Podcast
Questions and Answers
What is the primary purpose of marine insurance?
What is the primary purpose of marine insurance?
- To protect the interests of shipping companies
- To facilitate international trade
- To ensure timely delivery of shipments
- To provide coverage for goods during transportation (correct)
In the given example, how will Insurance Companies A and B contribute in case of a loss?
In the given example, how will Insurance Companies A and B contribute in case of a loss?
- Company B will bear the entire loss
- Company A will bear the entire loss
- The loss will be borne by the company with a higher premium
- The loss will be shared equally between the two companies (correct)
What is the typical maximum period for an open marine insurance policy?
What is the typical maximum period for an open marine insurance policy?
- 1 year (correct)
- 6 months
- There is no maximum period specified
- 2 years
If goods are damaged due to a deliberate act by the owner, will the loss be covered under the marine insurance policy?
If goods are damaged due to a deliberate act by the owner, will the loss be covered under the marine insurance policy?
What is the first step the owner should take to get compensation under a marine insurance policy in case of a loss?
What is the first step the owner should take to get compensation under a marine insurance policy in case of a loss?
Which of the following types of shipments are typically covered under a marine cargo policy?
Which of the following types of shipments are typically covered under a marine cargo policy?
What is the primary purpose of the 'Reference Study' section provided in the text?
What is the primary purpose of the 'Reference Study' section provided in the text?
Which of the following statements is true about marine insurance?
Which of the following statements is true about marine insurance?
Which of the following modes of transportation are typically covered under a marine cargo policy?
Which of the following modes of transportation are typically covered under a marine cargo policy?
What is the purpose of the 'Key Points of the Insurance Cover' section provided in the text?
What is the purpose of the 'Key Points of the Insurance Cover' section provided in the text?
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Study Notes
Introduction to Marine Insurance
- Trade by sea is one of the oldest forms of commerce, involving significant risks such as losing ships and goods, piracy, damage to goods, and transit delays.
- Marine Insurance emerged to mitigate these risks, evolving beyond traditional sea transportation to include rail, road, and air logistics.
- It is essential for facilitating overseas commerce and domestic trade in various countries.
History of Marine Insurance
- The earliest recorded marine policy dates back to a Mediterranean voyage in 1347.
- A 1400 account by a Florence merchant details premium rates for shipments from London to Pisa.
- Marine Insurance spread from Italy throughout Europe, with significant regulations introduced by Phillip II in Spain (1556) and policies in Antwerp for voyages to Central America.
Types of Marine Insurance Policies
- Hull Policy: Covers risks associated with the ship itself, including during construction. Not applicable for goods on board.
- Cargo Insurance: Protects goods being transported on various transport modes, including rail, road, sea, and air. Policies can be time-bound or based on specific voyages.
- Mixed Policy: Combines time and voyage policies to cover risks for defined voyages within a specific time frame.
- Valued Policy: Sets a predetermined value for insured items, agreed upon in advance.
- Open or Unvalued Policy: Does not specify a value, allowing the insurer to determine the loss value at a later date. Typically valid for one year, covering all declared transits.
- Open Cover: A contract covering all shipments for a year, with specific declarations needed for individual consignments. It serves as an umbrella agreement rather than a traditional policy.
- Floating Policy: Specifies only the insurance amount, with details about the vessel and cargo defined in subsequent declarations, ideal for frequent shipments.
- Wagering or Honour Policy: Issued without insurable interest from the assured, known as Proof of Interest (P.P.I.).
- Special Declaration Policy: For clients with annual dispatches exceeding Rs 2 crores, requiring regular declaration of dispatches, with premium adjustments based on total amounts declared.
Key Characteristics of Policies
- Continuation Clause: Extends coverage for voyages that exceed the originally specified period.
- Cargo Insurance Categories: Includes provisions for export/import shipments by various vessel types and personal belongings of crew and passengers.
- Premium Adjustments: Special declaration policies adjust premiums based on declared values at policy expiration.
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