The beginning of the insurance business is traced to the city of London. It started with the marine business. Marine traders, who used to gather at Lloyd's coffee house in London, agreed to share losses to goods during transportation by ship. The first insurance policy was issued in England in 1583.The law relating to Marine Insurance is found in the Marine Insurance Act, 1963. A contract of marine insurance is an agreement whereby the insurers undertakes to indemnify the insured, in the manner and to the extent thereby agreed upon, against marine losses, that is to say, the losses incidental to marine adventure.
Arnold defines marine insurance as "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 merchandised and other interests in a maritime adventure may be exposed during a certain voyage or certain period of time."
Under the marine insurance policies, the insurer undertakes to indemnify against different subject-matter of insurance. The subject matter of marine insurance is the insurable property against which the risks can be covered. The risks against cargo, vessel, freight and liability to a third party can be insured.
[...] SCOPE OF MARINE INSURANCE Under the marine insurance policies, the insurer undertakes to indemnify against different subject-matter of insurance. As such, the scope of marine insurance can be based on: I. Subject matter of marine insurance. II. Risks covered/insured in marine insurance. I. SUBJECT MATTER OF MARINE INSURANCE The subject matter of marine insurance is the insurable property against which the risks can be covered. The risks against cargo, vessel, freight and liability to a third party can be insured CARGO: The ‘cargo' is the most important subject matter of marine insurance. [...]
[...] EXPRESS WARRANTIES: The Marine Insurance Act specifies two forms of express warranties, namely i. A warranty of neutrality, and ii. A warranty of good safety. Sections 38 and 40 specifically deal with these. Where the subject matter is expressly warranted neutral, it must be so at the commencement of the risk, and, so far as the assured can control the matter, the neutral character is preserved during the risk. Where the subject matter insured is warranted or good safety” on a particular day, it is sufficient if it be safe at any time during the day INDEMNITY: Indemnity principle is applied in marine insurance also. [...]
[...] Where the subject matter is insured from a particular place, the risk attaches only when the ship starts on the voyage insured and ends as soon as the ship enters the port of destination MIXED POLICY OR COMBINED POLICY: Wherein a marine insurance policy, the time period and the voyage, both are included, it is known as mixed policy. It insures the subject matter “from and certain places between a specified period of time, and covers the risk during that particular voyage. [...]
[...] Section 57 of Marine Insurance Act defines, “Where the subject matter insured is destroyed, or so damaged as to cease to be a thing insured, or where the assured is irretrievably deprived thereof, there is an actual total loss.” 2. CONSTRUCTIVE TOTAL LOSS: According to Section 60 of Marine Insurance Act “There is a constructive loss, where the subject matter insured is reasonably abandoned of account on its actual total loss appearing to be unavoidable or because it could not be preserved from actual loss without an expenditure which would exceed its value, when the expenditure had been incurred.” There is a constructive loss when: the assured is deprived of the possession of his ship or goods by a peril insured against and the cost of recovering the ship or goods would exceed their value when recovered, or the ship is damaged by a peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired, or in the case of damage of goods, where the cost of repairing the damage and forwarding the goods to their destination would exceed their value in arrival. [...]
[...] SIMILARITIES BETWEEN MARINE AND FIRE INSURANCE Certain similarity factors are found in Marine and Fire Insurance. These similarities are as follows: 1. Both these policies are based on the principle of indemnity The principle of good faith is the basis of both Both Marine and Fire Insurance fall within the scope of General Insurance The risk factors are more in both the policies; some are included and others are excluded from the policies Initially both Marine Insurance and Fire Insurance policies are issued for one year only, and the policies get lapsed in the absence of renewal in time. [...]
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