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Let’s Know what is marine insurance and classification of marine insurance. Let’s discuss it today and learn more about it. Since ancient times, trade has been done by sea. Even today, most of the international trade is done by sea. Various types of dangers can occur during the movement of ships on waterways. Some of the reasons that cause danger in shipping are cyclones, tides and pirate attacks. Today’s boat insurance is the result of many thoughts to protect against such dangers.
Concept of marine insurance
Marine insurance is a type of property insurance. Insurance against loss of property measurable in money is called property insurance. Renowned insurance writer Professor M. N. Mishra (M. N. Mishra) said, “A marine insurance contract is a type of agreement entered into between the insurer and the insured whereby the insurer undertakes to indemnify in accordance with the contract for any loss to the sea-going vessel and the interests connected with it.”
Basically, marine insurance is the promise of indemnification by the insurance company against the risk of property damage and danger to the insured in return for a fixed premium.
Marine insurance is primarily intended for loss due to marine perils, but for the purpose of sea transportation, goods transported by inland waterways or by land to reach the sea are also covered by marine insurance. So it is not the case that the boat insurance will cover only if there is a danger on the sea route. Damage to the contents until the product arrives will be covered by the shipping insurance.
Classification of marine insurance
There are mainly 4 types of marine insurance:
1. ship insurance
Insurance taken against potential loss of merchant ships and associated equipment is called ship insurance.
2. Product insurance
Insurance taken for loss of goods carried in commercial ships is called cargo insurance. Suppose a car is being shipped from Japan. If the vehicle is insured, it will be considered as product insurance.
3. Liability Insurance
If the goods are thrown into the sea to protect the ship from the storm, there is no liability. The insurance which is accepted for this masul loss is called masul insurance. It is a very common type of marine insurance in international trade.
4. Liability insurance
Inadvertently breaking certain regulations at sea can lead to financial loss. Insurance for such losses is called liability insurance. Besides, two ships may collide, sink etc. Liability insurance is available for such damages.
Marine Insurance Key Marine Insurance and Classification of Marine Insurance
Marine Insurance Since 1771, London’s Corporation of Lloyd’s has introduced various types of boat insurance. These are detailed below:
1. sea voyage
Such insurance covers a specific route from one port to another or from one place to another. The insurance company is bound to bear the loss in case of damage to the ship or goods in the said shipping route. In case of any loss outside the specified shipping route, the insurance company will not cover it. There is no provision for compensation other than what is specified in the insurance contract.
2. Time insurance
This type of marine insurance is accepted for a specific period. In case of damage to the insured during this period, the insured is compensated. But any loss after the period mentioned in the contract will not be covered.
3. Mixed Insurance
This insurance document contains the name of the sea route and the specific time. It is known as mixed marine insurance as it contains a combination of both as it mentions sea route and time. In practice, this type of mixed insurance policy is the most widely used.
4. Valued insurance
In the assessed type of insurance, the value of the contents is determined in advance. The pre-determined price is called the insured price. In case of later loss, the amount of loss equal to the insured value is compensated.
5. Undervalued Insurance
In this type of marine insurance, the insured value is not fixed in advance. The equation is, Insured Value = Value of Goods + Freight + Shipping Charges + Insurance Cost. But the pre-determined profit is not added to it. This type of insurance is no longer available.
6. Floating Insurance
Large shipping companies have many ships and they are always moving goods on different routes. Such a shipping company buys a large amount of insurance at once and then determines the amount based on the risk. It requires separate insurance for each ship. It is not suitable for small shipping companies.
7. interest insurance
If the subject matter involves the interest of the insured, it is called an interest policy. There must be an insurable interest in the subject matter as per the terms of marine insurance.
8. Compound risk insurance
Several marine insurance companies jointly undertake this type of insurance in case of very large sums of risk.
9. Joint Insurance
A policy taken out with multiple insurance companies paying different premiums on the contents is called a joint policy. In case of loss, they get money at a proportional rate. The entire amount cannot be recovered separately.
10. Currency insurance
Fluctuations in foreign currency can lead to loss in import and export. An insurance policy in which the value is payable in foreign currency is called a currency insurance policy. For example, paying the same amount of dollars for insurance of Rs. 25,00,0000.
11. Umbrella insurance
This type of insurance covers losses within a specific time and area. This insurance premium is paid at the time of insurance together. If the insured value is more than the value of the goods, then Compensation is paid on a proportionate basis.
12. Port risk insurance
In case of any damage to the ship or goods during the stay within the specified period of time, the insurer accepts the liability. However, under this type of insurance, the insurer does not take responsibility for any loss during sea transportation.
1. Natural Hazards : Sea storms, sinking of ships at sea, collision with floating icebergs, etc.
2. Unnatural Perils : Pirates, enemy, cargo drop, fire, war situation, explosion, etc.
ESSENTIAL TERMS OF MARINE INSURANCE CONTRACT
1. Expressed/Disclosed Terms:
A. Safe travel time
b. Exact date of journey
c. Keep with the guard
d. Declaration of Neutrality of Insured Assets
2. Implicit / Undisclosed Terms :
A. Seaworthiness of the ship
b. Validity of journey
c. Yatra at fixed time
d. Do not change the itinerary
Marine insurance at a glance
A marine insurance contract is a type of contract entered into between the insurer and the insured where the insurer undertakes to indemnify against the loss of the seagoing vessel and its associated interests. Marine insurance is a promise made by an insurance company to indemnify the insured in return for a fixed premium against perils and damages to property quantifiable in money on sea voyages.