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Marine Insurance:

The scope of maritime insurance you can look in two ways:

A) PERILS COVERED: This has a proper terminology that’s Perils of the sea that said that the peril must be something can only occur in transportation by sea if there is an accident by land this doesn`t apply. The Perils of the sea does not cover wear and tear it only covers such casualties as fire, collisions,theft.

If the maritime insurance contract is valid, the assured has to be an insurable interest in the item insured, this means that the assured want to keep the item safe or in a good condition. Otherwise if the assured is not interested in the item insured the maritime insurance contract will be nothing but a wager.

B) PROPERTY INSURANCE: There are three types of propertyinsurance in marine insurance.

1) Hull Insurance: This insurance covers the loss or damage to the vessel herself(hull and machinery). It also covers the damage incurred to other vessels.

2) Cargo Insurance: This insurance cover the goods of every kind that are being transported by ship under a bill of lading or a charter party. Normally the goods will be insured for their original value onarrival, the cost is based in the transit and the cost of carriage, Customs may be also included in the cost.

C) FREIGTH INSURANCE: Is the insurance for transporting the goods from the port of DEPARTURE to the port of DESTINATION. It may also be used to the hiring of the vessel.

POLICY DOCUMENT

It’s a document that contains the name of the assured and it would also contains the subjectinsured, the conditions of insurance, when cover starts and finishes, the sum insured and the names of the insurers.

TYPES OF POLICIES

Voyage Policy: covers the risk of a particular journey and provides cover from the port of departure to the port of destination, example Panama to New York.

Time policy: is the policy that covers for a specified period of time but not more than 12 months.Hull insurances are normally with this policy.

Mixed policy: it’s a combination of the voyage/time insurance and has a longer period of time.

The building risk policy: it’s a policy that starts when the vessel is being constructed and finishes when the vessel is launched and delivered to its owner.

Floating Policies: This policy is used for cargo. Exporters with many regular shipments peryear often use floating policies. They estimate the number of shipments that they well do in a year and the sum involved. The advantage of this policy is that there is no need to issue a new policy every time a new shipment is made.

Open Cover: is an agreement made between the shipper and the underwriter’s insurers to insured the shippers proposed shipments for the next 12 months. There is nototal sum per year but thre are fixed rates for each type of goods.

Protection and Indemnity Club (P&I club).

These are associations of ship-owners who by means of contributions known as calls, provide a protection against liabilities not covered by insurance, such as claims for injury to crew and loss or damage to cargo. People who contribute to a P&I club are members of that club. Charterersof ships can also enter ships with a P&I clubs in order to cover their liability as charterers.

Marine Average

This is a special part of marine insurance losses as regards cargo. In most branches of insurance average has the meaning of percentage. But in maritime insurance this means loss or damage. There are different kinds of average in marine insurance: General Average: it’s a lossintentionally incurred for the safe of all the people on board. This it’s a loss that is general because all the cargo owners must share the loss, although perhaps only one of the cargo owners is affected.

Particular average

In contrast to general average, particular average applies to an involuntary and accidental loss. This average affects one or more cargo owners but not all of them. To...