Marine

Insurance
https://www.youtube.com/watch?v=AgcxOsD39YQ

Meaning of marine insurance

Marine

insurance is a contract
whereby the insurer undertakes to
indemnify the assured, in manner
and to the extent thereby by agreed,
against marine losses, i.e. the losses
incident to marine adventure

 Contract

of Insurance
Insurer & Insured
Premium
Policy
Perils Insured Against
Insurance against Wagering

Why Marine Insurance should be done?

Once the goods are moved out from the warehouse of the seller, they are no
more in the custody of the seller or the buyer. They are rather in the hands of a
third party called the carrier. During the transit loss can arise from:
Fire, explosion
Contact with water
Breakage
Accident
Derailment of conveyance
Theft
Pilferage
Non-delivery
Exposure to these risks and the fact that the goods are in possession of a
third party enhances the chances of loss.

Principles governing the

contract of insurance

Principle

of utmost good faith

Principle of insurable interest
Principle of indemnity
Causa proxima

Marine Policy

Meaning :-

The terms and conditions on which a

contract of marine insurance is entered
into between the assured and the
insurer are incorporated in a document.
It must be signed by or on behalf of
the insurer [Sec.26(1)].
It must be duly stamped under the
Stamp Act, 1899.

It must specify -

1.

the name of the assured, or of some person who

effects the insurance on his behalf
the subject-matter insured and the risk insured
against
the voyage, or period of time, or both, as the
case may be, covered by the insurance
the sum or sums insured
the name or names of the insurer or insurers

2.
3.
4.
5.

Types of Marine Policies

Some important types of policies are:

I. Voyage Policy :

Where the contract is to insure the subjectmatter at and from or from one place to
another or others [Sec.27(1)].

II. Time Policy :

Where the contract is to insure the subjectmatter for a definite period of time
[Sec.27(1)].
It cant be for a period more than a year
[Sec.27(2)].
It may, however, contain a continuation
clause.

iii. Floating Policy :

It only mentions the amount for which

the insurance is taken out, and leaves
the name of the ship or ships and
other particulars to be defined by
subsequent declarations, which will be
declared by the assured by
endorsement on the policy or in other
customary manner.

WARRANTIES IN A CONTRACT OF
MARINE INSURANCE
The

term warranty in case of

MARINE INSURANCE ACT means
that the assured undertakes that
some particular thing shall or shall
not be done , or that some
stipulation shall be fulfilled , or that
a particular state of facts does or
does not exist.

Types of warranty

Expressed warranty
Date on which the ship will sail
Place and manner of loading
Statement that the cargo is lawful
merchandise

Implied Warranty
Seaworthiness of the ship
Legality of the voyage
Proper documentation
Clauses of marine insurance act

LOSSES

Unless the policy otherwise provides, the

insurer is liable for any losses
proximately caused by a peril insured
against.
Further unless the policy otherwise
provides, the insurer is not liable :1.If the loss is not caused by a peril
insured against.
2. If the loss is caused by delay, which is
caused by a peril insured against.

3. If the loss is caused by the ordinary wear

& tear, ordinary leakage or breakage.
A loss may be either total or partial. Any loss
other than
Total is partial loss.

TOTAL LOSS
A Total loss may be either :1.An Actual total loss
2. A Constructive total loss.

1.ACTUAL TOTAL LOSS :- An actual total loss

occurs
(a) Where the subject matter is actually
destroyed or irreparably damaged.
(b) Where the subject matter ceases to be a
thing of the kind insured.
(c) Where the assured is irretrievably deprived
of the of the subject matter.

2. CONSTRUCTIVE TOTAL LOSS :- A constructive total

loss
occurs where the subject matter insured is reasonably
abandoned because its actual total loss appears to be
unavoidable.
In particular there is a constructive total loss :- In the
case of damage to goods, the cost of repairing the
goods will exceed their value after arrival.

