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Marine Insurance
All ship-owners and shipping merchants must insure their property
against losses or damages. They are not legally bound to insure
their own interests
or bound to insure against third party liabilities either. However,
the modern methods of financing, trade and shipping make it essential
that they do so. The capital that is exposed to loss in modern ships
is so huge that no shipping corporation can afford to bear the liability
incurred. Besides, most of the tonnage is mortgaged to banks and
other financial institutions and they require insurance as collateral
security.
What can be Insured
This policy is divided into two sections, Cargo insurance and Hull
insurance.
Under marine cargo, export and import shipments, including air and
registered post as well as goods in transit by rail/ road/ air/ post
can be insured.
Coastal shipment by steamers and shipment by smaller vessels in
Indian waters or by country craft and Indian vessels of all types
can also be insured.
Under marine hull, the hulls, machinery, materials and financial
interests of all ocean-going vessels/ trawlers/ dredgers/ tugs/ salvage
vessels/ launches/ ferry/ steamers/ boats/ yachts/ other pleasure
craft/ self-propelled barges/ lighter craft/ iron cargo boats and
other country craft can be insured.
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Risks covered
The imports/ exports as well as coastal shipments are covered
under three separate clauses under Institute Cargo Clauses A, B
and C
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ICC - A
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ICC - B |
ICC - C |
All risks of loss or damage except those which are specifically
excluded plus malicious damage, piracy |
'C' cover plus earthquake, lightning, washing overboard at sea
/ within lake / river
Total loss of package in unloading or loading |
Fire or explosion, stranding, sinking, etc. Overturning,
derailment (of land conveyance), collision.Discharge of cargo at
port of distress, jettison, sacrifice salvage charges |
Compensation Offered
In event of a loss, this compensation
offered by the policy will be based on
- Actual total loss.
- Constructive total loss.
- General average.
- Particular average (partial loss).
- Expenses payable.
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Exclusions
Except for the risks of piracy and malicious
damage covered under Policy A, excluded risks are common to
all 3 policy types
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Willful conduct of the insured.
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Ordinary
leakage, wear and tear, normal losses in weight or volume
of cargo.
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Insufficient or unsuitability
of packing or preparation of cargo.
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Inherent vice or nature
of cargo.
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Delay, even if delay is an insured risk.
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Insolvency or financial
default of the owners, managers, charterers or operators of the
vessel.
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Unseaworthiness of vessel or craft or unfitness of vessel,
craft, conveyance container or lift can.
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Use of any weapon of
war employing atomic or nuclear fission.
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War and strike risks (including terrorist
damages) are normally excluded yet it is prudent to use the Institute
War Clause or Institute Strike Clause and have the war and strike
risks included.
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