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MARINE INSURANCE
FOR BANKERS


R . GANATRA
M.A.,M.COM., LL.M., F.I.I.I., D.M.M.T.
MARIRAJ ASSOCIATES
098211 40676
grajkal@yahoo.co.in
`

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MARINE INSURANCE
1. Introduction

2. Scope of Cover & Exclusions

3. Warehouse to Warehouse Clause

4. Claim Procedure/Documents

5. UCPDC 600 & Marine Insurance
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MEANING
INSURANCE OF
GOODS IN TRANSIT BY VARIOUS MODES OF
TRANSPORT [Cargo Insurance]
SHIPS CARRYING CARGO/GOODS [Hull
Insurance]
SHIPS DURING CONSTRUCTION (HULL Insurance)
SHIPS DURING BREAKAGE [Hull Insurance]
FREIGHT INSURANCE [Hull Insurance]
CERTAIN LIABILITIES E.G. COLLISION LIABILITY
[Cargo/Hull Insurance
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INTERNATIONAL
THE TERMS AND CONDITIONS CALLED
CLAUSES ARE INTERNATIONAL IN
CHARACTER- DRAFTED BY INSTITUTE
OF LONDON UNDERWRITERS AND VERY
WIDELY FOLLOWED.
OTHER CLAUSES BY AMERICAN AND
DUETCH UNDERWRITERS.

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AGREED VALUE
AGAINST MARKET VALUE & RE-
INSTATEMENT / REPLACEMENT
VALUEFOLLOWED IN OTHER
BRANCHES, MARINE POLICY IS
AGREED VALUE POLICY.
VALUE ONCE AGREED FINAL.
CIF + 10% INTERNATIONAL NORMS.

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INSURABLE INTEREST -1
INSURABLE INTEREST IS DIRECT
RELATIONSHIP WITH PROPERTY /
PERSON OF SUCH A NATURE THAT
IF THAT PROPERTY OR PERSON
SUFFERS LOSS THE HOLDER OF I.I.
SUFFERS FINANCIAL LOSS.

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INSURABLE INTEREST- 2
I.I. DEPENDS UPON TERMS OF SALE
INCOTERMS 2010 AND SALES OF
GOODS ACT.
UNDER INCOTERMS PASSING OF
RISK IS IMPORTANT, INSURABLE
INTEREST PASSES WITH THE RISK
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INSURABLE INTEREST - 3
EX- W BUYERS INSURABLE INTEREST
FOB/FCA- BUYER + SELLER.
CIF- BUYER OR SELLER, WHETHER
MONEY PAID OR NOT. UPTO CIF PLACE
ONLY.
ASSIGNMENT- CARGO POLICIES
GENERALLY FREELY ASSIGNABLE.

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ASSIGNMENT
POLICY CAN BE ASSIGNED EVEN AFTER
LOSS IF THERE IS PRIOR AGREEMENT.
ASSIGNMENT VS. NEGOTIATION.
ASSIGNEE DOES NOT GET BETTER
RIGHTS, BREACH OF WARRANTY
EFFECTIVE AGAINST BUYER ALSO.

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EXCESS
THE AMOUNT WHICH IS TO BE
DEDUCTED FROM EACH AND EVERY
LOSS.
IF L/C SPECIFIES IRRESPECTIVE OF
PERCENTAGE THEN EXCESS NOT TO
BE ACCEPTED, OTHERWISE AS PER
UCPDC 600 EXCESS MAY BE ACCEPTED.
EXCESS GIVES DEDUCTION IN PREMIUM.

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ECGC VS. MARINE POLICIES
MARINE POLICIES COVER LOSS OR
DAMAGE TO THE CARGO.
MERE NON PAYMENT BY BUYER NOT
COVERED.
ECGC POLICIES COVER NON PAYMENT
DUE TO ECONOMIC AND POLITICAL
REASONS.
BOTH ARE COMPELMENTARY.

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INSTITUTE CARGO CLAUSES
SEA TRANSIT

I.C.C. (C)
I.C.C. ( B)
I.C.C.( A)
AIR TRANSIT

= xxx
= xxx
I.C.C.(A.C.)
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LOSS/ DAMAGE TO CARGO ;
1) FIRE/ EXPLOSION
2) STRANDING,GROUNDING,SINKING,CAPSIZING OF THE
VESSEL/CRAFT
3) OVERTURNING/ DERAILMENT OF LAND CONVEYANCE
4) COLLISION/ CONTACT WITH EXTERNAL OBJECTOTHER
THAN WATER
5) DISCHARGE OF CARGO AT PORT OF DISTRESS
6) GENERAL AVERAGE SACRIFICE
7) JETTISON
II G.A. CONTRIBUTION SALAVAGE CHARGES
III LIABILITY UNDER BOTH TO BLAME COLLISION
CLAUSE



