Ten Elements of a Marine Insurance Policy Contract
A marine insurance policy is a contract between an insurance company and insurer whereby the insurer agrees to indemnify the insured in a manner, thereby agreed, against the marine losses.
A marine insurance policy contract has the following elements-
1. Features of a general marine insurance contract –
All the elements of a general insurance contract exist in a marine insurance contract as well.
- Proposal: The prospective insurance applicant prepares a slip at the time of approaching the insurance company. Proposal forms, so common in other insurance kinds, are unknown in marine insurance and only the ‘original slip’ is considered for the proposal. The slip can be accompanied by other important documents as per the insurer’s requirements.
- Acceptance: Given to the insurer who accepts the proposal. But can’t force the contract legally until issued a marine insurance policy. The slip acts as evidence that the insurer has accepted the proposal and has also subsequently agreed to sign the policy as per the terms and conditions specified on the slip.
2. Consideration –
Here, the premium is called consideration, computed on the basis of the assessment of the proposal form, and paid at the time of the contract.
3. Marine Insurance Policy Issuance –
Once paid the Marine Insurance premium, the insurer issues the policy and sent it to the policyholder.
4. Insurable Interest –
It establishes that an insured has an insurable interest in the subject matter in such a way, that he may benefit from the safety or the arrival of the insurable item or even affect by its loss or damage.
See: Reasons to buy a marine insurance policy
5. Utmost Good Faith –
The insurance contract is based on the principle of utmost good faith. Furthermore, it means every person who enters into an agreement of insurance has a legal obligation to act with honesty towards the insurance company. It means a person should always be truthful and accurate while giving information to the insurer. Also, expects the insurance company to act in good faith while dealing with its policyholders.
6. Doctrine of indemnity –
Marine insurance is an indemnity policy under which the insurer agrees to compensate for loss or damage in consideration of the timely payment of premiums.
7. Doctrine of Subrogation –
The aim of this act is that the policyholder should not get more than the actual loss or damage. While settling the claim, the insurer has all rights to reduce the sum received by the insured from the third party.
8. Warranties –
It is that by which the assured undertakes the responsibilities that there are some particular things which shall or shall not be done. Similarly, it means there are such statements according to which the policyholder promises to do or not to do certain things or to fulfil or not to fulfil certain conditions. Detailing these more stringently because the insurance contract can come to an end in the case, of breaking a warranty, even if the warranty was material.
9. Proximate Clause –
It is a key principle of insurance and is mainly concerned with how the loss or damages happened and whether they happened due to an insured peril. The insurer will be liable to compensate for any loss or damage proximately caused by insured perils of the sea.
10. Assignment –
It is feasible to assign the insurance policy unless it contains terms that expressly prohibit the assignment. A marine insurance policy can be assigned by endorsement there on or in some usual manner.
Faq
Q) What is a marine insurance policy contract?
A) A marine insurance policy contract is a legal agreement between the insurer and the insured party that provides coverage for risks associated with marine activities. This type of insurance typically covers damages or losses to ships, cargo, and other marine-related properties.
Q) What does a marine insurance policy contract typically cover?
A) A marine insurance policy contract typically covers risks such as damage to the vessel, theft of cargo, liability for injuries or property damage caused by the vessel, and other related risks. The specific coverage will depend on the terms and conditions outlined in the policy contract.
Q) How is the cost of a marine insurance policy determined?
A) The cost of a marine insurance policy is determined based on various factors, including the value of the cargo, the route taken, the type of vessel used, the level of coverage required, and the history of the insured party.
Q) Are there different types of marine insurance policies?
A) Yes, there are different types of marine insurance policies tailored to specific needs, such as hull insurance for the vessel itself, cargo insurance for the goods being transported, liability insurance for third-party claims, and freight insurance for loss of revenue due to delays.
Q) How do I file a claim under a marine insurance policy?
A) In the event of a loss or damage covered by the marine insurance policy, the insured party should notify the insurance provider immediately and provide all relevant documentation, such as the bill of lading, survey reports, and proof of loss. The insurance company will then assess the claim and provide compensation accordingly.
About The Author
Simran
MBA Insurance and Risk
With extensive experience in the insurance industry, Simran is a seasoned writer specializing in articles on marine insurance for SecureNow. Drawing from 5 years of expertise in the field, she possesses a comprehensive understanding of the complexities and nuances of marine insurance policies. Her articles offer valuable insights into various aspects of marine insurance, including cargo protection, hull insurance, and liability coverage for marine-related risks. Renowned for their insightful analysis and informative content, Simran is committed to providing readers with actionable information that helps them navigate the intricacies of marine insurance with confidence.
