chapter4 MARINE INSURANCE

Insurance contract Premium (consideration) Insurer Insured/Assured (Proponent) Promise of payment by the insurer The proposal is the offer. The policy is evidence of the contract. simad

insurance Insurance and assurance: The term insurance refers to events or incidents which may or may not occur, e.g.: fire, theft, accidents and the like. Assurance on the other hand refers to incidents which are bound to or that must happen, for example, death, and old age.

Continue…. The amount of money to be charged for a certain insurance is called the premium. Risk management is the practice of appraising and controlling risk that has evolved as a discrete field of study and practice. The transaction involves the payment to the insurer in exchange for the insurer’s promise to compensate the insured in the case of financial loss.

Cont… Marine insurance, though legally undefined, could generally be understood as insurance aiming to guarantee a maritime risk. Depending on the types of coverage or the subject matter insured, marine insurance can be categorized into hull insurance, cargo insurance, freight insurance, and liability insurance.

Cont… It should also be noted that there are numerous special coverage, such as pollution insurance. The purpose of a hull policy is to cover damage to or loss of a vessel sustained by ship owners. Cargo insurance policies often cover, for the shipper/consignee, the goods from maritime risks.

Cont… Freight insurance comforts the loss of freight by ship owners or any other managers. Liability insurance, on the other hand, indemnifies a vessel owner for liabilities incurred to third persons – these liabilities include personal injury and death, property damage and damage to cargo.

Voyage Policies, Time Policies, and Floating Policies Insurance policies may be classified into voyage, time, and mixed policies depending on the time during which the maritime risks are covered. In a voyage policy, the subject matter of the insurance is covered during a voyage (voyages) from a designated place to another. voyage policy : is were the owner of a ship insures it for a particular journey.

Cont… Insurance obtained to cover risks from one date to another is called a time policy. Time policy covers losses that may occur within a specified period say the 1st January to 31decembber,2018. Time policies do not usually exceed one year.

Cont… Under a mixed policy, the insurance is taken out for certain period of time during a particular journey. mixed policy covers losses on a particular route for a specified period.

Cont… The commencement of risk varies with the type of policies issued. Incase of time policies, we need not worry about as to when risk starts running and comes to an end.

Cont… Consequently, the law does not prescribe any rule relating to the beginning of risk for time policies. The dates set in the policy are more than enough in telling the time when risk starts running and comes to an end.

Cont… Rules relating to the commencement of risk for voyage and mixed policies are, however, provided in the Maritime Code. If hull insurance is taken out for a voyage, the risk runs from the time when the shipment of cargo commences and ends at the termination of unloading provided that the duration of risk may not exceed a period of 15 days after arrival at the destination.

Cont… In case of cargo insurance taken out for a particular voyage, the risk runs from the date when the goods are delivered to the carrier until the time when the goods are delivered to the consignee at the last place of arrival.