Page 3 - Marine Insurance IC67 EBOOK
P. 3
The Insurance Times
sum insured are adjusted at the end of the term exporter against the importer.
of insurance.
Bill of lading : It is the receipt given by the
Cargo Insurance In India is governed by the All shipowner to the shipper as an evidence that
India Marine Cargo tariff effective from 31.3.1983 goods are loaded on board the ship.
which is in line with that of the International Market
based on the recommendations of the United C & F Contract : C & F signify cost and freight.
Nations conference on Trade & Development As per this contract the buyer is responsible for
(UNCTAD) making the revised wordings of the loss or damage to the goods and the freight as
Institute Cargo clause (ICC) mandatory from well and for that he arranges insurance.
31.3.83 In fact, the process of acceptance and
change over to the new ICC was initiated from C.I.F.Contract : CIF means cost, insurance &
1.1.82 in the international Market. freight. In this type of contract it is the sellers
responsibility to arrange insurance before he adds
insurance premium in the invoice.
Unlike other types of general insurance, marine Constructive Total Loss : In constructive total
cargo policies are freely assignable for which prior loss the goods are not physically destroyed but
consent of the insurer is not necessary. Even a so damaged that the cost involved in bringing
blank endorsement on the back side of the policy back to its original position would be more than
is sufficient for negotiation and so it is a negotiable the value of goods after repair. Such loss is also
instrument. called commercial loss.
Contents of proposal form F.O.B. : F.O.B. means free on board. In this type
In marine insurance the proposal in a usual form of contract the seller is responsible till the goods
may not be necessary but should contain the are loaded/boarded on the ship and thereafter the
following information : buyer.
i) Name of shipper and client.
F.O.R. Free on Rail : This position of the buyer
ii) Description & value of the goods to be insured. and seller is almost the same as in F.O.B.
contract.
iii) Method of packing.
General Average : When the entire venture is
iv) Transit particulars like B/L, C/N, R/R no. etc. endangered, in order to save the ship and cargo,
certain sacrifices are made and/or certain
v) Particulars of Vessel, shipping company and expenses are incurred. When such a loss arises
date of sailing. it is apportioned among the interests saved.
vi) Terms of cover. Jettison :Jettison means throwing of cargo from
above board the ship to save the vessel and/or
vii) Past claims experience. other cargo.
SOME FAMILIAR TERMS USED IN MARINE Particular Average : Partial losses other than
INSURANCE general average are called particular average.
Actual Total Loss : It is a loss where the goods
are completely lost and become irrecoverable. Underwriting Considerations
In view of the high claims ratio this class of
Average: Average in Marine Insurance refers to insurance warrants special care and sound
partial loss. knowledge about the nature of various goods and
merchandise, type of damages to which cargos
Barratry: It is the wrongful act committed wilfully
by the master and/or crew against the shipowner.
Bill of Exchange : It is the bill drawn by the
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