Marine Insurance as the name suggests covers the loss or damage of ships, cargo and any transport or property by which freight is transferred, acquired or held among the points of source and final destination. Marine insurance is the oldest kind of insurance which is the source of non- marine insurance and reinsurance. At present it is commonly combined with Aviation and (Transit) cargo risks, commonly called as MAT (Marine Aviation Transit).
The Marine insurance act includes a standard guideline in which parties are at freedom to use if they wished as each term in the insurance policy has been experienced through at least two centuries of judicial precedent. In 1991 London market introduced a new standard guidelines phrasing as MAR 91. Typically, marine insurance is divided into vessel and the cargo. Insurance of the vessels is commonly known as Hull and machinery (H&M).Another form of cover is ‘Total Loss Only’, generally used as reinsurance, which simply covers the entire loss of the vessel and not any fractional loss.
Cover may be also on a ‘voyage’ or on ‘time’ basis. The ‘voyage’ basis covers shipping between the ports set out in the policy; the ‘time’ basis covers a phase of time, normally one year, and is more general.
The two conditions which are used to separate the extent of testimony where a vessel or cargo has been lost are “The Actual Total Loss” and “Constructive Total Loss”. An Actual Total Loss refers to the circumstances where the location is apparent and a Constructive Total Loss refers to the circumstances where a loss is inferred.
Cargo Insurance & Marine Insurance is offered on a broad range of marine associated fields, as well as coverage for cargo, hull, liabilities, and fine art. Marine cargo insurance has been known for centuries as one of the essential services in world trade. Cargo insurance is arranged by the party who bears the responsibility of insuring the commodities under the sales contract, that is the seller or the buyer, as the case may be. The time phase covered by a marine cargo policy is defined as “Warehouse to Warehouse” in the Transit Clause of the Institute Cargo Clauses.
Source by Manan Kumar