LOSSES

Partial Loss
Sec

56 of Marine Insurance Act 1963

provides that any loss other than
total loss is a partial loss.

Particular Average Loss

Defines

it as partial loss of the

subject matter insured, caused by a
peril insured against, and which is
not a general average loss.
Ex- damage to the ship by running
aground, damage to the cargo by fire
etc.,

Particular average loss

1.
2.
3.

The three things under risk

during the course of voyage
are:Ship.
Cargo
The freight( compensation paid
for the transportation of goods)

Cont
As a general rule ,any loss to these interest
sustained must be borne by that interest
alone.
It gives no right of contribution from the
other parties interested in the adventure.
So, particular average losses are those in
which damage is caused by accident in the
marine adventure by the peril of sea.

General average loss

Where extraordinary sacrifices are
made at the time of peril for the
benefit of the whole adventure.
Voluntary

and accidental
Adventure must be imperiled, sacrifice in
anticipation not recognized
Objective must be the preservation of
adventure
Loss of market is indirect loss hence not
allowed in GAL.

Extent of Cover
Since

January 1982, the British

Insurance Market adopted new forms
of cover for all cargo insurance, and
these forms known as Institute
Cargo Clauses (A), (B), (C) were
adopted in India from 1st April 1983.

Marine Policy For Overseas

Shipments
Institute Cargo Clause
Basic Cover - ICC (C)
Inter Mediate Cover - ICC (B)
All Risk Cover - ICC (A)

23

Comparison between the institute cargo clauses (A), (B) & (C)
A comparative analysis of the institute Cargo Clauses (A), (B) & (C)
Type of risks
Covered () not covered ()

Loss / damage reasonably attributable to:

1. Fire or explosion
2. Vessel/Craft being stranded, grounded, sunk or
capsized.
3. Overturning/derailment of land conveyance.

4. Collision or contact of vessel, craft or conveyance

With any external object other then water.
5. Discharge of cargo at a port of distress
6. Earthquake, volcanic eruption, lightning
7. General average and salvage charges incurred to
avoid loss from any cause except those excluded
8. General average sacrifice

9.
10.
11.

12.
13.

14.
15.

16.

Jettison
Washing overboard
Entry of sea, lake or river water into the vessel,
craft, hold, conveyance, container, lift van or
place of storage.
Rainwater damage
Total loss of any package lost overboard or
dropped whilst loading or unloading from
vessel or craft.
Piracy.
Deliberate damage or destruction by wrongful act
of any person or persons, (i.e. by malicious acts)
(Can be covered by malicious Damage Clause for
I.C.C (B) and (C) upon payment or extra premium)
In the event of frustration of the voyage resulting
from a risk covered, extra charges incurred in
unloading, storing and forwarding to destination

17. Reasonable charges for averting or minimizing loss

recoverable under this insurance and also those
incurred, to pursue recovery rights against carriers,
bailees or third parties.
18. Other or extraneous perils all involving a fortuity
and from external causes, for example:
Damage as a result of shifting in heavy weather
Improper stowage
Rough handling
Breakage, leakage, denting, scratching, crushing,
crumpling, chipping

Heating sweating
rust,
Hook and sling damage
Contact with mud, oils and acids, damage by
other cargo
Shortage, theft, pilferage, non-delivery
Other loss/damage caused fortuitously and from

19. liability under Both to blame collision

COMMON EXCLUSIONS

Loss, damage or expenses attributable to willful misconduct of

the assured
Ordinary or inevitable losses
Loss, damage or expense caused by inherent vice or nature of
the subject matter insured
Loss/damage due to insufficient, unsuitable or defective packing
(including stowage)
Loss/damage or expenses proximately caused by delay even if
the delay is caused by a peril insured against
Loss damage or expenses arising from insolvency .
Loss damage due to un seaworthiness of the vessel or craft,
container, lift van employed for carrying the insured matter.
Wars, strikes and civil commotions unless covered under
separate endorsements.

Thank You!

