Marine Insurance: Overviewdocshare01.docshare.tips/files/17294/172946620.pdf · Marine Insurance...
Transcript of Marine Insurance: Overviewdocshare01.docshare.tips/files/17294/172946620.pdf · Marine Insurance...
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Marine Insurance: Overview • Nature and Scope of Marine Insurance
Contract What is Maritime Perils? The Perils of the Sea
The concept of Marine Adventure
Definition of Marine Insurance Contract
A Slip in Marine Insurance
Rules In India Regarding Marine Insurance
• Classification of Marine Policies Valued Policy Unvalued Policy
Floating Policy
Time Policy
Voyage Policy
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Marine Insurance: Overview
Voyage – Deviation
Types of Marine Insurance
Hull Insurance
Cargo Insurance
Fright Insurance
Liability Insurance
Warranties in Marine insurance
Definition
Effects of Breach of a Warranty
Types of Warranty (3types)
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Marine Insurance: Overview
Loss
Perils insured in a Marine Policy Kinds of Losses
Payment of Claims
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Nature and Scope of Marine Insurance
Contract
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The Marine Insurance is regulated under The Indian
Marine Insurance Act, 1963 (enforced on 1st August,
1963) which is based on the original ‘Marine
Insurance Act, 1906 of U.K.
Marine Insurance has been made mandatory in
export and import business
The document containing the contract of insurance
is known as the ‘Marine Policy’ or ‘Sea Policy’
It essentially provides cover for the losses suffered
due to Marine Perils.
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Nature and Scope of Marine Insurance
Contract
Maritime Perils
“Maritime Perils" means the perils consequent on,
or incidental to, the navigation of the
sea, that is to say, perils of the seas, fire, war
perils, pirates, rovers, thieves, captures,
seizures, restraints and detainments of princes
and peoples, jettisons, barratry and any
other perils
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Above definition is taken from Section 2 (e) under The Marine Insurance Act, 1963
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Nature and Scope of Marine Insurance
Contract The Perils of the Sea
A Peril of the Sea may be defined as to cover
everything that happens to the ship in the course of
voyage by the immediate act of God without the
intervention of human agency
Examples
Foundering at Sea
Shipwreck
Stranding
Collision
shipwrek2.jpgstanded vessel.jpgmumbai.jpg
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Nature and Scope of Marine Insurance
Contract
Losses not regarded as Perils of the Sea
(Excluded Losses)
Wear and Tear
Breakage of Goods
Inherent Vice (defects in goods)
Death of Animals etc due to nature’s causes
Loss by Rats and Vermin
Loss by Delay *
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* As per Section 55 (2) (b) of the English Marine Insurance Act
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Nature and Scope of Marine Insurance
Contract
A contract of marine insurance under Section 3 of The Marine Insurance Act, 1963 is defined as –
“A contract of Marine Insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against marine losses, that is to say, the losses incidental to marine adventure.”
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Nature and Scope of Marine Insurance
Contract
The Marine Adventure
In a contract of marine insurance, what is insured is not the property exposed to peril but only the risk or adventure of the assured.
The Statute therefore states that every lawful marine adventure may be the subject matter of a contract of marine insurance
To be continued in next slide..
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“Marine Adventure" includes any adventure where –
(i) any insurable property is exposed to maritime perils;
(ii) the earnings or acquisition of any freight, passage money, commission, profit or other pecuniary benefit, or the security for any advances, loans, or disbursements is endangered by the exposure of insurable property to maritime perils;
(iii) any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property by reason of maritime perils; ____________________________________________________________________
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Above definition is taken from Section 2 (d) under The Marine Insurance Act, 1963
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Nature and Scope of Marine Insurance
Contract
A Slip in Marine Insurance
A Slip or Cover Note is an informal note or memorandum which is drawn at the time when the contract is entered into.
A Slip itself act as a contract of Insurance. It is a complete and final draft/agreement between the parties in Insurance.