I.C.C.( C) COVERAGE
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ICC(B) COVERAGE
1 TO 7 O I.C.C.(C)
8 EARTHQUAKE, VOLCANIC ERUOPTION OR
LIGHTNING
9. ENTRY OF SEA, LAKE OR RIVER WATER INTO
VESSEL CRAFT HOLD CONVEYANCE
CONTAINER LIFTVAN OR PLACE OF
STORAGE
10. TOTAL LOSS OF ANY PACKAGE LOST
OVERBOARD OR DROPPED WHILST LOADING
ON TO OR UNLOADING FROM VESSEL OR
CRAFT
11. WASHING OVERBOARD


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Institute Cargo Clauses
Extraneous perils
TPND
Fresh water / rainwater damage.
Hook/ oil damage.
Heating & sweating.
Mud, acid and other damages.
Breakage.
Leakage.
Country damage.
Bursting/ tearing of bags.
Contamination.
Etc.,

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I.C.C.(A) COVERAGE
1 TO 7 OF I.C.C.(C)
8 TO 11 OF I.C.C.(B)
+ ALL OTHER RISKS WHICH GIVE RISE
TO PHYSICAL LOSS/ DAMAGE TO
CARGO &
ARE NOT SPECIFICALLY EXCLUDED

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GENERAL EXCLUSIONS-1
Willful misconduct.
Ordinary losses.
Insufficient packing.
Inherent vice
Delay
Financial default of shipping co / airlines.
Nuclear losses.
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GENERAL EXCLUSIONS -2
War perils
Strikes, terrorism perils.
Malicious / deliberate damage (only under
ICC ( C ) & ICC ( B ).
Un seaworthiness/ unfitness of the
carrying vessel with privy/ knowledge of
the exporter.

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INLAND TRANSIT CLAUSES(ITC)
RISKS COVERED
PHYSICAL LOSS OR DAMAGE TO GOODS.
CLAUSES( C)
I. FIRE
II. LIGHTNING
CLASUES (B)
III. BREAKAGE OF BRIDGES
IV. COLLISSION WITH/BY CARRYING VEHICLE
V. OVERTURNING OF CARRYING VEHICLE
VI. DERAILMENT OR ACCIDENT OF LIKE NATURE TO
CARRYING WAGON/VEHICLE
CLAUSES(A)
VII. ALL OTHER RISKS WHICH ARE NOT EXCLUDED.

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EXCLUSIONS
WILFUL MISCONDUCT OF THE ASSURED
ORDINARY LOSSES
INSUFFICIENCY OF PACKING /PREPARATION
INHERENT VICE
DELAY, EVEN IF CAUSED BY INSURED PERIL
NUCLEAR LOSSES
WAR AND ALLIED PERILS
STRIKES AND ALLIED PERILS
ADDITIONAL EXCLUSIONS:
MALICIOUS DAMAGE
EXTENSIONS AVAILABLE
MALICIOUS DAMAGE(ITCB,C)
S.R.C.C.(ALL)
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Inland transit Clauses- duration
Ware house to ware house
After reaching final destination town/ city
7 days maximum
If earlier policy is over earlier.
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MARINE UNDERWRITING
PAYMENT OF PREMIUM
Premium on exports/ import to be paid in foreign
currency- exceptions for Indian Residents:
Exports: insurance as per sales contract,
undertaking to recover full price.
Imports: insurance as per sales contract,
undertaking to get licence endorsed.
Between two foreign countries: If Indian acting as
mercantile agent.
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CLAIMS
MANAGEMENT
R.GANATRA
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LAWS APPLICABLE IN INDIA
1. THE INDIAN CONTRACT ACT 1869
2. THE MARINE INSURANCE ACT 1963
3. THE INSURANCE ACT 1938
4. INSURANCE RULES 1939
5. THE CARRIAGE BY ROAD ACT 2007
6. RAILWAYS ACT 1989
7. CARRAIGE OF GOODS BY SEA ACT 1925
8. MULTIMODAL TRANSPORT OF GOODS ACT 1993
9. CARRAIGE BY AIR ACT 2007
10. AIRCRAFT ACT 1934
11. THE INDIAN PORTS ACT 1906- & BYE LAWS
12. MAJOR PORT TRUSTS ACT 1963
13. MERCHANT SHIPPING ACT 1958
14. CUSTOMS ACT 1962
15. INDIAN POST OFFICE ACT 1838 & GUIDE
16. THE INDIAN STAMPS ACT 1899
17. GIM OF RBI
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CLAIM PROCEDURE
Intimation of loss - Carriers/ Bailees
- Insurance Company
Survey - Ship Survey
- Insurance Survey
Loss Minimisation
Claim on Carriers/ Bailees
Time Limits
Claim Documents

