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INTRODUCTION TO GENERAL INSURANCE
• General Insurance sector in India dates back to 1850, when Tritron Insurance company, for general insurance was incorporated in 1907, the Indian Mercantile Insurance Co. Ltd was set up. • Insurance Act was passed in 1928 but subsequently reviewed in 1938 • In 1968, the Insurance Act, 1938 was amended.
• Prior to 1973, general insurance was urban-centric • 107 insurers including branches of foreign companies operating the country were amalgamated. • GIC was incorporated as a company in 1972 • GoI subscribed to the capital of GIC. GIC, in turn, subscribed to the following four companies :i) National Insurance Co. Ltd ii) New India Assurance Co. Ltd iii) Oriental Fire and general Insurance Co. Ltd iv) United India Insurance Co. Ltd
• New players have also ventured into general insurance business. Ltd .CONTD…. Ltd iii) Reliance General insurance Co. Ltd ii) Bajaj Allianz General Insurance Co. Ltd iv) Royal Sundraram General Insurance Co. They are :i) Tata AIG General Insurance Co. Ltd v) IFFCO TOKIO General Insurance Co. Ltd vi) ICICI Lombard General insurance Co.
Fundamental principles of General Insurance • • • • • • • • Principle of co-operation Principle of probability Insurable interest Utmost good faith Indemnity Subrogation Causa.proxima Contribution .
the losses incidental to marine adventure. against marine losses i.WHAT IS MARINE INSURANCE ??? • A contract of marine insurance is an agreement whereby the insurer undertakes to indemnify the assured in a manner and to the extent thereby agreed.e. .
Air or Land -Inland water voyages -Rail/Road -Air -Post .Definition • Sec 3 of Marine Insurance Act.1963 defines a contract of marine insurance as an insurance cover for marine cargo. • Thus marine insurance is used to cover transportation by any of the following modes of transit singly or jointly:-Sea. air cargo and post parcels.
. -Dashing of the ships on the rocks. • Here perils of sea include:-Sinking of ship -Damage to ship and cargo due to dashing of waves. piracy etc.• Marine insurance is a contract under which the insurer undertakes to indemnify the insured against losses. -Spoilage of cargo due to sea water. -Destruction of the ship and cargo by crew. -Fire or Explosion on the ship. . caused due to perils of the sea. captain.
insurance transactions emerged as distinct commercial agreements • Bottomary was a transaction protecting an owner from financial loss if his ship was destroyed • Today.HISTORY OF MARINE INSURANCE • Ocean marine insurance is one of the earliest forms of insurance • Coincident with the development of trade in the Mediterranean Sea 2000 years before the birth of Christ. marine insurance is essential to international commerce .
TYPES OF MARINE INSURANCE… Ocean marine insurance Inland marine insurance .
reflecting basic marine law. trade customs. and court interpretations of the various policy provisions .OCEAN MARINE INSURANCE • Ocean marine insurance is one of the forms of transportation insurance • The ocean marine contracts are incredibly complex.
BASIC CLASSES OF OCEAN MARINE INSURANCE HULL INSURANCE CARGO INSURANCE PROCTECTION AND INDEMNITY (P& I) INSURANCE FREIGHT INSURANCE .
. and property of a mobile nature. means of transportation such as bridges and tunnels. • Inland marine insurance developed in the 1920s to cover property being transported over land.INLAND MARINE INSURANCE • Inland marine insurance grew out of ocean marine insurance.
Premiums were calculated on the basis of intuition instead of mathematical estimates.History a) Historically marine insurance were of two types: Bottomary loan which was a transaction protecting an owner from financial loss if his ship was destroyed. b) . Respondentia loans were comparable to bottomary loans. agreed to forgive the loan if the cargo was lost. The money lender for a premium in addition to the regular interest charged. The difference being a merchant would take a loan using cargo as a collateral.
Marine insurance includes two types of insurance i. 1963 and is a comprehensive document containing all regulations of marine insurance business in India.History The Indian Marine Insurance Act came into operation on August 1. . Prior to this Act. the insurance business was conducted on the basis of the principles of General Contract Act and English Marine Insurance Law. Cargo insurance and hull insurance.e.
cargo. Marine Insurance covers the loss or damage of ships. Marine Insurance has been made mandatory in exportimport business. acquired or held between the points of origin and final destination.History The cargo insurance includes the goods in transit from the place insured to the sea and from sea to the exporter. The hull insurance is concerned with body. stores tools etc of the ship. terminals and any transport or property by which cargo is transferred. the machinery and technical know-how. .
Advantage to Business Marine insurance also provides liquidity to the exporter as he can discount his bills with local banker without waiting for the bills being by the overseas importer which is usually after they receive the goods which may take months in ocean transit. .
b) Cargo Insurance: covers the shipper of goods if the goods are damaged or lost.Types of Marine Insurance There are four types / classes of marine insurance: a) Hull Insurance: covers physical damage to the ship or vessel. In addition it contains a collision liability clause that covers the owner’s liability if the ship collides with another vessel or damages its cargo. If regular shipments are made. an open cargo policy can be used that insures the goods automatically when a shipment is made. The open cargo policy has no expiration date and remains in force till it is cancelled. The policy can be written to cover a single shipment. .
