05MARINE INSURANCE (1)

8/7/2019 05MARINE INSURANCE (1)

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` Presented By:` Dilip Prajapati (84)

` Sharad Vansola (101)

` Abdul Kadir (94)

` Indra Patel (71)

` Parth Shah (92)


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` Marine Insurance covers the loss or damage of

ships, cargo, and any transport or property by

which cargo is transferred, acquired, or held

between the points of origin and final destination.` Protects a shipping company against the loss of a

ship or its cargo.


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` Maritime insurance was the earliest well-developed kind

of insurance, with origins in the Greek and Roman maritime loan.

` Separate marine insurance contracts were developed in Genoa and

other Italian cities in the fourteenth century and spread to northernEurope.

` The modern origins of marine insurance law in English law were in

the law merchant, with the establishment in England in 1601 of a

specialized chamber of assurance separate from the other Courts.


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` In the 19th. century, Lloyd's and the Institute of London

Underwriters (a grouping of London company insurers) developedbetween them standardised clauses for the use of marine insurance,

and these have been maintained since. These are known as the

Institute Clauses because the Institute covered the cost of their

publication.

` Nowadays, Marine insurance is often grouped with Aviation and

Transit (ie. cargo) risks, and in this form is known by the acronym

'MAT'.


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` The cargo can be damaged on exposure to a wide

variety of risks

` Marine insurance relieves the traders of theirfinancial exposure from physical loss or damage

to their goods while in transit


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` These two terms are used to differentiate the degree of proof

where a vessel or cargo has been lost.

` An Actual Total Loss refers to the situation where the position

is clear and a Constructive Total Loss refers to the situation

where a loss is inferred. In practice, a Constructive Total Loss

might also be used to describe a loss where the cost of repair is

not economic; ie a 'write-off'.


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` Marine insurance can be broadly classified aseither property or liability insurance.

PROPERTY INSURANCE insures against financial lossresulting from damage to, or destruction of, property inwhich the insured has an insurable interest.

LIABILITY INSURANCE insures against financial lossresulting from some person or organization making aclaim against the insured for damages because of bodilyinjury, death, property damage, or some other injury forwhich the insured is allegedly responsible.


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` Cargo insurance Cargo insurance covers the interest ofshippers, consignees, distributors, and others in goods andmerchandise shipped primarily by water or, if in foreigntrade, also by air.

` Hull and Machinery( H & M) insurance H & Minsurance protects ship-owners and others with an interestin vessels, and the like against the expenses that might beincurred in repairing or replacing such property if it isdamaged, destroyed, or lost due to a covered peril.

` Loss of income insurance Marine loss of incomeinsurance covers a ship-owner against loss of businessincome resulting from damage to or loss of the insuredvessel.


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` LIABILITY INSURANCE

` Liability insurance can also be divided into three categories: (1)

collision liability, (2) protection and indemnity, and (3) other liability

insurances.` Collision Liability Insurance. Collision liability insurance is

included in most commercial hull insurance policies. Due to reasons

such as the size of the H & M policy deductible and prompt

guarantees issued by the P & I Underwriters, it is often more

prudent and practical to have this aspect of cover underwritten

under the P & I policy. It covers the liability of the insured vessel fordamage to another vessel and property thereon resulting from

collision between the insured vessel and the other vessel.

` Protection and Indemnity Insurance.Protection and indemnity

(P&I) insurance is the major form of liability insurance for vessels.

This insurance protects the insured against (1) liability for bodilyinjury or property damage arising out of specified types of accidents,

and (2) certain unexpected vessel-related expenditures.

` OtherLiability Insurance.Other liability policies include the

following:


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` Contract of sale : Legal contract for exchangeof goods, services or property to be exchangedfrom seller to buyer for an agreed upon value

` The contract of sale determines who buys thepolicy

` The most common contracts of sale, also calledIncoterms (International Commercial Terms), are:FOB (Free on Board)C & F (Cost & Freight)CIF (Cost, Insurance & Freight)


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FOB (Free on Board):

Seller is bound to load the goods onto the carryingvessel, he does not need to arrange insurance.

FOB : Buyer Pays freight, Buyer arranges insurance

C&F (Cost and Freight):

Same as FOB. The only difference is that the freightshould be paid by the seller

C& F : Seller pays freight, Buyer arranges insurance


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CIF (Cost Insurance Freight):

The seller is bound to provide insurance covering

the whole voyage up to the final destinationCIF : Seller pays freight and seller arranges the

insurance


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` In marine cargo insurance, the person having

insurable interest at the time of loss can only

recover

` Marine cargo policies are freely assignable. Unlike

other policies, there is no need to take insurance

companys consent for transferring policy to new

buyer


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` Domestic Trade- Sale and distribution of goods

within the country

` International Trade- Exports and Imports of goods

to/from other countries` Parties:

Sellers or exporters

Buyers or importers,

Intermediaries


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` - Bill of Entry ( Import declaration)` - Signed invoice` - Packing List` - Bills of lading or bill of lading / airway bill` - Completion of the GATT has been filled in

declaration` - The importer or his customs declaration

agent` - Approval (when necessary)` - Letters of credit / bank draft (when necessary)

` - Insurance documents` - Import license` - Trade License (when necessary)


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`Marine Insurance Act, 1963` Every person has an insurable interest who is

interested in a marine adventure

` Legal and equitable relation to the adventureor to any insurable property at risk therein, inconsequence of which he is benefited by its safe arrival or prejudiced by its loss or damage Incur liability as a result of such loss, damage or

detention


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` A valued policy is a policy which specifies the agreed valueof the subject-matter insured.

Subject to the provisions of the Marine Ins. Act, and in theabsence of fraud, the value fixed by the policy is, asbetween the insurer and assured, conclusive of theinsurable value of the subject intended to be insured,whether the loss be total or partial.


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` Unvalued policy.

` An unvalued policy is a policy which does not

specify the value of the subject-matter insured, but

subject to the limit of the sum insured, leaves theinsurable value to be subsequently ascertained, in

the manner hereinbefore explained. (CIF + %)


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` A peculiarity of marine insurance, and insurance law generally, is the use

of the terms condition and warranty.

` In English law, a condition typically describes a part of the contract that is

fundamental to the performance of that contract, and, if breached, the non-breaching party is entitled not only to claim damages but to terminate the

contract on the basis that it has been repudiated by the party in breach.

` Warranty is not fundamental to the performance of the contract and breach

of a warranty, whilst giving rise to a claim for damages, does not entitle the

non-breaching party to terminate the contract.


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Thank You

Documents

05MARINE INSURANCE (1)