Here are various clauses covered under marine insurance policy=
- Valuation Clause= Here the value of the subject is the value as decided between both the parties. In case of any loss or damage, the compensation amount would not exceed the amount as stated in the marine insurance policy.
Case: K.S Shipping is planning to buy a marine insurance policy. It approaches one of the insurers who computes the value of the ships for which it wants to buy the insurance and decides its value. It means, in case of any loss or damage, the compensation would not be more than the value of the item as mentioned in the policy document.
- ‘At’ and ‘From’ Clause= It signifies to the time when the risk would start. As per the clause, the risk cover would start when the ship is there at the port for the departure and from the time it leaves the port.
Case: L.S Shipping buys a marine hull insurance which clearly states the words, ‘at and from Chennai’, it means, the risk will be covered when the ship is at Chennai port and also when it leaves this port.
- Sue and Labour Clause= If the policyholder spends some money in order to save goods from an impending loss or damage, he/she can recover the same amount from the marine insurance company.
Case: L.S Automobile’s consignment was underway when it got the news that the political conditions in the buyer’s country, i.e., Malaysia were not favourable. Due to unrest prevailing there, L.S Automobile decided to divert its consignment to Sri Lanka so that later it could send the goods from there to Malaysia. As L.S Automobile had to incur extra costs in order to reach Sri Lanka and secure goods, its marine insurer agreed to bear those extra expenses. L.S Automobile made efforts to save goods and therefore, the insurer covered them.
- Warehouse to Warehouse Cause= It covers risks to goods which may arise from the time they leave the consignor’s warehouse until they reach the consignee’s warehouse.
Case: As L.S Engineering has a marine insurance policy when it sends goods to a buyer situated in Chennai, the insurance cover starts from the time goods left the warehouse of L.S Engineering till they reach the consignee’s warehouse.
- Change of voyage= All the details with regard to voyage, including, the ports of departure & arrival, the route to be followed is clearly defined in the policy document. In case of any deviation, the marine insurance company would be relieved of liability. Even if a policyholder changes the route and later takes the same route, it will still be considered as a deviation.
Case: F.S Shipping has purchased a marine insurance policy for all its ships as the company exports goods to Middle-East. At the time of purchasing the policy, F.S Shipping has clearly stated the route which these ships will take along with the details of the port of departure and arrival. In case, there is a deviation in the route, the same needs to be communicated to the insurer otherwise, no coverage will be offered.
- Touch and Stay Clause= As per the clause; the ship should go and stay only at those points which are clearly mentioned in the marine insurance policy. In case the ports are not mentioned in the policy document, the ship must take the customary route and stay at the port which comes on that route In case the ship goes to any other port, it will be termed as the deviation.
Case: M.J Shipping has a marine insurance policy which clearly states the names of all ports where its ships will stay. In case, its ship would stay at a different port; the insurer would not cover the same.
- Inchmaree Clause= This clause covers that loss or damages to ship or machinery which happen due to the negligence of the shipowner or by a defect in the machinery of the vehicle.
Case: K.S Garments has a marine insurance policy. Last year, when it was sending goods to a buyer situated in Nepal, the engine of the vehicle failed and due to which the vehicle met with an accident. Here, marine insurer settled the claim which happened due to a defect in machinery.
- Jettison= It means throwing off certain cargo from the ship and lighten the load during an emergency. It is necessary to do this in order to avoid any marine peril to happen.
Case: The rainwater caused severe damage to the ship of L.K Shipping. At that time, the ship was carrying goods worth Rs 1 crore. In order to save the ship from sinking, L.K Shipping had to throw certain cargo. In this case, L.K Shipping had a marine insurance policy, and the insurer came forward to offer coverage for those goods as well which were thrown off in water as that step was taken to prevent the ship from sinking.
- Memorandum Clause= This clause is there to protect the marine insurance company. Many times, goods are perishable and therefore, get damaged. The clause saves the insurer from paying the small losses related to perishable items.
Case: L.S Confectionary was exporting 100 boxes of ice-creams and candies to a buyer situated in Sri Lanka. Due to the nature of the items, nearly ten boxes got damaged. In this case, though, L.S Confectionary had a marine insurance policy, the insurer was not liable to pay compensation. The goods were perishable, and there were high chances of them to get damaged. Therefore, the insurer did not pay compensation with regards to 10 damaged boxes.