Marine Insurance - Wikipedia, The Free Encyclopedia
Marine Insurance - Wikipedia, The Free Encyclopedia
Marine Insurance - Wikipedia, The Free Encyclopedia
file:///C:/Users/lenovo/Desktop/marine insurance/Marine_insurance.htm
Marine insurance
From Wikipedia, the free encyclopedia
Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination. Cargo insurancediscussed hereis a sub-branch of marine insurance, though Marine also includes Onshore and Offshore exposed property (container terminals, ports, oil platforms, pipelines); Hull; Marine Casualty; and Marine Liability.
Contents
1 Origins of formal marine insurance 2 Practice 3 Protection and indemnity 4 Actual total loss and constructive total loss 5 Average 6 Excess, deductible, retention, co-insurance, and franchise 7 Tonners and chinamen 8 Specialist policies 9 Warranties and conditions 10 Salvage and prizes 11 Marine Insurance Act, 1906 12 See also 13 References 14 External links 15 Bibliography
Admiralty law
History Ordinamenta et consuetudo maris Amalfian Laws Hanseatic League Features Freight rate General average Marine insurance Marine salvage Maritime lien Ship mortgage Ship registration Ship transport Shipping Contracts of affreightment Bill of lading Charter-party Types of charter-party Bareboat charter Demise charter Time charter Voyage charter Parties Carrier Charterer Consignee Consignor Shipbroker Ship-manager
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intuitive estimates of the variable risk from seasons and pirates.[1] The modern origins of marine insurance law in English law were in the law merchant, with the establishment in England in 1601 of a specialized chamber of assurance separate from the other Courts. Lord Mansfield, Lord Chief Justice in the mid-eighteenth century, began the merging of law merchant and common law principles. The establishment of Lloyd's of London, competitor insurance companies, a developing infrastructure of specialists (such as shipbrokers, admiralty lawyers, and bankers), and the growth of the British Empire gave English law a prominence in this area which it largely maintains and forms the basis of almost all modern practice. The growth of the London insurance market led to the standardization of policies and judicial precedent further developed marine insurance law. In 1906 the Marine Insurance Act was passed which codified the previous common law; it is both an extremely thorough and concise piece of work. Although the title of the Act refers to marine insurance, the general principles have been applied to all non-life insurance.
Ship-owner Shipper Stevedore Judiciary Admiralty court Vice admiralty court International conventions Hague-Visby Rules Hamburg Rules Rotterdam Rules UNCLOS Maritime Labour Convention International organisations International Maritime Organization London Maritime Arbitrators Association
In the 19th century, Lloyd's and the Institute of London Underwriters (a grouping of London company insurers) developed between them standardized clauses for the use of marine insurance, and these have been maintained since. These are known as the Institute Clauses because the Institute covered the cost of their publication.
Within the overall guidance of the Marine Insurance Act and the Institute Clauses parties retain a considerable freedom to contract between themselves. Marine insurance is the oldest type of insurance. Out of it grew non-marine insurance and reinsurance. It traditionally formed the majority of business underwritten at Lloyd's. Nowadays, Marine insurance is often grouped with Aviation and Transit (i.e. cargo) risks, and in this form is known by the acronym 'MAT'.
Practice
The Marine Insurance Act includes, as a schedule, a standard policy (known as the 'SG form'), which parties were at liberty to use if they wished. Because each term in the policy had been tested through at least two centuries of judicial precedent, the policy was extremely thorough. However, it was also expressed in rather archaic terms. In 1991, the London market produced a new standard policy wording known as the MAR 91 form and using the Institute Clauses. The MAR form is simply a general statement of insurance; the Institute Clauses are used to set out the detail of the insurance cover. In practice, the policy document usually consists of the MAR form used as a cover, with the Clauses stapled to the inside. Typically each clause will be stamped, with the stamp overlapping both onto the inside cover and to other clauses; this practice is used to avoid the substitution or removal of clauses. Because marine insurance is typically underwritten on a subscription basis, the MAR form begins: We, the Underwriters, agree to bind ourselves
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each for his own part and not one for another [...]. In legal terms, liability under the policy is several and not joint; i.e. The underwriters are all liable together, but only for their share or proportion of the risk. If one underwriter should default, the remainder are not liable to pick his share of the claim. Typically, marine insurance is split between the vessels and the cargo. Insurance of the vessels is generally known as 'Hull and Machinery' (H&M). A more restricted form of cover is 'Total Loss Only' (TLO), generally used as a reinsurance, which only covers the total loss of the vessel and not any partial loss. Cover may be on either a 'voyage' or 'time' basis. The 'voyage' basis covers transit between the ports set out in the policy; the 'time' basis covers a period of time, typically one year, and is more common.
