Marine Insurance primarily provides financial protection to the ship owners, cargo owners or the freight owners in respect of any loss or damage to their interests caused by maritime perils insured against.
Types of Marine Insurance Policy:
i) Marine Cargo Insurance and
ii) Marine Hull Insurance
Marine Cargo Insurance: An inland marine or ocean marine
policy covering cargo in the care, custody, or control of the carrier. It
provides cover against loss or damage to cargo during transit from one place to another by any one or more modes of transport. In case of import & export goods, the marine cargo Insurance is a valid document to open the bank LC and goods protection.
The three basic covers are:
Institute Cargo Clauses ‘C’ (ICC ‘C’)
a) Fire & explosion
b) Vessel or craft being stranded, grounded, sunk or capsized.
c) Overturning or derailment of the conveyance
d) Collision or contact of vessel, craft or conveyance with any external object other than water.
e) Discharge of cargo at a port of distress
f) General average sacrifice
• Can be added on payment of extra premium to ICC (C) :
b) Theft, Pilferage and/or Non-delivery (TPND)
Institute Cargo Clauses ‘B’ (ICC ‘B’) (Moderate Risk) • Provides cover under ICC (C)
Additional risk :
a) Earthquake, volcanic eruption or lightning.
b) Washing overboard.
c) Entry of sea, lake or river water into vessel.
d) Total loss of any package lost overboard or dropped whilst loading or unloading from vessel.
Can be added on payment of extra premium to ICC (B) :
a) Non-Delivery (ND).
b) Theft, pilferage and/or non-delivery (TPND).
c) Hooks, holding, brusting, tearing, leakage, loss of contents caused by damaged to containers.
d) Fresh rain water damage, extraneous substance, heating.
e) Breakage & scratching, splitting.
Institute Cargo Clauses ‘A’ (ICC ‘A’)
(All Risk except exclusion)
It covers all damage or loss during transit in consequences of any peril other than the following:
a) Willful misconduct of the assured.
b) Ordinary leakage, ordinary losses in weight or volume or ordinary wear and tear.
c) Insufficient or unsuitability of packing or preparation of the subject matter insured.
d) Inherent vice or nature of the subject matter insured.
e) Loss damage or expense proximately caused by delay.
f) Insolvency or financial default of carrier.
g) Deliberate damage to or deliberate destruction of the subject matter insured.
h) Loss arising from nuclear weapons.
i) Loss damage or expenses arising from the use of any weapon of war employing atomic or unclear fission and/ or fusion or other like reaction or radioactive force or matter.
Marine Hull: Marine
Hull Insurance Covers loss or damage to hull and machinery. The hull is the structure of the vessel. Machinery is the equipment that generates the power to move the vessel and control the lighting and temperature system such as boiler, engine, cooler and electricity generator.
Types of Marine Hull Insurance Policy:
a) ITC (Institute Time Clause) This policy is commonly known as Comprehensive Coverage.
b) TLO (Total Loss only) including Sue, Salvage and labour charge.
Additional Risk Covered on paymentof additional premium War and Strike
Ship Builder Liability:
Ship builders Policy has 2 section.
Section 1.a) Covers the hull and machinery of the Insured ship.
• At the builder’s premises/ yards within construction port or place.
• Include parts & materials that are at the specified construction,
location and allocated to the ship under construction.
b) Covers machinery while it is under construction at specified sub
contractor’s premises within the construction port.
Section 2. Covers machinery only at the builder’s yard within the construction port (Does not include other parts or materials to be built into the ship.)
Period of cover:
Specified period of cover but terminated upon delivery to the owner.
• Agreed value
• Insured value=provisional value +/-(%) subject to max adjustment of 125% of provisional value
• Agreement of material alternation.