Marine
Insurance
https://www.youtube.com/watch?v=AgcxOsD39YQ

Meaning of marine insurance

Marine

insurance is a contract
whereby the insurer undertakes to
indemnify the assured, in manner
and to the extent thereby by agreed,
against marine losses, i.e. the losses
incident to marine adventure

 Contract

of Insurance
Insurer & Insured
Premium
Policy
Perils Insured Against
Insurance against Wagering

Why Marine Insurance should be done?

Once the goods are moved out from the warehouse of the seller, they are no
more in the custody of the seller or the buyer. They are rather in the hands of a
third party called the carrier. During the transit loss can arise from:
Fire, explosion
Contact with water
Breakage
Accident
Derailment of conveyance
Theft
Pilferage
Non-delivery
Exposure to these risks and the fact that the goods are in possession of a
third party enhances the chances of loss.

33

Principles governing the

contract of insurance

Principle

of utmost good faith

Principle of insurable interest
Principle of indemnity
Causa proxima

Marine Policy

Meaning :-

The terms and conditions on which a

contract of marine insurance is entered
into between the assured and the
insurer are incorporated in a document.
It must be signed by or on behalf of
the insurer [Sec.26(1)].
It must be duly stamped under the
Stamp Act, 1899.

It must specify -

1.

the name of the assured, or of some person who

effects the insurance on his behalf
the subject-matter insured and the risk insured
against
the voyage, or period of time, or both, as the
case may be, covered by the insurance
the sum or sums insured
the name or names of the insurer or insurers

2.
3.
4.
5.

Types of Marine Policies

Some important types of policies are:

I. Voyage Policy :

Where the contract is to insure the subjectmatter at and from or from one place to
another or others [Sec.27(1)].

II. Time Policy :

Where the contract is to insure the subjectmatter for a definite period of time
[Sec.27(1)].
It cant be for a period more than a year
[Sec.27(2)].
It may, however, contain a continuation
clause.

iii. Floating Policy :

It only mentions the amount for which

the insurance is taken out, and leaves
the name of the ship or ships and
other particulars to be defined by
subsequent declarations, which will be
declared by the assured by
endorsement on the policy or in other
customary manner.

WARRANTIES IN A CONTRACT OF
MARINE INSURANCE
The

term warranty in case of

MARINE INSURANCE ACT means
that the assured undertakes that
some particular thing shall or shall
not be done , or that some
stipulation shall be fulfilled , or that
a particular state of facts does or
does not exist.

Types of warranty

Expressed warranty
Date on which the ship will sail
Place and manner of loading
Statement that the cargo is lawful
merchandise

Implied Warranty
Seaworthiness of the ship
Legality of the voyage
Proper documentation
Clauses of marine insurance act

LOSSES

Unless the policy otherwise provides, the

insurer is liable for any losses
proximately caused by a peril insured
against.
Further unless the policy otherwise
provides, the insurer is not liable :1.If the loss is not caused by a peril
insured against.
2. If the loss is caused by delay, which is
caused by a peril insured against.

3. If the loss is caused by the ordinary wear

& tear, ordinary leakage or breakage.
A loss may be either total or partial. Any loss
other than
Total is partial loss.

TOTAL LOSS
A Total loss may be either :1.An Actual total loss
2. A Constructive total loss.

1.ACTUAL TOTAL LOSS :- An actual total loss

occurs
(a) Where the subject matter is actually
destroyed or irreparably damaged.
(b) Where the subject matter ceases to be a
thing of the kind insured.
(c) Where the assured is irretrievably deprived
of the of the subject matter.

2. CONSTRUCTIVE TOTAL LOSS :- A constructive total

loss
occurs where the subject matter insured is reasonably
abandoned because its actual total loss appears to be
unavoidable.
In particular there is a constructive total loss :- In the
case of damage to goods, the cost of repairing the
goods will exceed their value after arrival.