A slip acts as Evidence. It is admissible only to prove the agreement since in practice the slip is never stamped.
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Rules under The Marine Insurance Law
Act, 1963
The contract of Marine insurance acts as an evidence for which it has to be stamped under The Indian Stamp Act, 1899 [1]
The Policy must be signed by the insurer himself [2]
The Subject matter must be designated with reasonable certainty [3]
The nature and extent of the interest of the assured need not be specified [4]
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[1] Rule under Section – 24 of Indian Act
[2] Taken from the English Act Section – 24 (1)
[3] & [4] Under Section – 28 of Indian Act
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Rules under The Marine Insurance Law
Act, 1963 The content of marine policy: [5]
A marine policy must specify: i. the name of the assured or the person who effects the
insurance; ii. the subject matter insured and the risk insured
against; iii. the voyage or the period of time or both iv. the sum or sums insured; and v. the name of the insurer of insurers. ^
The Schedule attached to the Act gives the form in which the policy should be made and also provides the ‘rules for construction of policy’. [6]
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[5] Under Section – 25 of Indian Act ^ The Indian Act Section – 26; [6] Under Section – 32 of Indian Act
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Classification of Marine Policy
Valued Policy
Under this policy the value of loss to be compensated is fixed and remains constant
throughout the risk except where there is fraud
and excessive over – valuation
Unvalued Policy
Under this policy the Value is not determined at
the time of commencement of risk but is left to be
valued when the loss takes place.
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Classification of Marine Policy
Floating Policy
This policy describes the general terms and leaves the amount of each shipment and other particulars to be declared later on. The declaration is made in order of dispatch of shipment.
Time Policy
Under this policy, the subject – matter is insured for a definite period of time. The Policy is generally taken for one year although it may be for less than one year.
Example: From 06:00 hrs of 1st April, 2009 to 06:00 hrs of 30th September, 2009
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Classification of Marine Policy
Voyage Policy
The policy is issued to cover a particular voyage from one port to another and from one place to
another. The policy mentions the port of departure
and the port of destination between which the risks
are generally underwritten.
Note: A Marine Insurance Policy may be a
combination of different policies. It is also
called as Mixed Policy. For e.g., Voyage policy
with Time policy
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Voyage - Deviation
A ship must follow the course specified in a
voyage. If no course is specified, the ship must
follow the usual course for the voyage
Deviation discharges the underwriters from all
liability for subsequent loss (even though it may
not increase the risk) unless it is caused by
circumstances beyond control or is justified on
certain very limited grounds
Unreasonable delay may also amount to deviation
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Types of Marine Insurance
Hull Insurance
Cargo Insurance
Fright Insurance
Liability Insurance
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Warranties in Marine
Insurance Express Warranties
Implied Warranties
No Implied Warranty
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Warranties in Marine
Insurance Express Warranties
Express warranties are those warranties which
are expressly included or incorporated in the
policy by reference
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Warranties in Marine Insurance
Implied Warranties
These are not mentioned at all but are tactically understood by the parties as express warranties
Examples:
Seaworthiness of ship (includes ‘cargo -
worthiness’)
Legality of venture
Non - deviation
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Perils insured in a Marine Policy:
Loss by Fire
Loss by Capture, Seizure or Taking at Sea
Loss by Arrest, Detention
War Risk
Loss Caused by Pirates and Thieves
Barratry
Losses
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Losses
Kinds of Losses
Total Loss
Actual Loss
Constructive Loss
Partial Loss
Partial can either be actual loss or
constructive loss
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Payment of Claims
Notice of Claim
Documents Required for Claim:
i. Policy or certificate of Insurance
ii. Bill of Lading – Determines the scope of the
contract of carriage
iii. Invoice of bill stating terms and conditions of sale
iv. Copy of protest
v. Certificate of Survey
vi. Letter of Subrogation
subrogation form.pdfsubrogation form.pdfsubrogation form.pdfsubrogation form.pdfsubrogation form.pdf