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Presented By:Gourav Mukherjee (11DCP073)
Richa Sethi (11DCP091)
MARINE INSURANCE
Marine Insurance - Definition
Marine Insurance is: A Contract of Indemnity
for a specified consideration (premium)
for specific Risks (winds and waves not included).
Marine Insurance - Definition
Marine insurance will include the insurance of hulls, the cargo they carry, liabilities that may devolve upon ships and ship operators, known as “protection and indemnity” and also the insurance of wharves, ports and harbours, container terminals and even oil platforms and drilling rigs.
- TRAFALGAR INTERNATIONAL LTD.Insurance Brokers and Consultants
Marine Insuranc
e
Hull Insuranc
e
Cargo Insuranc
e
Freight Insuranc
e
Liability Insuranc
e
Types of Marine Insurance
Hull Insurance covers the insurance of the vessel and its equipment i.e. furniture and fittings, machinery, tools, fuel, etc. It is effected generally by the owner of the ship
Types of Marine Insurance
Hull Insurance
Cargo Insurance
Freight Insurance
Liability Insurance
Cargo Insurance includes the cargo or goods contained in the ship and the personal belongings of the crew and passengers
Types of Marine Insurance
Hull Insurance
Cargo Insurance
Freight Insurance
Liability Insurance
Freight Insurance provides protection against the loss of freight. In many cases, the owner of goods is bound to pay freight, under the terms of the contract, only when the goods are safely delivered at the port of destination.
If the ship is lost on the way or the cargo is damaged or stolen, the shipping company loses the freight. Freight insurance is taken to guard against such risk
Types of Marine Insurance
Hull Insurance
Cargo Insurance
Freight Insurance
Liability Insurance
Liability Insurance is one in which the insurer undertakes to indemnify against the loss which the insured may suffer on account of liability to a third party caused by collision of the ship and other similar hazards
Types of Marine Insurance
Hull Insurance
Cargo Insurance
Freight Insurance
Liability Insurance
Basic Risks
Perils of Sea
Fire
Jettison
Barratry
Basic Risks
Perils of Sea
Fire
Jettison
Barratry
Perils of the Sea
These include damage to the vessel or cargo by forces of waves, storms, stranding of the vessel, sinking of the vessel and collision with other vessel, etc.
Basic Risks
Perils of Sea
Fire
Jettison
Barratry
Fire
This includes damage directly due to fire or efforts to extinguish the fire.
Basic Risks
Perils of Sea
Fire
Jettison
Barratry
Jettison
It means voluntary throwing overboard of some cargo to save the ship and the rest of the cargo.
Basic Risks
Perils of Sea
Fire
Jettison
Barratry
The term Barratry includes every wrongful act wilfully committed by the master or crew to the prejudice of the owner, or, as the case may be, the charterer.
In Maritime law, as set out within the British Marine Insurance Act of 1906, it refers to"barratrous conduct"
Types of Losses
Total Loss
Partial Loss
General Average Loss
Particular Average Loss
Types of Losses
Total Loss
Partial Loss
General Average Loss
Particular Average Loss
Total Loss
Total Loss may be either an actual total loss or a constructive total loss.
Actual Total Loss - In this type of a loss, the goods insured are destroyed or damaged as to cease to be a thing of the kind insured, or where the assured is irretrievably deprived.
Constructive Total Loss – This is the loss which appears to be unavoidable or because it could not be preserved from actual loss without an expenditure which would exceed their value when the expenditure had been incurred.
Types of Losses
Total Loss
Partial Loss
General Average Loss
Particular Average Loss
Partial Loss
Partial Loss is defined as a loss other than the total loss.
It may include particular average loss or general average loss.
Types of Losses
Total Loss
Partial Loss
General Average Loss
Particular Average Loss
General Average Loss
In time of general peril an extraordinary sacrifice or expenditure may be made or incurred for the purpose of preserving the properties in common. Examples of general average sacrifice are:
1. Cargo Jettisoning2. Damage caused by fire/attempt to
extinguish fire.3. Expenses of entering and leaving
the port of refuge.4. Expenses of discharging, storing
and reloading of the cargo if that be necessary for the common safety.
Types of Losses
Total Loss
Partial Loss
General Average Loss
Particular Average Loss
Particular Average Loss
A particular average loss is a partial loss of the goods insured, caused by a peril insured against, and which is not a general average loss.
While the general average loss is voluntarily undertaken for the common safety of all the parties insured, a particular average loss is fortuitous or accidental. It cannot be partially shifted to others but has to be borne by the person directly affected.
Types of Losses- Summary
Marine Loss
Total Loss
Actual Total Loss
Constructive Total Loss
Partial Loss
Particular Average
Loss
General Average
Loss
Risks Covered
Institute Cargo Clause (C)
Institute Cargo Clause (B)
Institute Cargo Clause (A)
War and SRCC Cover
Risks Covered
Institute Cargo Clause (C)
Institute Cargo Clause (B)
Institute Cargo Clause (A)
War and SRCC Cover
Fire or Explosion. Standing, grounding, sinking
or capsizing of the vessel. Overturning or derailment of
land conveyance. Collision or contact of vessel. Discharge of cargo at a port
of distress Jettison
Risks Covered
Institute Cargo Clause (C)
Institute Cargo Clause (B)
Institute Cargo Clause (A)
War and SRCC Cover
Loss or damage attributable to earthquake, volcanic eruption of lightning.