LOSSES

Partial Loss
Sec

56 of Marine Insurance Act 1963

provides that any loss other than
total loss is a partial loss.

Particular Average Loss

Defines

it as partial loss of the

subject matter insured, caused by a
peril insured against, and which is
not a general average loss.
Ex- damage to the ship by running
aground, damage to the cargo by fire
etc.,

Particular average loss

1.
2.
3.

The three things under risk

during the course of voyage
are:Ship.
Cargo
The freight( compensation paid
for the transportation of goods)

Cont
As a general rule ,any loss to these interest
sustained must be borne by that interest
alone.
It gives no right of contribution from the
other parties interested in the adventure.
So, particular average losses are those in
which damage is caused by accident in the
marine adventure by the peril of sea.

General average loss

Where extraordinary sacrifices are
made at the time of peril for the
benefit of the whole adventure.
Voluntary

and accidental
Adventure must be imperiled, sacrifice in
anticipation not recognized
Objective must be the preservation of
adventure
Loss of market is indirect loss hence not
allowed in GAL.

Extent of Cover
Since

January 1982, the British

Insurance Market adopted new forms
of cover for all cargo insurance, and
these forms known as Institute
Cargo Clauses (A), (B), (C) were
adopted in India from 1st April 1983.

Marine Policy For Overseas

Shipments
Institute Cargo Clause
Basic Cover - ICC (C)
Inter Mediate Cover - ICC (B)
All Risk Cover - ICC (A)

52

Comparison between the institute cargo clauses (A), (B) & (C)
A comparative analysis of the institute Cargo Clauses (A), (B) & (C)
Type of risks
Covered () not covered ()

Loss / damage reasonably attributable to:

1. Fire or explosion
2. Vessel/Craft being stranded, grounded, sunk or
capsized.
3. Overturning/derailment of land conveyance.

4. Collision or contact of vessel, craft or conveyance

With any external object other then water.
5. Discharge of cargo at a port of distress
6. Earthquake, volcanic eruption, lightning
7. General average and salvage charges incurred to
avoid loss from any cause except those excluded
8. General average sacrifice

9.
10.
11.

12.
13.

14.
15.

16.

Jettison
Washing overboard
Entry of sea, lake or river water into the vessel,
craft, hold, conveyance, container, lift van or
place of storage.
Rainwater damage
Total loss of any package lost overboard or
dropped whilst loading or unloading from
vessel or craft.
Piracy.
Deliberate damage or destruction by wrongful act
of any person or persons, (i.e. by malicious acts)
(Can be covered by malicious Damage Clause for
I.C.C (B) and (C) upon payment or extra premium)
In the event of frustration of the voyage resulting
from a risk covered, extra charges incurred in
unloading, storing and forwarding to destination

17. Reasonable charges for averting or minimizing loss

recoverable under this insurance and also those
incurred, to pursue recovery rights against carriers,
bailees or third parties.
18. Other or extraneous perils all involving a fortuity
and from external causes, for example:
Damage as a result of shifting in heavy weather
Improper stowage
Rough handling
Breakage, leakage, denting, scratching, crushing,
crumpling, chipping

Heating sweating
rust,
Hook and sling damage
Contact with mud, oils and acids, damage by
other cargo
Shortage, theft, pilferage, non-delivery
Other loss/damage caused fortuitously and from

19. liability under Both to blame collision

COMMON EXCLUSIONS

Loss, damage or expenses attributable to willful misconduct of

the assured
Ordinary or inevitable losses
Loss, damage or expense caused by inherent vice or nature of
the subject matter insured
Loss/damage due to insufficient, unsuitable or defective packing
(including stowage)
Loss/damage or expenses proximately caused by delay even if
the delay is caused by a peril insured against
Loss damage or expenses arising from insolvency .
Loss damage due to un seaworthiness of the vessel or craft,
container, lift van employed for carrying the insured matter.
Wars, strikes and civil commotions unless covered under
separate endorsements.

Thank You!