Marine Insurance.

Chapter 1.
Introduction: Insurance connected with the risks of transportation of goods, is one of the
Oldest and most important form of insurance.

The value of goods shipped by the business firms each year cost billions of rupees. These goods are exposed to damage or loss from numerous perils associated with transportation. These goods can be protected by marine insurance contracts. It is an important element of the general insurance industry. It essentially provides cover for the losses suffered due to marine perils. In India marine insurance is regulated by the Indian maritime insurance act, 1963 which is based on the original marine insurance act, 1906 of U.K.

Chapter 2.

Meaning & Definition:

Meaning:
Marine insurance covers risk of loss of ship, cargo and freight in sea routes. It is the written contract between the insured and insurer. The insurer agrees to indemnify the insured against risks of marine losses caused by perils of sea.

Marine insurance is the oldest type of insurance. It provides protection to exports, imports and the shipping companies. It is concerned with the international trade.

Definition:
A contract of marine insurance is defined by the Marine Insurance Act 1963 as an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent there by agreed losses incidental to marine adventure. It may cover loss or damage to vessels, cargo or freight. Sec 2 (C & F) of the Marine Insurance Act, 1963defines marine insurance and includes the movables exposed to maritime perils. Movables mean movable tangible property, which includes money, valuable securities and documents etc.

Chapter 3.
History:
Marine insurance as we know it today can be described as mother of all insurances. It is believed to have originated in England owing to the frequent movement of ships overseas for commerce and trade. In India, marine insurance has been in vogue for several centuries. Prior to the development of marine insurance, the people across the world had a system of pooling their contribution so that if any one of them suffers loss during voyage, he would be compensated from the pool. Today marine insurance has assumed a vast dimension due to ever expanding trade across the globe. The value of each ship and the cargo carried therein may be costing millions of rupees to the owners. So it involves large shipping companies that require protection not only for their costly ships against the perils of the sea, but also to the cargo being carried in each of the ships. The Indian Marine Insurance Act came into operation on August 1, 1963 and is a comprehensive document containing all regulations of marine insurance business in India. Prior to this Act, the insurance business was conducted on the basis of the principles of General Contract Act and English Marine Insurance Law. Marine insurance includes two types of insurance i.e. Cargo insurance and hull insurance.

Chapter 4.
Branches of Marine Insurance:

Marine insurance has two branches:

1. Ocean Marine Insurance:

Ocean marine insurance covers the perils of the sea.

2. Inland Marine Insurance:

Inland marine insurance is related to the inland risks on the land.

Chapter 5.
Principles of Marine Insurance:

Utmost good faith: The marine contract is based on Utmost good faith on the part of the parties. The burden of this principle is more on the insured than on the underwriter. The insured should give full information about the subject to the insured. He should not withhold any information. If a party does act in good faith, the other party is at liberty to cancel the contract.

Insurable interest: Insurable interest means that the insured should have interest in the subject when it is to be insured. He should be benefited by the safe arrival of commodities and he should be prejudiced by loss or damage of goods. The insured may not have an insurable interest at the time of acquiring a marine insurance policy, but he should have a reasonable, expectation of acquiring such interest. The insured must have insurable interest at the time of loss or damage; otherwise he will not be able to claim compensation.

Indemnity: This principle means that the insured will be compensated only to the extent of loss suffered. He will not be allowed to earn profit from marine insurance. The underwriter provides to compensate the insured in cash and not to replace the cargo or the ship. The money value of the subject-matter is decided at the time of taking up the policy. Sometimes the value is calculated at the time of loss also.

 Cause Proxima: This is a Latin word which means the nearest or proximate cause. It helps is deciding the actual cause of loss when a number of causes have contributed to the loss. The immediate cause of loss should be determined to fix the responsibility of the insurer. The remote cause for a loss is not important in determining the liability. If the proximate cause is insured against, the insurer will indemnify the loss.

Warranty: A warranty is a promise by the assured to the underwriter that some thing shall or shall not be done or certain of affairs does or does not arise.

Chapter 6.
Types of Marine Insurance:

The various types of Marine Insurance are as follows:

Cargo Insurance: Cargo insurance caters specifically to the cargo of the ship and also pertains to the belongings of a ships voyagers.

Hull Insurance: Hull insurance mainly caters to the torso and hull of the vessel along with all the articles and pieces of furniture in the ship. This type of marine insurance is mainly taken out by the owner of the ship in order to avoid any loss to the ship in case of any mishaps occurring.

Liability Insurance: Liability insurance is that type of marine insurance where compensation is sought to be provided to any liability occurring on account of a ship crashing or colliding and on account of any other induced attacks. Freight Insurance: Freight insurance offers and provides protection to merchant vessels corporations which stand a chance of losing money in the form of freight in case the cargo is lost due to the ship meeting with an accident. This type of marine insurance solves the problem of companies losing money because of a few unprecedented events and accidents occurring.

Chapter 7.
Marine Insurance Policies:
In addition to these types of marine insurance, there are also various types of marine insurance policies which are offered to the clients by insurance companies so as to provide the clients with flexibility while choosing a marine insurance policy. The availability of a wide array of marine insurance policies gives a client a wide arena to choose from, thus enabling him to get the best deal for his ship and cargo. The different types of marine insurance policies are detailed below:

Voyage Policy: A voyage policy is that kind of marine insurance policy which is valid for a particular voyage. Time Policy: A marine insurance policy which is valid for a specified time period generally valid for a year is classified as a time policy.

Mixed Policy: A marine insurance policy which offers a client the benefit of both time and voyage policy is recognized as a mixed policy.

Open (or) Un-valued Policy: In this type of marine insurance policy, the value of the cargo and consignment is not put down in the policy beforehand. Therefore reimbursement is done only after the loss to the cargo and consignment is inspected and valued.

Valued Policy: A valued marine insurance policy is the opposite of an open marine insurance policy. In this type of policy, the value of the cargo and consignment is ascertained and is mentioned in the policy document beforehand thus making clear about the value of the reimbursements in case of any loss to the cargo and consignment.

Port Risk Policy: This kind of marine insurance policy is taken out in order to ensure the safety of the ship while it is stationed in a port.

Wager Policy: A wager policy is one where there are no fixed terms of reimbursements mentioned. If the insurance company finds the damages worth the claim then the reimbursements are provided, else there is no compensation offered. Also, it has to be noted that a wager policy is not a written insurance policy and as such is not valid in a court of law.

Floating Policy: A marine insurance policy where only the amount of claim is specified and all other details are omitted till the time the ship embarks on its journey, is known as floating policy. For clients who undertake frequent trips of cargo transportation through waters, this is the most ideal and feasible marine insurance policy.

Marine Insurance is an area which involves a lot of thought, straightforward and complex dealings in order to achieve the common ground of payment and receiving. But as much as complex the field is, it is nonetheless interesting and intriguing because it caters to a lot of people and offers a wide range of services and policies to facilitate easy and uncomplicated business transactions. Therefore, in the interest of the clients and the insurance providers, it is beneficial and relevant to have the right kind of marine insurance. It resolves problems not just in the short run, but also in the long run as well.