Marine being worlds oldest type of insurance and may be called as a flag ship of Insurance industry, Marine Insurance covers the risk associated with transit of material between one place to another. The Marine Insurance primarily and for the very first time being used for the sea voyage transits.
Definition : Insurance against loss by damage to or destruction of cargo or the means or instruments of its transportation whether on land, sea, or air
Types of Marine Insurance
a) Marine Open Policy
b) Marine Specific Voyage Policy
c) Marine Turnover Policy
Who Can Buy The Insurance
The Marine Insurance Act contains a very clear definition of insurable interest. It states that there must be a physical object exposed to marine perils and that the insured must have some legal relationship to the object, in consequence of which he benefits by its preservation and is prejudiced by loss or damage happening to it or where he may incur liability in respect thereof.
Important :
Unless like the normal indemnity policy of other classes of insurance, a marine cargo policy is freely assignable either before or after loss provided of course the assignee has acquired insurable interest.
FEATURES OF MARINE INSURANCE
a) Offer & Acceptance: It is a prerequisite to any contract. Similarly, the goods under marine (transit) insurance will be insured after the offer is accepted by the insurance company.
b) Payment of premium: An owner must ensure that the premium is paid well in advance so that the risk can be covered
c) Contract of Indemnity: Marine insurance is contract of indemnity and the insurance company is liable only to the extent of actual loss suffered.
d) Utmost good faith: The owner of goods to be transported must disclose all the relevant information to the insurance company while insuring their goods.
e) Insurable Interest: The marine insurance will be valid if the person is having insurable interest at the time of loss.
f) Contribution: If a person insures his goods with two insurance companies, then in case of marine loss both the insurance companies will pay the loss to the owner proportionately.
g) Period of marine Insurance: The period of insurance in the policy is for the normal time taken for a transit. Generally, the period of open marine insurance will not exceed one year.
h) Deliberate Act: If goods are damaged or loss occurs during transit because of deliberate act of an owner then that damage or loss will not be covered under the policy.
i) Claims: To get the compensation under marine insurance the owner must inform the insurance company immediately so that the insurance company can take necessary steps to determine the loss.
OPERATION OF MARINE INSURANCE Marine insurance plays an important role in domestic trade as well as in international trade. Most contracts of sale require that the goods must be covered, either by the seller or the buyer, against loss or damage.