The Marine Insurance Blog

Another aspect of maritime piracy today that is often ignored or not discussed is pirate attacks on pleasure craft such as yachts. There are quite a few who sail for recreation and sport, and there have been reported incidents involving pirates in certain areas such as Southeast Asia, the Caribbean and the Indian Ocean. Although these are few in number, the possibility of this can make the experience of cruising dangerous instead of pleasurable. The International Maritime Bureau runs a Piracy Reporting Centre based in Malaysia to monitor seafaring incidents and to spread awareness about piracy. However, their focus is still on commercial vessels, not smaller personal craft.

Mention the word “piracy” to the man in the street and he will think of two things: piracy of optical media including music CDs and movie DVDS, and the romanticized image of the one-eyed pirate and his parrot, or to the younger people, Jack Sparrow. What most people are not aware of is that piracy at sea still occurs, at the cost of billions of dollars worth of goods and assets. While there are regions where piracy has been eradicated, hotspots still remain, particularly in Asia and parts of Europe and Africa. If your cargo shipment or ship will pass through high-risk waters, it pays to have your valuables insured.

by Andrea

The term “Average” has two connotations:(1) In marine insurance, in case of a fractional loss, or emergency repairs to the vessel, average may be affirmed. This conceals circumstances, where, a ship in a storm might have to get rid of certain load to save the ship and what is left behind. “General Average” expects all cargo owners to give or donate to give back the losses to those cargo that has been missing or broken. “Particular Average” is rated on a assembly of cargo owners and not everyone of the cargo owners.(2) In situations where an insured has minimal insurance, “average” will pertain to decrease the amount owed.

by Andrea

An Actual Total Loss refers to the condition where the position is apparent while the Constructive Total Loss refers to the circumstances where a loss is contingent. In reality, a Constructive Total Loss may possibly used to explain a loss where the rate of repair is not economic. The uncommon terms refer to the complexities of establishing a loss wherein there might be no proof of such a deficit. In this value, marine insurance varies from non-marine insurance, where the insured is obliged to establish his loss. By tradition, in commandment, marine insurance was seen as an insurance of “the adventure”, with insurers containing a risk and relevance in the vessel or the cargo rather than an interest in the financial penalties of the subject-matter’s continued existence.

by Andrea

A marine policy as a rule covered only three-quarter of the insured’s accountability concerning third parties. The usual liabilities takes place in defer to conflict with another ship, known as “running down” and wreck removal. Taking part in the 19th century, ship owners hooped as one in communal underwriting clubs identified as Protection and Indemnity Clubs (P&I). This is to cover the outstanding one-quarter liability between themselves. These Clubs are however, present up to this day and develop into the model for other specific and saleable marine and non-marine mutual. Through funds accumulated, reinsurance will be procured; though, if the loss experience is not positive one or more “additional  calls” may be made.

by Andrea

Normally each clause will be marked with the stamp extending beyond both onto the inside cover and to other clauses; this  is used to keep away from  the replacement or removal of clauses. Since marine insurance is characteristically guaranteeing on a contribution basis, the MAR form begins in lawful terms. Legal responsibility in the policy is more than a few and not joint. In general, marine insurance is divided between the vessels and the cargo. Insurance cover of the vessels is normally famous as “Hull and Machinery” (H&M). Meanwhile, a more limited form of cover is “Total Loss Only” (TLO), commonly used as a reinsurance, which simply protects the full amount  of the vessel and not any fractional loss.

by Andrea

The Marine Insurance Act comprises of typical policies which parties were at right to employ if they wished. For the reason that every term in the policy had been weathered at least two centuries of judicial precedent, the policy was extremely comprehensive. However, it was also uttered in rather archaic terms. In 1991, the London market generated  a new policy wording identified as the MAR 91 form and using the Institute Clauses. The MAR form is purely a broad-spectrum declaration of insurance; the Institute Clauses are drawn on to embark the aspect of the insurance cover. In practice, the policy provide evidence that consists of the MAR form functioned as a cover, with the Clauses stapled to the inside.

by Andrea

The current sources of marine insurance law was time-honored in England in 1601 by a devoted chamber of assurance which was divided from the other Courts. Lord Mansfield and Lord Chief Justice started merging the law of merchant and common law philosophies in mid-eighteenth century. The founding of Lloyd’s of London, a rival insurance companies, principally preserves and forms the basis of almost every recent practice. The evolution of the London insurance in the market led to the equality of policies and judicial guide that further develops marine insurance law. In 1906, the Marine Insurance Act was approved which codified the previous common law; it is both an exceptionally comprehensive and brief piece of work. Even though the title of the Act refers to marine insurance, the universal philosophies have been added to all non-life insurance.

by Andrea 

Overdue insurance:  kind of insurance which is currently out of date due to innovations in communication. It was an untimely form of reinsurance and was acquired by an insurer when a ship was behind schedule arriving at the destination harbor. The risk here was the ship might have been gone but, just as might have been late. The past due insurance of the Titanic was legendary countersigned on the doorstep of Lloyd’s.

 Cargo insurance: Cargo insurance is underwritten at the Institute Cargo Clauses, by means of reporting on an A, B, or C basis; A having the broadest cover and C the most controlled. Valuable cargo is known in marine insurance as specie.

by Andrea

Listed below are various types of specialist policy that exists:

Newbuilding risks: This hides the risk of damage to the hull all together as under construction.

 Yacht Insurance: Insurance of recreation vehicle commonly known as “yacht insurance” and thus, comprises of liability treatment.

War risks: This type of policy protects, at an added premium, against the threat of defeat in a war zone. This was established by the London-based Joint War Committee,  that was moved lately to contain the Malacca Straits as a battle risks area due to piracy.

Increased Value (IV): guards the ship owner opposed to any discrepancy between the insured worth of the vessel and the market price of the vessel.