Q.9: What is marine insurance? Discuss various principles of marine insurance?
“A contract of indemnity whereby the insurer undertakes to compensate the insured against perils insured.”
This policy is generally taken to obtain protection against the sea perils, today marine insurance has played very effective role in promoting the international trade. Marine insurance covers almost all losses to the ship and cargo while in sea or port. In each marine insurance contract insurance company undertakes to give coverage against loss due to marine perils on the payment of premium. The terms and conditions are written in a document, which is called marine insurance policy.
PRINCIPLES OR ESSENTIALS
Following are the essentials of Marine Insurance:
1. UTMOST GOOD FAITH
The contract of marine insurance depends upon the principle of utmost good faith. The insured should disclose all the facts about the goods. If he conceals anything then contract becomes invalid.
2. CONTRACT OF INDEMNITY
Marine insurance is a contract of indemnity. The insured cannot claim unless he suffers a loss.
3. INSURABLE INTEREST
In the property, insured must have insurable interest must be present at the time of loss. For example, owner of the ship has insurable interest on the ship.
4. GOOD PACKING
The cargo must be packed properly and it should be in sound condition.
5. PROPER ROUTE
The ship must adopt the proper route, which is specified in the policy. If ships do not adopts the proper route it is called deviation. It is only allowed in case of unfavorable conditions.
6. LEGALITY OF VOYAGE
The object of voyage must be lawful. For example, a policy to cover the risk of smuggling is invalid.
7. GOOD CONDITION OF SHIP
The ship must be in a good condition and may be able to face the ordinary sea perils.