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CLAIM DOCUMENTS
Proof of insurance
Shipping documents
Documents to prove loss/ damage
Proof of loss minimising expenses
Forwarding/ clearance documents
Claim on carriers/bailees
Other documents as required
Claim bill

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TABLE OF TIME LIMITS(1)
AGENCY NOTICE OF CLAIM LODGEMENT OF
CLAIM
SUIT BAR
STEAMER 3 DAYS IMMDLY 1 YEAR
M.T.O. IMMDLY 6 DAYS 9 MONTHS
PORTS 7 DAYS 6 MONTHS 6 MONTHS
AIRLINES
DOMESTIC
DAMAGE IMMDLY 7 DAYS 2 YEARS
NON.DEL IMMDLY 14 DAYS 2 YEARS
NOTE: TIME LIMITS FROM DATE OF DELIVERY
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TABLE OF TIME LIMITS (2)
AGENCY NOTICE OF CLAIM LODGEMENT OF
CLAIM
SUIT BAR
AIRLINES
INTERNATIONAL
DAMAGE IMMDLY 14 DAYS 2 YEARS
NON DEL IMMDLY 21 DAYS 2 YEARS
ROAD WAYS IMMDLY 180 DAYS FROM
DATE OF L.R.
3 YEARS FROM
DATE OF L.R.
RAIL WAYS IMMDLY 6 MONTHS FROM
DATE OF R/R)
3 YEARS FROM
DATE OF R.R.
NOTE: TIME LIMITS FROM DATE OF DELIVERY
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UCP600 ARTICLE 28-a
a. An insurance document, such as an
insurance policy, an insurance
certificate or a declaration under an
open cover, must appear to be issued
and signed by an insurance company,
an underwriter or their agents or their
proxies. (issued by proper person)
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UCP 600 28 a, b
Any signature by an agent or proxy
must indicate whether the agent or
proxy has signed for or on behalf of the
insurance company or underwriter.
(signatory to write capacity)
b. When the insurance document
indicates that it has been issued in
more than one original, all originals
must be presented. (no of originals)
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UCP 600 28 c ,d, e

c. Cover notes will not be accepted. (no C/N)
d. An insurance policy is acceptable in lieu of an
insurance certificate or a declaration under an
open cover ( Policy acceptable)
e. The date of the insurance document must be
no later than the date of shipment, unless it
appears from the insurance document that the
cover is effective from a date not later than the
date of shipment. (date of cover prior to
shipment)

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UCP 600 28 f i ,ii
f. i. The insurance document must
indicate the amount of insurance
coverage and be in the same currency as
the credit. (insurance currency &
amount)
ii. A requirement in the credit for
insurance coverage to be for a
percentage of the value of the goods, of
the invoice value or similar is deemed to
be the minimum amount of coverage
required.(Minimum sum insured)
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UCP 600 28 f ii (cont)

If there is no indication in the credit of
the insurance coverage required, the
amount of insurance coverage must be
at least 110% of the CIF or CIP value of
the goods ( CIF/CIP + 10%)

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UCP 600 28 f ii (cont)
When the CIF or CIP value
cannot be determined from the
documents, the amount of
insurance coverage must be
calculated on the basis of the
amount for which honour or
negotiation is requested or the
gross value of the goods as shown
on the invoice, whichever is
greater. (OR Invoice Value)
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UCP 600 28 f iii
iii. The insurance document must
indicate that risks are covered at least
between the place of taking in charge or
shipment and the place of discharge or
final destination as stated in the credit. (
Min Cover between shipment place and
port of discharge)



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UCP 600 28 g
g. A credit should state the type of
insurance required and, if any, the
additional risks to be covered. An
insurance document will be accepted
without regard to any risks that are not
covered if the credit uses imprecise
terms such as "usual risks" or
"customary risks". (precise cover)

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UCP 600 28 h
h. When a credit requires insurance
against "all risks" and an insurance
document is presented containing any
"all risks" notation or clause, whether or
not bearing the heading "all risks", the
insurance document will be accepted
without regard to any risks stated to be
excluded. ( All Risks a misnomer)

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UCP 600 28 i, j
i. An insurance document may contain
reference to any exclusion clause.
(Exclusions allowed)
j. An insurance document may indicate
that the cover is subject to a franchise
or excess (deductible allowed ).

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SUMMARY OF ARTICLE 28
Insurance document issued by proper person.
Signatory to write capacity.
All originals to be presented .
Cover note not to be accepted.
Policy can be accepted under open cover.
Date of cover prior to shipment.
Insurance currency and amount as per L/C.
Minimum sum insured.
CIF/CIP+10% Or Invoice value +10%.
Places of cover.
Precise description of cover.
All Risks misnomer.
Exclusions/ deductibles allowed.



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Thank you