Marine Insurance

 

	Marine Cargo Insurance
	Marine Hull Insurance
	Goods In Transit Insurance

 

MARINE CARGO INSURANCE

This insurance covers the risks of loss, damage, expenses and liability to goods insured during transportation from one place to another, anywhere in the world. Coverage is usually effected on a "per voyage" basis i.e. from the time the goods leave the premises of the seller till the time they finally arrive at the buyer's premises. There is no period specified in the policy. Coverage can either be effected by the buyer or the seller depending on the Contract of Sales.

The process of transportation includes air freight, ocean freight and overland carriage. The marine cargo insurance is to indemnify the cargo owner and or the financiers such as banks against financial loss arising as a result of physical loss, damage, expenses incurred or liability from the transportation process.

Loss can arise from the perils of the sea such as rough weather, sinking, stranding and collision of the ocean vessel and from fire explosion. Loss can also arise from mishandling, theft, pilferage, non-delivery at the ports or as a result of overturning, collision of and or theft from overland transports.

The insurance policy form and coverage are based on the internationally accepted London wordings. For general cargo by sea, three sets of clauses are available known as the Institute Cargo Clauses 'A' 'B' and 'C', descending in scope of cover and a brief summary is below:-

TYPE OF COVER
INSTITUE CARGO CLAUSES (A), (B) & (C) CLAUSE SUMMARY CHART - RISK COVERED/EXCLUDED
RISKS	A Clauses	B Clauses	B Clauses
Fire or Explosion	0	0	0
Vessel/Craft being Stranded, Grounded, sunk or capsized	0	0	0
Overturning or derailment of land conveyance	0	0	0
Collision or contact of vessel, craft or Conveyance with external object other than water	0	0	0
Discharge of cargo at a port of distress	0	0	0
Earthquake, volcanic eruption or lightning	0	0	X
General Average sacrifice	0	0	0
Jettison	0	0	0
Washing Overboard	0	0	X
Entry of sea, lake or river water into vessel, craft,Hold, conveyance, container, liftvan or place of Storage	0	0	X
Total loss of any package lost overboard or Dropped whilst loading on to or unloading from Vessel or craft	0	0	X
General Average and salvage charges, Sue & Labour charges	0	0	0
Pirates, Thieves and non-delivery	0	X	X
Rough handling	0	X	X
Contamination	0	X	X
GENERAL EXCLUSION
Willful misconduct of the Assured	X	X	X
Ordinary leakage, loss in weight, wear and tear	X	X	X
Insufficiency or unsuitability of packing	X	X	X
Inherent vice or nature of the subject matter insured.	X	X	X
Unseaworthiness of vessel (when the Assured is Privy to it)	X	X	X
Delay even though caused by a risk insured against	X	X	X
Insolvency on financial default of carrier	X	X	X
Deliberate damage or destruction of the subject Matter insured.	0	X	X
Use of nuclear weapons	X	X	X
War & Strikes	X	X	X
Key 0 - Covered X - Not Covered

 

MARINE HULL INSURANCE

The insurance is designed to indemnify the shipowner against loss of or damage to ship and liability of shipowner arising from maritime perils which include perils of the sea such as heavy weather, stranding or collision and other similar perils.

The Institute of London Underwriters publishes several sets of standard Hull Clauses for use with the policy coverage. These Hull Clauses are most widely used. For the insurance of ships on a time basis, the policy would be, normally, effected for a period of twelve months: these are known as the Institute Time Clauses (Hulls). For the insurance of ships on a voyage basis, these are known as the Institute Voyage Clauses (Hulls). Both clauses cover only those perils specified in the clauses.

The cover for loss of or damage to the ship is extended to embrace collision liability, subject to a limit of three fourths of the liability or three fourths of the insured value, whichever is the less. This cover, which is additional to any other claim attaching to the policy, relates solely to legal liability incurred by the assured in consequence of collision whereby losses are suffered by the other ship, or by property thereon, for which the insured ship is wholly or partly at fault.

GOODS IN TRANSIT INSURANCE


This insurance provides coverage for goods being transported over land only from one place to another. The scope of coverage is restricted to Fire, Theft or Accidental Means and subject to Express Exclusions of the Policy.

Cover commences from the time goods leave the place of warehouse continues during the ordinary course of transit and terminates upon delivery at destination. Temporary storage during ordinary course of transit and the process of loading and unloading are also covered.

 

Notes on Policy arrangement
There are three methods of issuing a Good In Transit Policy :

1. A voyage policy may be issued for a single transit. Premium is charged for the insured transit and cover terminates upon delivery at destination.

2. A time policy may be issued specifying the limit anyone transit/conveyance. Provisional premium is charged at inception based on rate applied to total estimated carryings. This provisional premium will be adjusted at end of period of insurance at rate on actual total carryings as declared by Insured. The Insurers maximum liability would be the actual loss or specified limit anyone carrying on the policy.

3. A policy may be issued based on Limit of Liability representing the total/aggregate value of transits during the period of insurance. After a claim, the Limit of Liability is diminished by the amount of claim made until the total Limit of Liability is exhausted.. The Insured may choose to include a reinstatement of loss clause to maintain for the full Limit of Liability after a loss. The Insured shall be liable to pay an additional premium at the rate of the policy calculated on the amount of loss on a pro-rata basis from the date of such loss to the expiry of the current period of insurance.

 

Major Policy Exclusions
1. War risks and Nuclear risks
2. Wear, tear and depreciation
3. Temporarily housed in the course of transit for the purpose of storage making up packing or processing .
4. Specific Goods as listed in the policy.
5. Dishonest act, theft or pilferage by any employee of the Insured.