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Unit 9: Marine Insurance
4. This principle of contribution is in support to the principle of …………………………….. Notes
which states that insurance must make good only the actual loss suffered by the insured.
5. The insurance companies indemnify the proximate cause of loss and not the
………………………….. cause.
6. The …………………………… have to be specially mentioned in the insurance policy.
9.2 Meaning and Definition of Marine Insurance
In this section, we will learn about the exact definition of marine insurance. A contract of marine
insurance is defined by the Marine Insurance Act 1963 as “an agreement whereby the insurer
undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against
losses incidental to marine adventure. It may cover loss or damage to vessels, cargo, or freight”.
The identity with which insurance contract is entered into is called the “insurer” and the person
entering into contract is the “insured”.
Section 2 (C&F) of the Marine Insurance Act, 1963 defines marine insurance and includes the
movables exposed to maritime perils. Movables mean movable tangible property, which includes
money, valuable securities and documents, etc.
As per Arnold, marine insurance is “A contract whereby one party for an agreed consideration,
undertakes to indemnify the other against loss arising from certain perils and sea risks to which
a shipment and other interest in a marine adventure may be exposed during a certain age or a
certain time.”
A contract of marine insurance is an agreement whereby the insurer undertakes to indemnify
the insured, in the manner and to the extent thereby agreed, against transit losses, that is to say
losses incidental to transit.
A contract of marine insurance may by its express terms or by usage of trade be extended so as
to protect the insured against losses on inland waters or any land risk which may be incidental
to any sea voyage.
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. Who is responsible for affecting insurance on the goods, which are the
subject of sale? It depends on the terms of the sale contract. A contract of sale involves mainly a
seller and a buyer, apart from other associated parties like carriers, banks, clearing agents, etc.
Self Assessment
Fill in the blanks:
7. The identity with which insurance contract is entered into is called the ………………….
and the person entering into contract is the ……………………….
8. Movables mean movable …………………………. property.
9.3 Kinds of Marine Insurance Policies
You will find it interesting to note that there are various kinds of marine insurance policies
which are shown in the figure below as well as discussed in detail later on.
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