» Marine Insurance

In export trade various risk is involved. For these risk the insurance is also available. For cargo risk the marine insurance is available. Marine insurance is an insurance cover for marine cargo, air cargo and post parcels. The purpose of marine (cargo) insurance is to protect goods angst physical loss and damage during transit.
Marine insurance contract is an agreement, by which the insurance company (insurer) agrees to indemnify the owner (insured) of ship or cargo risk, which are incidental to marine adventure. Such contracts are based on the following principle.

(1) Principle of utmost good faith: - The insured must disclose to the insurer all the material facts or circumstances which are known to him ought to be known to him in the ordinary course of business.

(2) Principle of insurable interest: - Insurable interest is understood as an interest in the preservation of a thing or continuance of a life, recognized by law. Thus, one can have an insurable interest only when one would stand to benefit financial by the continuance of the life or object insured otherwise financial loss would result.

(3) Principle of indemnity: - The contract of insurance only indemnifies (made good) a loss resulting from risk covered under the policy.

Detail in the policy

* Name and address of Insure
* Value of goods insure
* Types of risk covered
* Details of goods covered
* Times and period of policy
* Details of agent where claim is to file
* Name and place of shipment and discharge
* Details of transit along with transshipment detail, if any

Who must take the policy

It is depend on the incoterm choose by buyer and seller.

Types of risk covered under the policy

The shipper can cover his risk under the following risk depending upon his need and terms of trade.

1- Institute cargo clauses 'C' (Minimum, an act of men): -

This policy cover loss of a damage to the goods caused by
* Fire or an explosion
* Stranding, grounding, sinking or capsizing of the vessel
* Overturning or derailment of land conveyance
* Collision or contact of vessel, craft or conveyance with any external object other than water.
* Discharge of cargo at port of discharge
* general average sacrifice
* Jettison

The cover extend over the entire period of transit from the time the goods leaves the warehouse at the place of commencement of transit and continues during such transit including deviation (not within the control of insured) and terminates on delivery of the goods at the warehouses at the destination named in the policy or on expiry of 60 days after the completion of discharge from the vessel at the final port.

This policy will not cover the following risk

* Loss, damage or expense caused by delay and inherent vice or nature or the subject matter
* Loss, damage or expense attributable to willful misconduct of the insured
* Ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear of the subject matter insured
* Insufficiency or unsuitability of packing
* Deliberate damage to or deliberate destination of the goods
* Loss, damage or expense arising from the use of atomic weapon or nuclear fission and/ or like reaction or radioactive force.

2 -Institute cargo clauses 'B' (An act of nature and God) :-

This policy covers the loss or damage to goods due to an act of nature or God. This policy also includes Institute cargo clases 'C'. This policy cover the following risk

* Loss or damage to the goods due to earthquake, volcanic eruption or lightning
* washing, overloading
*Loss or damage to the goods caused by the entry of sea, lake, river water into vessel. Craft. Conveyance, container lifts van or place of storage.
* Total loss of any package lost overboard or dropped while loading onto or unloading from vessel or craft.

This policy will not cover the risk comes under Institute cargo clauses 'A'.

3 -Institute Cargo Clauses 'A' (Maximum): -

This policy cover the risk of loss or damage to the goods insured and it is the widest cover. This policy will not cover the risk excluded under Institute cargo clauses'C'

4 -War and SRCC (Strikes, Riots and civil commotion) :-

The shipper can obtain war and SRCC cover along with all the three types of policies by payment of an additional payment. The above cover is granted by attaching institute war clauses (cargo) and institute strike claims (cargo) to the policy of insurance.

Claim procedure

Documents required for claim

* Original invoice and packing list
* Proof of loss
* Document of declaration of consignment

Precaution

Exporter must take care of the following point
* Amount issued is usually 110% of CIF value of goods
* An insurance document is not dated later than the date of shipment
* Amount insured must be stated in the currency of invoice to take care of the exchange fluctuation.
* An insurance company or its agents issue an insurance document. The document issued by the broker is not a good document.
* Overwriting, cutting and handwriting is not allowed on the insurance document