Page 55 - The Insurance Times December 2024

Case Study

Marine Insurance

Introduction quired specialized packaging to prevent damage dur-
ing handling and transit.
Marine insurance plays a crucial role in safeguarding busi-
nesses from the financial impact of losses during the transit Risks included:
of goods. With globalization driving cross-border trade, busi- o Poor packaging of some items by the supplier.
nesses rely heavily on robust marine insurance policies to o Potential exposure to severe weather and rough
cover risks such as damage to cargo, theft, accidents, or seas.
natural disasters.
Exposure:
This case study examines a real-life scenario involving Gen- Financial Exposure:
esis Trading Ltd., a leading exporter of electronic devices and o Total insured value: Rs. 50 million.
industrial machinery. The incident highlights key challenges o Exposure to the insurer for particular average loss
in marine insurance, including damages due to improper pack- and general average contribution.
ing, the declaration of general average, and the application Underwriting Assessment:
of particular average. By analyzing the causes of the loss, o The policy was issued based on standard risk evalu-
insurance coverage, and claim settlement process, the study ation but lacked specific details about packaging
provides valuable insights into risk management strategies quality.
and lessons for corporate insurance managers.
3. Insurance Coverage
The study is intended to not only outline the events but also
to serve as a practical guide for understanding the nuances Policy Description:
of marine insurance claims and implementing preventive o Coverage under Institute Cargo Clauses (A), an all-
measures for future shipments. risk policy.
Sum Insured: Rs. 50 million.
1. Overview of the Incident
Deductible: Rs. 5,00,000.
Type of Insurance: Marine Cargo Insurance.
Key Clauses:
Insured Entity: Genesis Trading Ltd., an exporter of o General Average Contribution Clause: All parties
electronics and machinery components.
share losses incurred to save the voyage.
Insured Items: High-value electronic devices and indus- o Exclusion for Insufficient Packing: Damage caused
trial machinery components valued at Rs. 50 million.
solely by inadequate packaging is excluded.
Incident Details:
o The consignment was shipped from Mumbai, India, 4. Technical Explanation
to Hamburg, Germany. General Average:
o A maritime principle where all cargo owners pro-
o During the voyage, part of the cargo was damaged portionately share the loss incurred from a volun-
due to poor packaging, and a separate incident re-
tary sacrifice (e.g., jettisoning cargo) to save the
quired a general average declaration.
ship.
2. Risk and Exposure Particular Average:
Risk Profile: o Partial loss to the insured's cargo caused by an in-
The shipment included fragile electronic items that re- sured peril, settled individually.

The Insurance Times December 2024 49