Nature of marine insurance contract

Definition:

Marine insurance has been defined as a contract between insurer & insured whereby the insurer undertakes to indemnify the insured in a manner & to the interest thereby agreed, against marine losses incident to marine adventure.

Section 2(13) A of the insurance Act 1938 defines marine insurance as follows:

“Marine insurance business” means the business of effecting contracts of insurance upon vessels of any description, including cargoes, freights & other interests which may be legally insured in or in relation to such vessels, cargoes and freights, goods, wares, merchandise & property of whatever description insured for any transit by land or water or both, & whether or not including ware house risk or similar risk in additional or as incidental to such transit & includes any other risk customarily included among the risks insured against in marine insurance policies.

The above definition clearly lays down the following classification of the marine insurance.

(i) Hull insurance:

Insurance of vessel & its equipment are included under hull insurance. There are a number of classifications of vessels such as ocean steamers, sailing vessels, builders, risks, fleet policies & so on.

(ii) Cargo insurance:

It may be written under a single risk policy or floating policies. The cargo may be of any description, for example, wares, merchandise, property, goods & so on.

(iii) Freight insurance:

Freight is to be payable for the carriage of cargoes or if the vessel is chartered, the money to be paid for the use of the vessel. The carrier is unable to earn freight if the goods or property (called cargoes) are not safely transported.

(iv) Liability insurance:

The Marine insurance policy may include liability hazards such as collision or running down. Insurance can also be taken for the expenses involved in non-compliance of rules & regulation without any intention to deceive. It should be clear here that marine perils insurance covers not only the “ocean but also the inland perils.” The perils to be included in the policy are clearly defined & the

Insurer will be liable only for the insured perils.