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adventure', with insurers having a stake and an interest in the vessel and/ or the cargo rather than, simply, an interest in the financial consequences of the subject-matter's survival.
Average
The term 'Average' has two meanings: (1) In marine insurance, in the case of a partial loss, or emergency repairs to the vessel, average may be declared. This covers situations, where, for example, a ship in a storm might have to jettison certain cargo to protect the ship and the remaining cargo. 'General Average' requires all parties concerned in the venture (Hull/Cargo/Freight/Bunkers) to contribute to compensate the losses caused to those whose cargo has been lost or damaged. 'Particular Average' is levied on a group of cargo owners and not all of the cargo owners.
(2) In the situation where an insured has under-insured, i.e. insured an item for less than it is worth, average will apply to reduce the amount payable. There are different ways of calculating average, but generally the same proportion of under-insurance will be applied to any payout due. An average adjuster is a marine claims specialist responsible for adjusting and providing the general average statement. He is usually appointed by the shipowner or insurer.
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market, by which time, they had become nothing more than crude bets. A 'tonner' was simply a 'policy' setting out the global gross tonnage loss for a year. If that loss was reached or exceeded, the policy paid out. A 'chinaman' applied the same principle but in reverse: thus, if the limit was not reached, the policy paid out.
Specialist policies
Various types of specialist policy exist, including: Newbuilding risks: This covers the risk of damage to the hull whilst it is under construction. Yacht Insurance: Insurance of pleasure craft is generally known as 'yacht insurance' and includes liability coverage. Smaller vessels, such as yachts and fishing vessels, are typically underwritten on a 'binding authority' or 'lineslip' basis. War risks: Usual Hull insurance does not cover the risks of a vessel sailing into a war zone. A typical example is the risk to a tanker sailing in the Persian Gulf during the Gulf War. War risks cover protects, at an additional premium, against the danger of loss in a war zone. The war risks areas are established by the London-based Joint War Committee, which has recently moved to include the Malacca Straits as a war risks area due to piracy [1] (http://www.icc-ccs.org/extra/display.php) . If an attack is classified as a "riot" then it would be covered by war risk insurers.[2] Increased Value (IV): Increased Value cover protects the shipowner against any difference between the insured value of the vessel and the market value of the vessel. Overdue insurance: This is a form of insurance now largely obsolete due to advances in communications. It was an early form of reinsurance and was bought by an insurer when a ship was late at arriving at her destination port and there was a risk that she might have been lost (but, equally, might simply have been delayed). The overdue insurance of the Titanic was famously underwritten on the doorstep of Lloyd's. Cargo insurance: Cargo insurance is underwritten on the Institute Cargo Clauses, with coverage on an A, B, or C basis, A having the widest cover and C the most restricted. Valuable cargo is known as specie. Links: Description of cover: [2] (http://www.dtgruelle.com/articles/nuinsabc.html) Institute Cargo Clauses: [3] (http://www.allcovered.net/AC-OM-MAIN-Cargo_Clauses.html) Pleasurecraft & Commercial marine policy summaries: [4] (http://www.navandgen.co.uk/navandgen/existingcustomers/viewdocuments /summaryofcover.htm)
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A peculiarity of marine insurance, and insurance law generally, is the use of the terms condition and warranty. In English law, a condition typically describes a part of the contract that is fundamental to the performance of that contract, and, if breached, the non-breaching party is entitled not only to claim damages but to terminate the contract on the basis that it has been repudiated by the party in breach. By contrast, a warranty is not fundamental to the performance of the contract and breach of a warranty, whilst giving rise to a claim for damages, does not entitle the non-breaching party to terminate the contract. The meaning of these terms is reversed in insurance law. Indeed, a warranty if not strictly complied with will automatically discharge the insurer from further liability under the contract of insurance. The assured has no defense to his breach, unless he can prove that the insurer,by his conduct has waived his right to invoke the breach, possibility provided in section 34(3) of the Marine Insurance Act 1906 (MIA). Furthermore in the absence of express warranties the MIA will imply them, notably a warranty to provide a seaworthy vessel at the commencement of the voyage in a voyage policy (section 39(1)) and a warranty of legality of the insured voyage (section 41). .[3]
