Page 34 - Insurance Times July 2016

A contract of marine insurance is a contract whereby the
insurer undertakes to indemnify the assured, in manner and
to the extent thereby agreed, against marine losses, that
is to say, the losses incidental to maritime adventure, vide
Section 3 of The Marine Insurance Act, 1963. The law
defines 'Marine Adventure' in Section 2 (d) of the Marine
Insurance Act, 1963, as any adventure where -
(a) Any ship, goods, or other movables referred to as
'insurable property' is exposed to "maritime perils";
(b) The earning or acquisition of any freight, passage
money, commission, profit or other pecuniary benefit,
or the security for any advances, loans or
disbursements is endangered by the exposure of
insurable property to "maritime perils";
(c) Any liability to a third party that may be incurred by
the owner of, or other person interested in or
responsible for insurable property by reason of
"maritime perils".
"Maritime Perils" means the perils consequent on, or
incidental to, the navigation of the sea, that is to say, perils (iv) Carriage by Air Act, 1988
of the sea, fire, war or war like activities, pirates, rovers,
thieves, captures, seizures, restraints and detainments of
princes and peoples, jettisons, barratry and any other perils
which are either of the like kind or be designated by the
policy, vide Section 2 (e) of the MIA 1963.
Special Features of Marine Risks
By their very nature ships are rarely stationary but more
mobile and ambulatory and therefore management is
delegated. Ships operate in domestic waters, international
waters and environments that are frequently turbulent and
hostile and in weather conditions that are most
unpredictable. Apart from ocean currents, ships have to
navigate through heavy weather and encounter storm,
34 The Insurance Times, July 2016
tempest, cyclone, hurricane, sea quakes and other hazards,
not to mention fire and mutiny by ship's crew members and
attack by pirates and rovers and aquatic creatures like
monstrous whales.
Even when they are in ports they are subject to risks that
cannot usually be directly controlled by either the ship
management nor the officers or crew of the ship. Hence
marine insurance both cargo and hull is a class of business quite
complex to underwrite. Marine Insurance covers are availed
of by even those who consign their goods and commodities by
other means of transport such as railway trains and trucks
which carry the cargo for reward. What is most essential for
marine insurance is that there has to be in place a contract of
carriage. The writing of marine insurance is rigorously
regulated by a plethora of laws and regulations, some
domestic and quite some international, to wit:
(i) The Insurance Act, 1938
(ii) The Marine Insurance Act, 1963
(iii) Carriage of Goods by Sea Act, 1925
(v) Carriage by Road Act, 2007
(vi) Multimodal Transportation of Goods Act, 1993
(vii) Railways Act, 1989
(viii)Institute Time Clauses (Hulls)
(ix) Institute Voyage Clauses (Hulls)
(x) Institute Cargo Clauses
(xi) The Stamp Act, 1899
(xii) York-Antwerp Rules and
(xiii)Hague Visby Rules.
The word "Institute" refers to the "Institute of London
Underwriters" who draft rules, clauses and conditions that
are adopted universally by insurance companies of all
nations. In addition,every sea-faring nation has its own set
of legal rules and regulations to ensure the safety of its
coastal waters, ports and harbors.
Shipping operations are classified under three broad groups
like :
(i) Liner or Breakbulk Operations - The transport of
industrial/commercial shipments on regular or semi-
regular services/routes. Container and RO/RO (roll on
or roll off ferry) operations have largely replaced
traditional breakbulk shipping.
(ii) Bulk Cargo Operations - Where a whole ship is
consigned for a single voyage (or series of voyages) to