MARINE INSURANCE POLICIES

 There are various types of marine insurance policies available and they could broadly be classified into 5 types.

         1.         Time policy - Insures property for a period of time.

         2.         Voyage policy - It insures property from one place to another it may include a date limit.

         3.         Mixed policy - It covers both a voyage and a period of time of voyage and in port after arrival.

         4.         Construction policy - It insures vessel while in course of construction not for a period of time.

         5.         Floating policy - cargo policy that insures a number of shipments. In Canada & US this policy is continuous and covers all shipments to a limit of liability for any 1 loss.

                     The marine insurance policies that a ship owner can take are

                     1)           Hull & machinery policy

                     2)           Protection & indemnity cover.

                     The insurance policies for a cargo owner include

                     1)           Marine cargo insurance

                     2)           Goods in transit insurance.

                     Hull and machinery policies :

                     These are usually time policies with a maximum period of 12 months. Normally the items covered will be clearly stated in the clauses of each policy. Any extra port to be covered will raise the insurance premium.

                     Perils include 1) Peril of seas 2) Fire / explosion 3) theft from outside 4) Jettison 5) Piracy 6) Earthquake volcanic eruption, lightening 6)  accidents during loading or discharging 7) Machinery damage 8) Latent defects in machinery or hull 9) Negligence of master, officer or crew 10) 3/4 collusion liability items not covered under insurance include 1) loss / damage eg insurer deliberately set fire to ship caused by willful misconduct willful negligence by owner. 3) loss of charter hire due to delays 4) loss due to wear and team 5) war risk cover.

         6.         Cost for scraping & painting vessel underwater part due to fouling

         7.         Valuation clause i.e. in case the vessel is a constructive total loss, salvage values are not considered.

         8.         loss / damage from nuclear weapon or by radioactive material.

                     P & I cover is available fro the following

         1)        Cargo claims 2) crew claims 3) claims for various fines eg. customs times immigration fine for improper documentation fine due to misconduct of crew etc 4) Collision liability covering the 1/4 liability not covered by H & m insurance 5) liability against collision with fixed or floating objects 6) third party injury & death claims 7) oil pollution liability 8) miscellaneous claims.

                     Restrictions on P & I cover include :

         1)        Deviation 2) delivery of cargo at port other then port specified in the contract of carriage. 3) failure to arrive or late arrival at port of loading 4) delivery of cargo without bill of lading 5) Out dated bill of lading 6) clean bill of lading in respect to damaged cargo 7) arrest or detention.

                     Cargo insurance policies :

                     The policies will incorporate institute of cargo clause A B or Institute of cargo clause C : This covers only against major casualties eg fire, explosion, grounding or vessel stranded, sinking or capsizing, collusion or contact disc at port of distress general average sacrifice and jettison.

                     Institute of cargo clause B : In addition to the above will also cover casualties like earthquake, volcanic eruption, lightening strike washing obd entry of sea.

                     Institute of cargo clause A - Offers cover against all possible risks.

                     Items excluded from maritime cargo insurance policy are

         1)        Claims resulting from insufficient or in suitable packing or protection of matter insured.

         2)        Claims for loss or damage arising from financial default of owners company cannot be responsible for performance of the carrier and this exclusion is aimed at encouraging the use of reputable company.

         3)        Claims arising from use of nuclear weapons.

         4)        Claims arising from damage by terrorists or politically motivated groups.

         5)        Claims arising from unfitness of vessel ware risk and strike risk cover is available for cargo insurance for an additional premium for long term insurance, open cover policy and floating policies are available.