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s.4: a policy without insurable interest is void. s.17: imposes a duty on the insured of uberrimae fides (as opposed to caveat emptor); ie. that questions must be answered honestly and the risk not misrepresented. s.18: the proposer of the insurer has a duty to disclose all material facts relevant to the acceptance and rating of the risk. Failure to do so is known as non-disclosure or concealment (there are minor differences in the two terms) and renders the insurance voidable by the insurer. s.33(3): If [a warranty] be not [exactly] complied with, then, subject to any express provision in the policy, the insurer is discharged from liability as from the date of the breach of warranty, but without prejudice to any liability incurred by him before that date. s.34(2): where a warranty has been broken, it is no defence to the insured that the breach has been remedied, and the warranty complied with, prior to the loss. s.34(3): a breach of warranty may be waived (ie. ignored) by the insurer. s.39(1): implied warranty that the vessel must be seaworthy at the start of her voyage and for the purpose of it (voyage policy only). s.39(5): no warranty that a vessel shall be seaworthy during the policy period (time policy). However if the assured knowingly allows an unseaworthy vessel to set sail the insurer is not liable for losses caused by unseasworthiness. s.50: a policy may be assigned. Typically, a shipowner might assign the benefit of a policy to the ship-mortgagor. ss.60-63: deals with the issues of a constructive total loss. The insured can, by notice, claim for a constructive total loss with the insurer becoming entitled to the ship or cargo if it should later turn up. (By contrast an actual total loss describes the physical destruction of a vessel or cargo.) s.79: deals with subrogation; ie. the rights of the insurer to stand in the shoes of an indemnified insured and recover salvage for his own benefit. Schedule 1 of the Act contains a list of definitions; schedule 2 contains the model policy wording.
See also
8History of insurance Classification society Legal definitions of wreckage Inland marine insurance SalvageSale, Inc.
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References
1. ^ J. Franklin, The Science of Conjecture: Evidence and Probability Before Pascal (Baltimore: Johns Hopkins University Press, 2001), 273-278. 2. ^ http://books.google.com/books?id=w2XtGQXjDKsC&pg=PA107 3. ^ see also: Bank of Nova Scotia v. Hellenic Mutual War Risks Association (Bermuda) Ltd. ('The Good Luck') [1991] 2 WLR 1279 and at 1294-5
External links
UK case relating to legal definitions (http://www.hmcourts-service.gov.uk/HMCSJudgments/View.do?id=4135) (The No. 1 Dae Bu) Frequently Asked Questions relating to Boat Insurance Insurance FAQs (http://allboatinsurance.co.uk/boat_insurance_FAQs.php)
Bibliography
Birds, J. Birds' Modern Insurance Law. Sweet & Maxwell, 2004. (ISBN 0-421-87800-2) Donaldson, Ellis, Wilson (Editor), Cooke (Editor), Lowndes and Rudolf: Law of General Average and the York-Antwerp Rules. Sweet & Maxwell, 1990. (ISBN 0-420-46930-3) John, A. H. "The London Assurance Company and the Marine Insurance Market of the Eighteenth Century," Economica New Series, Vol. 25, No. 98 (May, 1958), pp. 126141 in JSTOR (http://www.jstor.org/stable/2551021) Roover, Florence Edler de. "Early Examples of Marine Insurance," Journal of Economic History Vol. 5, No. 2 (Nov., 1945), pp. 172200 in JSTOR (http://www.jstor.org/stable/2114075) Wilson, DJ, Donaldson (1997). Lowndes and Rudolf: General Average and the York-Antwerp Rules. British Shipping Law Library: Sweet & Maxwell. ISBN 0-421-56450-4. Retrieved from "http://en.wikipedia.org/w/index.php?title=Marine_insurance&oldid=459028919" Categories: Types of insurance Shipping management Admiralty law This page was last modified on 4 November 2011 at 20:32. Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply. See Terms of use for details. Wikipedia is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization.
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