A marine insurance contract is an
agreement whereby the insurer
undertakes to indemnify the insured
in the manner and to the extent thereby
agreed against marine losses. Marine
insurance provides protection against
loss by marine perils or perils of the sea.
Marine perils are collision of ship with
the rock, or ship attacked by the
enemies, fire and captured by pirates
and actions of the captains and crew of
the ship. These perils cause damage,
destruction or disappearance of the
ship and cargo and non-payment of
freight. So, marine insurance insures
ship hull, cargo and freight. Thus, it is
a device wherein the insurer undertakes
to compensate the owner of a ship or
cargo for complete or partial loss at sea.
The insurer gurantees to make good the
losses due to damage to the ship or cargo
arising out of the risks incidental to sea
voyages. The insurer in this case is known
as the underwriter and a certain sum of
money is paid by the insured in
consideration for the guarantee/
protection he gets. Marine insurance is
slightly different from other types. There
are three things involved i.e., ship or hull,
cargo or goods, and freight.