Chapter-VI

Classification of Insurance
Non life Insurance: Marine,
Fire & Accident Insurance

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Classification of Insurance
Branch wise classification: various types of
policies issued under each main branch of
insurance. Such as: Marine, fire, life and
accident.
Subject matter wise classification: Various
types of policies issued to cover a classified
interest or subject matter, no matter of the
branch or department under which these are
issued.
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Branch wise classification

Page 58-60: READ ALL THE POINTS
Glass insurance: Glass insurance is an insurance policy
which will pay for the replacement of broken or damaged
glass. While replacing glass might not seem very expensive to
those who have never had to pay for it, glass can be extremely
costly, especially in the case of specialty glass such as plate
glass, UV-resistant glass, or double paned glass. Many
insurance companies offer glass insurance to their customers,
usually in the form of a rider attached to an existing insurance
policy.
Subject matter wise classification: Page 6061: READ ALL THE POINTS
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Property Insurance
Various types of policies in different branches will
now be discussed:
Marine Insurance: The policies primarily aim
at providing protection in respect of loss,
damage or destruction to the subject matter of
insurance. Such as: hull, cargo and fright, caused
by perils of the seas or maritime perils. Such
perils are: Fire, Theft, Jettison, Collision,
Contract, heavy weather, stranding/foundering ,
sinking, other perils and war perils.
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Stranding
The term stranding is used for marine
mammals (seals, dolphins, whales) and sea
turtles that are found on the beach either dead
or alive. Injury or death in seals can be
attributed to: shark bites, parasites, respiratory
ailments, or human inflicted causes such as net
entanglement, vessel strike, toxic pollution and
ingestion of plastics.
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Subject matter of Insurance

Hull: A hull is the watertight body of a ship or
boat. Above the hull is the superstructure
and/or deckhouse, where present. The line
where the hull meets the water surface is
called the waterline.
It refers to the ship, that is to say, hull and
machinery of the vessel. The ship is always at
the risk of the perils of the seas and therefore
the ship owner can insure it against probable
losses as such.
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Half-hull of the 46-gun ship of the line Tigre,

build from 1724 in Toulon after plans by Blas
Coulomb
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Subject matter of Insurance

Cargo: This refers to goods or merchandise
that are being carried from one place to
another or are being imported or exported.
Such goods or merchandise may be damaged
or lost while in course or transit and therefore
the owner of such goods can always insure
against the probable losses.

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Subject matter of Insurance

Freight: this is the consideration payable
to the ship owner in respect of carriage
of goods by the owners ship. Sometimes
the freight is pre-paid when it is at the risks of
the cargo owner, and sometimes the freight is
after-paid when it is at the risk of the ship
owner.
Therefore
depending
on
circumstances either the cargo owner or
the ship owner will stand to lose the
freight if the goods cannot reach
destination safe and sound because of
the
operation
of
maritime
perils.
Insurance can be taken by the party
having insurable interest.
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Types of Marine Policies

Time Policy: Duration of the policy
cover. The time factor is important here.
Read More.. Page 62-63
Voyage Policy: Important factor here
is the voyage and not the time. In
order to validate a claim the loss must
take place within or during the specified
voyage.
Mixed policy: Read the first
paragraphit is virtually a mixture of
both time policy and voyage policy.
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Difference between Time and

Voyage policy and their
problems
Page 63.Discussion from Mixed
policy

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Types of Marine Policies

Floating policy: This type of policy is usually
used for cargo insurance. In order to save the
difficulties of merchants in effecting numbers
of policies for each time of shipment, a
floating policy may be issued for a round
sum covering the numbers of anticipated
shipments. OPEN COVER: usually for
twelve months, is given to the insured
indication that the insurers shall insure
each and every shipment to e declared by
the insured, as per terms and condition.
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Types of Marine Policies

Building risk policy: These types of
policies are issued in respect of ships
whilst in the process of erection or
building at dockyards.

