Marine Insurance
Marine Insurance
2
Notes
MARINE INSURANCE
2.0 INTRODUCTION
This is the oldest branch of Insurance and is closely linked to
the practice of Bottomry which has been referred to in the
ancient records of Babylonians and the code of Hammurabi
way back in B.C.2250. Manufacturers of goods advanced their
material to traders who gave them receipts for the materials
and a rate of interest was agreed upon. If the trader was robbed
during the journey, he would be freed from the debt but if he
came back, he would pay both the value of the materials and
the interest.
The first known Marine Insurance agreement was executed in
Genoa on 13/10/1347 and marine Insurance was legally
regulated in 1369 there.
Marine Insurance
Cargo Hull
2.1 OBJECTIVES
z Know the meaning of Marine insurance
z Buy the Marine insurance
z Settle the claim under Marine Insurance
z Know the inland transit/overseas transit.
z Know what is not covered under Marine insurance
Buyer Seller
A) Submission of form
B) Quotation from the Insurance Company
C) Payment of Premium
D) Issue of cover note/Policy
A) Submission of form
a) The form will have the following information:
a) Name of the shipper or consignor (the insured).
b) Full description of goods to be insured: The nature
of the commodity to be insured is important for rating
and underwriting. Different types of commodities are
susceptible for different types of damage during
transit- sugar, cement, etc are easily damaged by sea
water; cotton is liable to catch fire; liquid cargoes are
susceptible to the risk of leakage and crockery,
glassware to breakage; electronic items are exposed
to the risk of theft, and so on.
c) Method and type of packing: The possibility of loss
or damage depends on this factor. Generally, goods
are packed in bales or bags, cases or bundles, crates,
drums or barrels, loose packing, paper or cardboard
cartons, or in bulk etc.
d) Voyage and Mode of Transit: Information will be
required on the following points :
i. the name of the place from where transit will
commence and the name of the place where it is to
terminate.
ii. mode of conveyance to be used in transporting goods,
(i.e.) whether by rail, lorry, air, etc., or a combination
of two or more of these. The name of the vessel is to
be given when an overseas voyage is involved. In land
C) Payment of premium:
On accepting the premium rates, the concerned person
will make the payment to the insurance company. The
payment can be made on the consignment basis.
2.9 SUMMARY
Marine insurance deals with goods when these are being
moved from one place to another by approved mode of
transportation. The goods can be moved within the country
and outside the country. The risks are involved in any type of
transportation and to cover these risks marine (transit)
insurance is developed. The risk coverage depends upon the
nature of goods and packing and to cover the risks the price is
to be paid which is known as premium. The consignment can
be single or multiple and accordingly the marine insurance
policy i.e single transit or open cover or open policy is issued
by the insurance company. The risk coverage is defined by
Institute of London Underwriters under the various clause
ICC (A), (B), (C) and the same is acceptable to all throughout
2.1
1. A person who is having insurable interest at the time of
loss.
Notes
2. The seller is responsible to take the insurance.
2.2
1. There are three types i.e ICC (A),or (B) or (C)
2. Yes, the recoveries can be made by the insurer from the
carriers.
1. c, 2. b, 3. b, 4. b,
5. b, 6. c, 7. b, 8. a,
9. c, 10.c