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Principles of Marine Insurance

Marine insurance is a contract of indemnity whereby the insurer agrees to compensate the insured for losses from perils at sea. It covers losses to ships and cargo while at sea or in port. The terms are outlined in a marine insurance policy. Some key principles of marine insurance include utmost good faith between parties, insurance as an indemnity contract so the insured must suffer a loss, the insured must have an insurable interest in the insured property, cargo must be properly packed and the ship must follow the proper route and be seaworthy. The voyage must also be legal.

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933 views1 page

Principles of Marine Insurance

Marine insurance is a contract of indemnity whereby the insurer agrees to compensate the insured for losses from perils at sea. It covers losses to ships and cargo while at sea or in port. The terms are outlined in a marine insurance policy. Some key principles of marine insurance include utmost good faith between parties, insurance as an indemnity contract so the insured must suffer a loss, the insured must have an insurable interest in the insured property, cargo must be properly packed and the ship must follow the proper route and be seaworthy. The voyage must also be legal.

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SK Lashari
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© © All Rights Reserved
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What is Marine Insurance and discuss various principles of marine insurance:

Definition of Marine Insurance :


Templeman has defined the Marine Insurance in the following words ;
"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 of Marine Insurance
1. Utmost Good Faith :The contract of marine insurance depends upon the principle of
utmost good faith. The insurer should disclose all the facts about the goods. If he
conceals anything then contract becomes invalid.
2. Contract of Indemnity :Marine insurance is contract of indemnity. The insurer can
not claims unless he suffers a loss.
3. Insurable Interest :In the property, insured must have insurable interest. It must be
present at the time of loss. For example, owner of the ship has insurable interest on
the ship.
4. Good Paring :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 a ship 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.
8. Competent Parties :The parties must be competent to make contract and contract
should also be supported by a valuable consideration.

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