Page 416 - IC38 GENERAL INSURANCE

J. Marine Insurance

Marine insurance is classified into two types: marine cargo and marine hull

1. Marine Cargo Insurance

Though the term „marine‟ may indicate only losses due to sea (marine) mis-
adventures, marine cargo insurance covers much more. It provides indemnity
in respect of loss of or damage to goods during transit by rail, road, sea, air or
registered post, within the country as well as abroad. Type of goods may range
from diamonds to household goods, bulk items like cement, grains, over
dimensional cargoes for projects etc.

Cargo insurance plays an important role in domestic trade as well as in
international trade. Most contracts of sale require that the goods must be
covered, either by the seller or the buyer, against loss or damage.

Who effects the insurance: The seller or the buyer of the goods [consignment]
may insure the cargo depending upon the contract of sale.

Marine insurance contract needs to have provisions that apply internationally.
This is because it covers goods that are in transit beyond any country‟s borders.
The covers are accordingly governed by international conventions and certain
clauses attached to the policy.

While the basic policy document contains general conditions, the scope of cover
and exceptions and special exclusions are attached by separate clauses known
as Institute cargo Clauses (ICC). These are drafted by the Institute of London
Underwriters.

a) Coverage under Marine Cargo Insurance

Cargo policies are essentially voyage policies, i.e. they cover the subject
matter from one place to another. However, the insured is required to
always act with reasonable care in all circumstances within his control. The
main feature of this policy is that it's an Agreed Value Policy. The valuation
is agreed between the insurer and insured and is not subject to revaluation
later unless fraud is suspected. Another unique feature is that the policy is
freely assignable.

The cover normally commences from the time the goods leave the
warehouse at the place named in the policy and terminates at the
destination named in the policy, depending on the terms of the contract of
sale.

The terms and conditions applicable are governed by either;

i. Inland Transit Clause (ITC) A, B or C for inland transit
ii. Institute Cargo Clause (ICC) A, B, or C for voyage by sea

410