Insurance

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Ship or hull insurance: Since the

ship is exposed to many dangers at

sea, the insurance policy is for

indemnifying the insured for losses

caused by damage to the ship.

(b) Cargo insurance: The cargo while

being transported by ship is subject

to many risks. These may be at port

i.e., risk of theft, lost goods or on

voyage etc. Thus, an insurance

policy can be issued to cover against

such risks to cargo.

(c) Freight insurance: If the cargo does

not reach the destination due to

damage or loss in transit, the

shipping company is not paid freight

charges. Freight insurance is for

reimbursing the loss of freight to the

shipping company i.e., the insured.

The fundamental principles of

marine insurance are the same as the

general principles. The main elements

of a marine insurance contract are:

(i) Unlike life insurance, the contract

of marine insurance is a contract of

indemnity. The insured can, in the

event of loss recover the actual

amount of loss from the insurer.

Under no circumstances, the

insured is allowed to make profit

out of the marine insurance

contract. But cargo policies provide

commercial indemnity rather than

strict indemnity. The insurers

promise to indemnify the insured

“in the manner and to the extent

agreed.” In case of ‘Hull Policy’, the

amount insured is fixed at a level

above the current market value;

(ii) Similar to life and fire insurance, the

contract of marine insurance is a

contract of utmost good faith. Both

the insured... (More)

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.

The main elements of a fire insurance contract are:

(i) In fire insurance, the insured must have insurable interest in the subject matter of the insurance. Without insurable interest the contract of insurance is void. In case of fire insurance, unlike life insurance insurable interest must be present both at the time of insurance and at the time of loss. For example, a person has insurable interest in the property he owns, a businessman has insurable interest in his stock, plant, machinery and building, an agent has an insurable interest in the property of his principal, a partner has insurable interest in the property of a partnership firm, and a mortgagee has insurable interest in the property, which is mortgaged.

(ii) Similar to the life insurance contract, the contract of fire insurance is a contract of utmost good faith i.e., uberrimae fidei. The insured should be truthful and honest in giving information to the insurance company regarding the subject matter of the insurance. He is duty-bound to disclose accurately all facts regarding the nature of property and risks attached to it. The insurance company should also disclose the facts of the policy to the proposer.

(iii) The contract of fire insurance is a contract of strict indemnity. The insured can, in the event of loss, recover the actual amount of loss from the insurer. This is subject to the maximum amount for which the subject matter is insured. For example, if a person has insured his house for Rs. 4,00,000... (More)

The fire protection contract is characterized as "an understanding, whereby one gathering as an end-result of a thought embraces to reimburse the other party against budgetary misfortune which the last may continue due to surely characterized topic being harmed or crushed by fire or other characterized hazards up to a concurred sum". 

Fire, to make the insurer liable under the contract, must satisfy two conditions. In the first place, there ought to be genuine fire or start, and second, the fire must be fortuities in its tendency.