• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Business
  • Commerce
  • Management
  • Insurance
  • Banking Finance
  • Marketing & Advertising
  • Tech

Business Finance Articles

Your First Financial Choice....

  • Education
  • Career
  • Investment & Money
  • Accounting & Taxation
  • Transportation & Logistics
  • Industries

Things Making Valid Marine Insurance Contract

Last Updated on November 12, 2021 By Lisa C. Townes Leave a Comment

Marine Insurance is the oldest known type. It is a contract of indemnity in which the underwriter agrees to compensate the insured against specified perils in consideration of a certain premium. Some writers define marine insurance. “It is a contract of indemnity whereby the assure undertakes to indemnify the insured in a manner and to the extent thereby agreed against the loss caused in connection with a marine adventure.” It is primarily concerned with the loss imposed by some maritime perils. Temple man has defined these types of insurance as “A contract of indemnity whereby the insurer undertakes to indemnify the insured against perils insured.”

A policy is generally taken in order to obtain protection against the risk included in the clause.

The growth of international trade has been greatly helped by shifting risk to the company. A ship sailing in the sea faces some misfortune. Marine Insurance is a device to reduce or eliminate sea perils. So industrials and exporters may devote their full attention towards the promotion of business which may increase the export activates.

Table of Contents

  • Three Insurance of Property
    • Hull Insurance
    • Cargo Insurance
    • Freight Insurance
  • Essentials of The Valid Marine Insurance Contract
    • Contract of Indemnity
    • Insurable Interest
    • Fair Dealing
    • Sea Worthiness
    • Non Deviation
    • Legality of the Venture
    • Condition of the Cargo
    • General Consideration

Three Insurance of Property

Hull Insurance

This is affected by the ship-owner on the actual vessel and its machinery. It covers all the perils of the sea, i.e. storm, stranding, collision, fire and it arranges on an annual basis.

Cargo Insurance

This policy is arranged for goods or merchandise carried by ship. This is taken for the duration of a voyage or for other purposes. It provides coverage against all risks including strike and war risks.

Freight Insurance

The term Freight is used for the cost of transporting the goods. It may also be referred to as the hire of a vessel. If the freight has been pre-paid, this is generally added to the value of the goods insured under the policy. A shipowner is entitled to it only when the goods safely arrive at the port of distinction. If the goods are destroyed or the ship does not reach the destination, the shipping company would lose the income.

Essentials of The Valid Marine Insurance Contract

Contract of Indemnity

As It is a contract of indemnity, so insured cannot claim before he suffers loss; In the absence of the loss, the entire amount paid as premium will be possessed by the underwriting as profit.

Insurable Interest

The assured must have an insurable interest in the subject matter. Its absence will make the insurance policy as gambling. It must be present at the time of the loss and need not exist when the policy is effected.

Fair Dealing

It is an important essential of the contract that the insured must disclose all the material facts concerning the risk insured. The contract becomes void in case of concealing any fact.

Sea Worthiness

It is one of the clauses of an implied warranty that the ship must be in a fit condition in order to encounter the ordinary perils of the voyage being insured. The condition of the seaworthiness must be satisfied before the commencement of the ‘voyage.

Non Deviation

The ship must follow the proper route which is usually specified in the policy. Any departure by a ship from such course is called a deviation. The deviation is, however, allowed in unavoidable circumstances.

Legality of the Venture

The object of the voyage must be lawful. For example, a policy to cover the risk of smuggling and trading with an enemy in time of war is void. In case of default, the underwriter is discharged from his liability.

Condition of the Cargo

The cargo must be in sound condition and properly packed.

General Consideration

  • The ship must carry the necessary documents to establish her nationality.
  • The parties must be competent to contract and it should be made by the free consent of the parties.
  • The agreement must be supported by valuable consideration.
  • The contract must be embodied in a policy.
lisa
Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Filed Under: Insurance

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

concepts of markets
Leadership of an organization
Leadership of an organization
meeting of business team
Bad manager shouting on team
boy hand look in LCD
Profit Graph
woman using a laptop
pineapple and bottle
People sitting on chairs
Girl leading the team
Girl analysis the organization report
person-using-laptop
Microplastics Harmful Water bottle
Business Retailing
What You Ought To Know About the Insurance Process
Forklift and Pallet Truck
Woman getting a signature of man on documents
Man write something on the page
investing mistake
Business-Accounting
Translation Services
PTO
hands-on-laptop
Mortgage employee

Footer

  • About US
  • Contact Us
  • Blog
  • Comment Policy
  • Terms & Conditions
  • Privacy Rights
  • Privacy Policy
  • Follow Us On
  • – Google News
  • – Facebook
  • Entrepreneur Skills
  • Business Cycle
  • Business Ideas
  • Speculator
  • Be Wealthy
  • Psychology in HRM
  • HRM in Business
  • Businessman Qualities
  • Salespeople Types
  • Health & Business
  • Business Success Rules
  • Stress At Work
Copyright © 2018-2022 BFA