. P&I insurance protects the ship owner for damage caused by ship to piers. damage to ship’s cargo. d) Freight Insurance: indemnifies the ship owner from the loss of earnings if the goods are damaged or lost and are not delivered. illness or injury to the passenger or crew and fines and penalties.Types of Marine Insurance c) Protection and Indemnity (P&I) insurance: is usually written as a separate contract that provides comprehensive liability insurance for property damage or bodily injury to third parties. docks and harbor installations.
Any insurable property is exposed to marine perils. The owner of or other person interested in or responsible for insurable property by reason of maritime perils may insure any liability to the third party. profit or other pecuniary benefit or security for any advances. commission.Marine Adventure There is a marine adventure. loans or disbursements is endangered by the exposure of insurable property to maritime perils. when1. The earning of freight. . 2. 3. passage money.
The ship could carry on the voyage in the specified route which is mentioned in the policy. . Change of voyage is permitted only in a few specified circumstances.Voyage Voyage is the journey that the vessel undertakes.
. thieves. barratry and other perils. war perils.fire.Maritime Perils / Perils of the Sea Maritime Perils are also called ‘Perils of the Sea. seizures. jettisons. The term ‘Perils of the Sea’ refers only to fortuitous accidents or casualties of the seas and does not include the ordinary action of winds and waves. rovers.’ It means the perils consequent on or incidental to the navigation through the sea for example. captures.
4) Average general sacrifice. ships.Types of Risks/ Perils covered by the Marine Insurance Policy 1) Sinking. 2) Collision or contact of vessels. 3) Discharge of cargo at a port of distress. boats with internal and external objects. dropping of packets or package during loading or unloading while on board or off the broad. stranding and grounding of ship/vessel/boat or craft. 6) Loss of goods or packages containing goods or articles. 5) Volcanic eruption or lightning or fire or explosion. .
a hole made in the bottom of the ship. Loss caused by heating due to the closure of ventilators to prevent the entry of sea waters. Strikes. War. pilferage. wrongful delivery.e. civil commotions & terrorism.Types of Risks/ Perils covered by the Marine Insurance Policy 7) 8) 9) 10) 11) Loss caused by delay. Theft. . 12) Loss caused by rats i. riots. through which sea water enters the ship and damages the cargo. sea pirates. other perils like cyclones. breakage & leakage. malicious damage. lockout. typhoons. Marine insurance apart from indemnifying the assured against the maritime perils also includes liability of the third party incurred by the owner of the ship or other person interested in the property assured on happening of the maritime event. spirals.
) 2) Insurance of cargo in vessels ( Cargo insurance includes goods in transit from the place of insured to the sea and from the sea to the exporter. mechanized boats etc and consignments transported by rail and road. (Hull insurance is concerned with body. 3) Freight paid or received by the assured. the machinery & technical know how. 4) Insurance of third party liability . It also includes ships. stores tools etc.Types of Risks/ Perils covered by the Marine Insurance Policy Thus marine insurance includes: 1) Insurance of vessels (hull) of any description.
. 6) Other incidental activities concerned with building. 5) Insurance also includes all perils and risks incidental to money.Types of Risks/ Perils covered by the Marine Insurance Policy 4) Insurance of transactions which are incidental to the marine adventure or marine transport or transport of cargo from go down to the vessel. securities & other valuable goods in the ship. launching of ship or transport of stores concerned. documents.
Warranties can be expressed (written) or implied.Warranties According to Marine Insurance Act. the breach of which entitles the insurers to avoid the policy altogether and this is so even though the breach arises through circumstances beyond the control of the warrantor. a warranty means a stipulation or term. .
The ship will sail on or before a certain date . The ship is safe on a particular day 2. The ship will proceed to its destination without any deviation 4. The ship & goods are neutral and continue to be so 3.Express Warranties The expressly stated written warranties and may be like 1.
Implied Warranties There are certain warranties which are implied in every contract of marine insurance unless excluded expressly. Proper documentation related to the ship . Warranty of sea worthiness 2. Warranty as to the legality of the voyage 4. These are: 1. Warranty of non deviation from path 3.
7. 6. 4. 8. The following persons have insurable interest in Marine Insurance. 3.Insurable Interest According to Marine Insurance Act 1963. 5. ‘every person has an insurable interest who is interested in a marine adventure’. . 2. Owner of the Ship Owner of the Cargo Creditor who has advanced money on a ship or cargo to the extent of his interest in such ship or cargo Mortgager Mortgagee Master and crew – for wages Bottomry bond hold Person who pays advance freight is recoverable on loss 1.
Trustee 12. Assignee of bill of lading . but has paid.Insurable Interest 9. 11. Bailee 13. Insurer. Persons contingent interest such as the buyer.he can reinsure 14. Shipper and their Agents 10. though the goods may be at seller’s risk and though he may have right to reject the goods.
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