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Fire Insurance
All policies issued under the heading of fire
insurance primarily aim at providing
protection against financial losses arising
out of the operation of fire or certain other
specified perils. The subject matter of
insurance are usually: Building, Furniture
fixture and fittings, plant & machinery, Goods
and Merchandise, stock of all kinds.
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Fire Insurance
The scope of fire insurance may be
considered under two broad heading:
1. Material loss insurance &
2. Consequential (major) loss
insurance

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Material loss insurance

1. Standard fire policy: This is the basic type of
policy form used for almost all types of fire
insurance covers. Page 65-66READ ALL THE
POINTS
2. Special perils insurance: Page 66
3. Declaration policy: A declaration clause is usually
attached to a standard fire policy. Considering the
practical difficulties as to the application of the
principles of indemnity, mostly in cases of stocks
subjected to violent value fluctuation, such policies
have been evolved.
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Material loss insurance

4. Blanket policies: These policies are
aimed at simplifying complex fire
risks. Under this system, instead of
specifying individual sums for each
building and the plants, machineries and
stocks therein, only one sum is
specified for all building together
and
one
for
all
plants
and
machineries and one sum for all
stocks.
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Material loss insurance

5. Reinstatement (replacement) policy: standard fire
policy is used with the reinstatement clause attached.
Difference between Standard fire policy and
Reinstatement policy:
under standard fire policy the loss is settled on the
basis of market value immediately before the fire.
Under Reinstatement clause, the loss is settled on
the basis of cost of replacement of the damage
property by new property.
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Material loss insurance

6.Building in course of erection: these policies are
usually issued to builders and contractors with
regard to building, which are in the course of
erection and not yet handed over to the owners.
7.Households
Policies:
these
are
very
comprehensive policies providing covers for a
number of perils. Policies may be issued for
building and contents. Perils covered are fire,
burglary, special perils and liabilities of the
insured.
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Material loss insurance

Sprinkler leakage insurance:
(Sprinkler: A device that sprays
water)
Sometimes these sprinklers
themselves may pose as a peril and
can cause substantial damage to
property.

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Consequential loss
insurance
Also known as loss of profit insurance. No protection is

afforded in respect of business loss or profit loss arising

out of the interruption of the business due to material
loss of the property.
The purpose of loss of profit insurance is to provide
protection to the insured in respect of such consequential
losses arising out of material loss.
This policy primarily aims at providing protection against
loss of revenue or loss of earning during this inevitable
period of interruption of the business caused by material
loss due to fire.

Covers provided: Page 68-69

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Accident Insurance
Any policy that does not appropriately
come under marine, fire or life shall come
under accident department. The policies are:
Burglary, Motor, Contractors all Risk,
Engineering Insurance, Aviation insurance,
Glass Insurance, Crop Insurance, Livestock
Insurance and War risk Insurance.

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Accident Insurance
1. Burglary Insurance: there are usually
four types of policies coming within the
scope of burglary insurance:
a.Burglary (Business Premises) Insurance
b.Burglary (Private dwelling) Insurance
c.All Risks policy
d.Cash in safe and transit
READ THE DISCUSSION FROM BOOK
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Accident Insurance
2. Motor Insurance: Motor vehicles are usually
classified as Private cars, Commercial Vehicles,
Motor Cycles, Agricultural Vehicles and Motor
traders Vehicles.
Policies:
a. Comprehensive Policy
b. Third Party Only Policy
c. Act Liability Only Policy

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Accident Insurance
3. Contractors All Risk: Normally the contract
in between the principal and the contractor
may require the contractor to take out policy of
insurance to project the contract work from
unexpected incidents.
The policy may be in the name of the
contractor alone or in the joint name of the
contractor and principal.

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Accident Insurance
4. Engineering Insurance
5. Aviation Insurance
6. Glass Insurance
ALL THIS
7. Crop Insurance
POINTS, PAGE
8. Live-Stock Insurance
72-73
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READ

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War-Risk Insurance
War is a peril, which substantially causes
damages to properties of various
descriptions.
The company shall not be liable under this policy
in respect of loss, damage or destruction caused
by war, invasion, hostilities, act of foreign enemy,
civil war, rebellion, revolution, insurrection,
military or usurped power.

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Liability Insurance
Marine: Protection and Indemnity Clubs of London
Fire: No liability policy is issued as such in this
department.
Accident:
1. Employers Liability Insurance
2. Public Liability Insurance
3. Professional Indemnity Insurance
4. Motor Insurance
5. Aviation Insurance
Thank You
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