Washing overboard. Loss or damage to the goods
caused by entry of sea, lake or river into vessel, container or van etc.
Total loss of any package lost overboard or dropped whilst loading on to or unloading from vessel.
Risks Covered
Institute Cargo Clause (C)
Institute Cargo Clause (B)
Institute Cargo Clause (A)
War and SRCC Cover
By paying extra following can be including in Clause (B):- Theft, pilferage or non-
delivery. Rain water damage. Hook, oil, mud, acid and
damage by other cargo. Heating and sweating. Leakage.
Risks Covered
Institute Cargo Clause (C)
Institute Cargo Clause (B)
Institute Cargo Clause (A)
War and SRCC Cover
All risks except war, strike, riots or civil commotion
Risks Covered
Institute Cargo Clause (C)
Institute Cargo Clause (B)
Institute Cargo Clause (A)
War and SRCC Cover
Cover for war, strike, riots or civil commotion along with any of the above clauses
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour policy
Marine Insurance Policies
Marine Insurance Policies
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour Policy
Voyage Policy is a policy in which the subject matter is insured for a particular voyage irrespective of the time involved in it. In this case the risk attaches only when the ship starts on the voyage.
Marine Insurance Policies
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour Policy
Time Policy is a policy in which the subject matter is insured for a definite period of time. The ship may pursue any course it likes, the policy would cover all the risks from perils of the sea for the stated period of time. • A time policy cannot be for a period exceeding one year, but it may contain a 'continuation clause'.
• The 'continuation clause' means that if the voyage is not completed within the specified period, the risk shall be covered until the voyage is completed, or till the arrival of the ship at the port of call.
Marine Insurance Policies
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour Policy
Mixed policy is a combination of voyage and time policies and covers the risk during particular voyage for a specified period of time.
Mixed policy = Voyage Policy + Time Policy
Valued policy is a policy in which the value of the subject matter insured is agreed upon between the insurer and the insured and it is specified in the policy itself.
Marine Insurance Policies
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour Policy
Marine Insurance Policies
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour Policy
Open or Un-valued policy is the policy in which the value of the subject matter insured is not specified.
Subject to the limit of the sum assured, it leaves the value of the loss to be subsequently ascertained.
Marine Insurance Policies
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour Policy
Floating Policy is a policy which only mentions the amount for which the insurance is taken out and leaves the name of the ship(s) and other particulars to be defined by subsequent declarations.
Such policies are very useful to merchants who regularly despatch goods through ships.
Marine Insurance Policies
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour Policy
Wagering or Honour Policy is a policy in which the assured has no insurable interest and the underwriter is prepared to dispense with the insurable interest.
Such policies are also known as ‘Policy Proof of Interest’(P.P.I).
Marine Insurance Policies
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-Valued Policy
Floating Policy
Wagering or Honour Policy
Contents of the Policy The name of the assured or of
some person who affects the
insurance on his behalf.
The subject matter insured
and risk insured against.
The voyage or period of time
both.
The sum or sums insured.
The name or names of
insurer or insurers.
Risks Not Covered
Loss, damage or expense caused by delay and inherent vice or nature of the subject matter.
Loss, damage or expense caused by willful misconduct of the insured.
Ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of subject matter insured.
Insufficiency or unsuitability of packing. Deliberate damage to or deliberate destruction of goods. Loss due to insolvency or financial default of the owners,
managers, charters or operators of the vessel, Loss or damage arising from nuclear weapon or other
radioactive force.
Warehouse to Warehouse Clause
Warehouse to Warehouse clause states that the goods are insured from the time they leave the warehouse of the exporter and remains in force till the goods reach the goods reach the destination and are stored in a warehouse there.
But on the ship reaching the destination, if the goods cannot be taken delivery of due to reason beyond the control of the consignee, the insurance will be valid for 60 days from the date of arrival of the ship after which it expires.
Warehouse to Warehouse Clause
Thus the insurance will expire on the goods being placed in a godown in the importer’s country or on expiry of 60 days from the date of arrival of the ship whichever is earlier.
The period of 60 days is allowed only in cases where the delay is beyond the control of the importer.
Give a notice of loss to the insurance company immediately.
Take all steps to minimize the loss, preserve all rights against third parties.
Arrange for survey by ship surveyors if the packages show any outward sign of damage.
Arrange for insurance survey by the insurance company in other cases.
Prefer claims with shipping companies and other parties where required.
Submit insurance policy, copy bill of lading, invoice, packing list and claim bill.
Claim Procedure
Types of Marine Insurance- Hull, Cargo, Freight and Liability
Risks Covered- Institute Cargo Clause (C), Institute Cargo Clause (B), Institute Cargo Clause (A), War and SRCC Cover
Basic Risks- Perils of Sea, Fire, Jettison and Barratry
Marine Insurance Policies- Voyage, Time, Mixed, Valued, Open or Un-Valued, Floating and Wagering or Honour Policy
To Summarize
Marine Hull Insurance
Premium RatingThe normal basis of valuation for ocean/air consignment will be CIF + incidentals up to a percentage which is agreed upon at the inception of the policy ( normally this is 10 %)
United India Insurance
Marine Hull InsuranceFor example, Insurance Amount- $40,000Cover Percent- 110% (10% included for
recovery charges for the claims)Total Amount= 110%*40,000= $44,000
United India Insurance