Skip to main content

Marine Insurance

 

                                                  MARINE INSURANCE

A brief examination of Marine policies provides us with a slice of export import activity.

Marine Insurance covers Hull  & Cargo Insurance

Hull insurance  means the hull, machinery, materials and other ancillary interests of ocean going vessels of all types, fishing vessels, trawlers, dredgers, ,tugs, salvage vessels, launches, steamers, boats etc.

Cargo insurance means

}  Export and Import of shipments by ocean going vessels,

}  Coastal shipments by steamers, sailing vessels, boats,

}  Shipments by inland vessels or country craft,

}  Consignment sent by rail, road or air and articles sent by post.

What is the sum insured?

}  Sum Insured is the value at risk. Basis of Valuation adopted usually is CIF+10%. (Invoice Value+ Insurance Premium +Freight Charges).

}  Invoice Value includes Packing Charges.

}  Incidental Expenses is allowed up to 10% normally to cover Profits also.

Who affects the insurance?

It depends on the terms of the sale and is governed by INCO TERMS-International Commercial Terms. Export and import Incoterms are used to determine and establish rights and duties in an international trade agreement. These are the common forms of sale contracts:

·       Free on board (F O B). Seller boards the goods on the designated vehicle.

·       Free on Rail (F O R).  Seller boards the goods onto the rail

·       Cost and freight(C & F). Sale price includes cost and freight

·       The seller is responsible till the Goods are placed on board of the Steamer/Ship/Rail. Thereafter the Buyer is responsible for the Cargo.

·       Cost, Insurance and Freight (C I F). Sale price includes cost, insurance & freight.

·       Seller is responsible till the Goods are placed on board of the Steamer/Ship. The Seller is responsible for arranging Insurance also.

 

 

 

TYPES OF POLICIES:

Open Policy: This is used for Overseas Marine Transits, when Number of Dispatches are more and frequent.  Declarations are made and Sum Insured gets reduced by amount of Declarations. Certificate will be issued for each Declaration.

Open Cover: This is issued to cover export import consignments. This is not a policy but an agreement to cover all consignments on agreed terms,  but  premium  will be paid on dispatch of each consignment and no advance premium is collected and hence no reduction of sum insured like open policy.

A Stamped Policy is issued against each Declaration.

OTHER POLICIES:

}  Duty Insurance Policy.

}  Increased Value Insurance Policy.

These two Policies are for Overseas Transit risks and not for Inland Transit Policies.

TWO TYPES OF CLAUSES ARE USED IN MARINE INSURANCE

Coverage under policy is determined by the attachment of clauses.

}  FOR EXPORT/IMPORT POLICIES –   ICC (Institute Cargo Clauses) are used

}  FOR INLAND TRANSIT –   INLAND TRANSIT CLAUSES are used

ICC ‘C’ Clause   Covers

Fire , Explosion, Stranding, Grounding, Capsizing of Carrying  Vessel or Craft, Overturning or derailment of Land Conveyance, Collision or contact of Vessel with any External Object other than Water Jettison, General Average ,Discharge of Cargo at a Port of Distress

ICC   ‘B’ Clause Covers

ICC ‘C’ cover plus  Earthquake , Volcanic Eruptions, Lightning, Washing Overboard Cargo, Total Loss of any Package Overboard or dropped whilst Loading or Unloading of Cargo at a Port Entry of Sea, Lake, or River Water into the Vessel or hold.

On additional premium, the following perils are added:

Theft, pilferage and non-delivery, fresh water  and rain water damage, hook and or oil damage breakage, leakage, bursting/tearing of bags, damage by mud, acid and other  extraneous substances

ICC ‘A’ Clause   Covers

All Coverage under ICC B plus all risks cover.

But War and SRCC risks are not part of Cover and remains add-on.

Institute Cargo Clause (air) is used and the coverage is on all risks for Air transits

Inland Transit Clause A,B,C covers Inland transits.

·       I T C C   commences with loading of each package into wagon/truck & ceases with unloading at destination railway station or road point mentioned in policy

·       I T C   B  &  A commences with goods leaving the warehouse, includes customary transshipments and terminates on delivery to the consignee or on expiry of 7 days of arrival at final destination   whichever occurs earlier

 

Transit Insurance of goods within country or overseas can be arranged with the above coverages.

 

Loss of goods in transit and insurance cover for the sold goods is significant to absorb any unforeseen loss. Insurance is almost mandatory for permits and licenses and is effective collateral in business activity.

We at Zen Insurance  assist in choosing your Insurance Program wisely, you may contact us for assistance.

 

Disclaimer:   

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products.

 

 

 

 

 

Comments

Post a Comment

Popular posts from this blog

Prior and Pending Litigation in Professional Indemnity Policy

  The prior and pending litigation exclusion in liability policies is a clause designed to exclude coverage for claims related to legal disputes or circumstances already known, pending, or in progress before the policy's effective date. It’s an important exclusion because it limits the insurer’s liability for events that occurred before the policy began. Here are more details about this exclusion. Purpose of the Prior and Pending Litigation Exclusion Insurers include this exclusion to avoid covering claims or disputes that were known or existed before the policy started. It ensures that the underlying policy , Directors & Officers (DnO), Professional Indemnity (PI) policy, etc., only covers new claims that arise from professional errors, omissions, or negligence occurring during the policy period and not pre-existing or ongoing legal matters. What the Exclusion Covers Prior Litigation : Any lawsuit, claim, investigation, or l...
Post a Comment
Read more

Mitigation Costs in Professional Liability Policies

  Professional Liability Insurance in India, more commonly referred to as Errors & Omissions (E&O) insurance in the case of businesses, provides the business with insurance coverage against claims of negligence, error, or omission in the services rendered by the business under insurance. In this policy, one of the features includes mitigation cost coverage. Mitigation costs are sums of money that an Insured pays to avoid or lessen the possibility of a claim arising. For example, if a business finds an error in its work that may give rise to a potential liability claim, it may incur expenses to correct such error before it generates a claim. These costs will be incurred in trying to reduce the potential damage or liability and, therefore, may be covered under a professional liability insurance policy. However for mitigation cost section claim to trigger there needs to be a claim payable under the policy. Once the claim is determined to be payable under the policy, the miti...
Post a Comment
Read more

Third Party claims under Motor Insurance

                                  There are two sections within a comprehensive motor policy -o wn damage section and third-party section (3 rd Part Section). Own Damage section is voluntary insurance based on the Insured Declared Value (IDV) opted by the insured while 3 rd Party section is compulsory under the provisions of the Motor Vehicles Act 1988 (MV Act).   While own damage section takes care of damage to the motor vehicle due to accidents, Act of God perils, etc., the third-party section covers third party property damages and bodily injuries.             Details of third-party cover in motor insurance : Third party cover : Third-party insurance, is called as ‘Act Only’ insurance as it is a statutory requirement for all vehicle owners as per the Motor Vehicle Act. This policy covers accident, loss of life and damage to the...
Post a Comment
Read more