OF VOYAGE POLICY AND TIME POLICY AND COVERS THE RISK
DURING PARTICULAR VOYAGE FOR A SPECIFIED PERIOD OF TIME.

4) VALUED POLICY
• A POLICY WHICH SPECIFIES THE AGREED VALUE OF THE SUBJECT MATTER
INSURED BETWEEN THE INSURER AND THE INSURED AND IT IS SPECIFIED IN THE
POLICY ITSELF.
 TYPES OF MARINE POLICIES

5) UN-VALUED POLICY
• A POLICY WHICH DOES NOT SPECIFY THE VALUE OF THE SUBJECT MATTER
INSURED.

6) FLOATING POLICY
• THIS PROVIDES ANOTHER METHOD OF OBTAINING A LONG TERM CONTRACT OF
GOODS INSURANCE.
 MARINE INSURANCE POLICY
EXCLUSIONS
• INCORRECT AND INADEQUATE PACKAGING OF GOODS BEING TRANSPORTED.

• DAMAGED CAUSED DUE TO DELAY.

• DAMAGED CAUSED WILFULLY OR INTENTIONALLY.

• DAMAGED CAUSED DUE TO CIVIL COMMOTION, STRIKE, RIOTS ETC.

• ANY DAMAGE OR LOSS OCCURRING DUE TO BANKRUPTCY OR FINANCIAL

DEFAULT OF THE OWNER OF THE TRANSPORT VESSEL.

PROCEDURE FOR TAKING OUT A MARINE INSURANCE
POLICY

1. SELECTION OF THE MARINE INSURANCE COMPANY

2. SELECTION OF AGENT OR BROKER
3. MARINE DECLARATION FORM
4. ASSESSMENT OF THE RISK
5. PAYMENT OF PREMIUM
6. ISSUE OF COVER NOTE
7. ISSUE OF POLICY
 WHAT IT ALL COVERS?

• SINKING, STRANDING, FIRE, EXPLOSION

• LOSS IN LOADING OR UNLOADING CARGO
• TOTAL LOSS COVERAGE
• EARTHQUAKE OR LIGHTNING
• UNFORESEEABLE ADMINISTRATIVE EXPENSES
• JETTISON OR WASHING OVERBOARD
• COLLISION, OVERTURNING, DERAILMENT, ACCIDENT
• NATURAL CALAMITIES
• GENERAL AVERAGE
 FACTORS FOR DECIDING PREMIUM OF
MARINE INSURANCE POLICIES

• NATURE OF THE GOODS

• VALUE OF THE GOODS
• ROUTE, CONSTRUCTION, AND TYPE OF THE VESSEL
• DESTINATION TO WHICH YOUR GOODS WILL TRAVEL
• ANY POLITICAL RISK, STRIKE, RIOTS, AND CIVIL COMMOTION THAT
COULD HAMPER THE DELIVERY OF GOODS
• ANY INHERENT RISK THAT YOUR PRODUCTS MAY POSSESS
• HISTORICAL DATA OF INCIDENTS WITH THE INSURED AND OVERALL
 CLAIM PROCESS
• IN CASE OF LOSS OR DAMAGE TO THE CARGO OR THE SHIP, YOU NEED TO
IMMEDIATELY INFORM THE INSURANCE PROVIDER
• A SURVEYOR WILL ASSESS THE DAMAGE OR LOSS MENTIONED
• ALL THE PROOFS AND WITNESSES NEED TO BE SUBMITTED ALONG WITH THE
DULY FILLED IN CLAIM FORM
• FOR A MISSING PACKAGE, THE INSURED MUST LODGE FILE A MONETARY
CLAIM WITH THE INSURANCE PROVIDER AND GET AN ACKNOWLEDGEMENT
FOR IT
• IF THE PROVIDER FINDS THE CASE FIT, IT WOULD APPROVE THE CLAIM, ELSE IT
WOULD REJECT IT
• IN CASE YOU ARE NOT SATISFIED WITH THE CASE, YOU CAN APPROACH THE
COURT OF LAW
 DOCUMENTS REQUIRED FOR CLAIM
PROCESS

• DULY FILLED IN CLAIM FORM

• ORIGINAL INSURANCE CERTIFICATE WITH THE POLICY
NUMBER
• COPY OF BILLING LADING
• SURVEY REPORT OR MISSING CERTIFICATE
• ORIGINAL INVOICE, PACKING LIST, SHIPPING SPECIFICATION