Maritime Insurance Law

 

The modern origins of the marine insurance law were seen with the establishment of a specialised chamber of assurance, separate from the other Courts in England in 1601. In 1906 the Marine Insurance Act was passed which codified the previous common law; and it was an extremely thorough and concise piece of work. 19th century saw the development of standardised clauses for the use of marine insurance, and these are known as the Institute Clauses.

Marine insurance is one of the oldest types of insurance and out of it grew non-marine insurance and reinsurance. The Marine Insurance Act includes a standard policy which parties could use if they wished and each term in the policy had been tested through at least two centuries of judicial precedent, and was extremely thorough.

Maritime Life Insurance covers the losses or damage of ships, cargos, terminals, and any transport or property by which cargo is transferred, acquired, or held between the points of origin and the final destination. A marine insurance is usually split between vessels and cargo. Insurance of the vessels generally known as 'Hull and Machinery' and a more restricted form of cover is 'Total Loss Only', generally used as a reinsurance only covers only the total loss of the vessel and not any of the partial losses.

Hence maritime insurance differs from a non-marine insurance because in marine insurance the insured is required to prove his loss. Traditionally, marine insurance was seen as an insurance of 'the adventure', with insurers having a stake and an interest in the vessel and cargo rather than an interest in the financial consequences of the subject-matter's survival.

In marine insurance, in the case of a partial loss, or emergency repairs to the vessel, an average may be declared. This covers situations like for example; a ship in a storm might have to jettison some cargo in order to protect the ship and the remaining cargo. But in a situation where the insured has insured an item for less than its worth, then the average will apply to reduce the amount payable.

Various types of specialist policies exist:

New building risks- This covers the risk of damage to the hull while it is under construction.

Yacht Insurance- Insurance of pleasure craft is generally known as yacht insurance is underwritten on basis of 'binding authority' or 'line slip' smaller vessels, such as yachts and fishing vessels.

Increased Value - Increased Value cover protects the ship-owners against any difference between the insured value and the market value of the vessel.

Cargo insurance: Cargo insurance has been underwritten in the Institute Cargo Clauses.

A peculiar feature of the marine insurance is that the insurance law generally, is the use of the terms and condition and even warranty. Thus, for obtaining Marine Insurance one of the most important things is that the vessel is seaworthy.