process of marine insurance

Advertisement A contract of marine insurance is an agreement whereby the insurer covers against losses incidental to marine adventure.

There is a marine adventure when any insurable property is exposed to maritime perils i.e. perils consequent to navigation of the sea. The term 'perils of the sea' refers only to accidents or casualities of the sea, and does not include the ordinary action of the winds and waves. Besides, maritime perils include, fire, warperils, pirates, seizures and jettison, etc.

There are Four 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.
Cargo Insurance - includes the cargo or goods contained in the ship and the personal belongings of the crew and passengers.
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.
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.
In a contract of marine insurance, the insured must have insurable interest in the subject matter insured at the time of the loss. Insurable interest is not required to be present at the time of taking the policy. Under marine insurance, the following persons are deemed to have insurable interest :

The owner of the ship has an insurable interest in the ship.
The owner of the cargo has insurable interest in the cargo.
A creditor who has advanced money on the security of the ship or cargo has insurable interest to the extent of his loan.
The master and crew of the ship have insurable interest in respect of their wages.
If the subject matter of insurance is mortgaged, the mortgagor has insurable interest in the full value thereof, and the mortgagee has insurable interest in respect of any sum due to him.
A trustee holding any property in trust has insurable interest in such property.

In case of advance freight the person advancing the freight has an insurable interest in so far as such freight is repayable in case of loss.
The insured has an insurable interest in the charges of any insurance policy which he may take. Advertisement