PRACTICE OF  GENERAL INSURANCE
MARINE INSURANCE <ul><li>ORIGINATED IN ENGLAND  owing to frequent movement of ships over high seas for trade. </li></ul><u...
Marine Insurance (Contd.) <ul><li>COVERS THREE MAIN INTERESTS  in a marine venture :- </li></ul><ul><ul><li>Hull  – it rep...
MARINE INSURANCE COVERAGE <ul><li>FORTUITOUS   - sea accidents or casualties caused without willful intervention of human ...
MARINE POLICY <ul><li>MANDATORY REQUIREMENTS (MARINE INSURANCE ACT, 1963 ) </li></ul><ul><li>Name of assured, or someone r...
HULL INSURANCE <ul><li>HULL  refers to ocean going vessels (ships, trawlers, barges, fishing vessels, etc) </li></ul><ul><...
TYPES OF HULL POLICIES <ul><li>HULL AND MACHINERY INSURANCE :  cover   to protect ship owner from partial/total loss </li>...
Types Of Hull Policies (contd.) <ul><li>LOSS OF HIRE INSURANCE :  protects owner from loss incurred incase ship is strande...
CARGO INSURANCE <ul><li>Cargo insurance are codified under the Institute of Cargo Clauses (A), (B) and (C).  </li></ul><ul...
FREIGHT   INSURANCE <ul><li>Profit a ship owner makes by transporting his own cargo or the cargo of another person </li></...
MOTOR  INSURANCE <ul><li>Governing Act  – Motor Vehicles Act 1988 to mainly safeguard interests of pedestrians </li></ul><...
THIRD PARTY INSURANCE <ul><li>LIABILITY COVERAGE </li></ul><ul><li>Liability to TP injury/death -unlimited </li></ul><ul><...
FIRE INSURANCE <ul><li>PERILS COVERED </li></ul><ul><li>Fire, Lightning, Explosion, Aircraft damage, Riot, Strike, malicio...
FIRE - SPECIAL POLICIES <ul><li>FLOATER  – cover stocks at various specific locations under one Sum  Assure, beneficial fo...
CONSEQUENTIAL LOSS (FIRE) INSURANCE <ul><li>WHY THIS COVER-  Fire insurance provides indemnity against material damages, i...
HEALTH INSURANCE <ul><li>MEDICLAIM POLICY (Individual)  –  reimbursement of room, boarding, nursing, surgeon, Doctors fees...
SOME MISCELLANEOUS INSURANCE <ul><li>PERSONAL ACCIDENT INSURANCES </li></ul><ul><li>GROUP POLICY  </li></ul><ul><li>BHAVIS...
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Chapter 02 principles and practice of general insurance

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Chapter 02 principles and practice of general insurance

  1. 1. PRACTICE OF GENERAL INSURANCE
  2. 2. MARINE INSURANCE <ul><li>ORIGINATED IN ENGLAND owing to frequent movement of ships over high seas for trade. </li></ul><ul><li>PROVIDES COVER FROM LOSS suffered due to </li></ul><ul><ul><li>marine perils </li></ul></ul><ul><ul><li>loss incurred during shipment of cargo over water bodies like rivers, lakes and inland waterways. </li></ul></ul><ul><ul><li>ships under construction, and ships transporting consignment </li></ul></ul><ul><li>GOVERNED BY - Indian Marine Insurance Act 1963 </li></ul>
  3. 3. Marine Insurance (Contd.) <ul><li>COVERS THREE MAIN INTERESTS in a marine venture :- </li></ul><ul><ul><li>Hull – it represents the ship; </li></ul></ul><ul><ul><li>Cargo – it is the goods being transported by the vessel; and </li></ul></ul><ul><ul><li>Freight – is the profit or earnings of the ship at the end of a marine venture . </li></ul></ul><ul><li>Marine insurance policy covers not only sea voyage but also purely inland transits through any mode like rail, road,multimodal, even by post </li></ul>
  4. 4. MARINE INSURANCE COVERAGE <ul><li>FORTUITOUS - sea accidents or casualties caused without willful intervention of human (an element of chance or ill luck) </li></ul><ul><li>INSURED PERILS </li></ul><ul><li>Fire, Pirates and Thieves, Stranding </li></ul><ul><li>Barratry - act willfully committed by master and crew against owner or charterer of ship, </li></ul><ul><li>Jettison – throwing of cargo overboard due to either a deliberate act or at the wake of grave danger </li></ul><ul><li>Taking at sea – when vessel is captured by enemy or others </li></ul><ul><li>Foundering at Sea – ship has been reported lost after a stipulated time </li></ul><ul><li>Collision – ship collides with another ship or with other objects, causing damage </li></ul><ul><li>UNINSURED PERILS </li></ul><ul><li>Wear and Tear, Leakage, Breakage of goods, Inherent Vice, Loss by Rats and Vermin </li></ul>
  5. 5. MARINE POLICY <ul><li>MANDATORY REQUIREMENTS (MARINE INSURANCE ACT, 1963 ) </li></ul><ul><li>Name of assured, or someone representing him; </li></ul><ul><li>object being insured and perils thereof </li></ul><ul><li>The voyage, period of time, or both; </li></ul><ul><li>Insured sum; </li></ul><ul><li>Name of insurer </li></ul><ul><li>TYPES OF POLICIES </li></ul><ul><li>Time and Voyage Policy </li></ul><ul><li>Valued/Unvalued Policy (settled value of subject matter) </li></ul><ul><li>Floating policy </li></ul><ul><li>Open Policy </li></ul>
  6. 6. HULL INSURANCE <ul><li>HULL refers to ocean going vessels (ships, trawlers, barges, fishing vessels, etc) </li></ul><ul><li>REGISTRATION OF INDIAN SHIPS - The Indian Register of Shipping (IRS) </li></ul><ul><li>CERTAIN TERMS USED TO MEASURE A SHIP </li></ul><ul><li>Register Tonnage – Gross, Net and Dead </li></ul><ul><li>TYPES OF VESSELS </li></ul><ul><li>Ocean going or general cargo vessels, Dry bulk carriers, Tankers or Liquid bulk carriers, Combination carriers, Container vessels, Passenger vessels </li></ul>
  7. 7. TYPES OF HULL POLICIES <ul><li>HULL AND MACHINERY INSURANCE : cover to protect ship owner from partial/total loss </li></ul><ul><li>DISBURSEMENT AND INCREASED VALUE INSURANCE : insurance for all those items not included in hull insurance estimation (upto 25 percent of insurance value) </li></ul><ul><li>PREMIUMS OF INSURANCE : as amount of insurance cover is very high, so are premiums. So, it is safe to insure premiums, including premium of the premium reducing policy. </li></ul><ul><li>RETURNS OF PREMIUM : policy is also applicable for a total loss situation. It is to insure the prospective returns in case of total loss </li></ul>
  8. 8. Types Of Hull Policies (contd.) <ul><li>LOSS OF HIRE INSURANCE : protects owner from loss incurred incase ship is stranded due to some failure in machinery </li></ul><ul><li>LOSS OF PROFITS INSURANCE : protects the Charterer’s in case of total loss </li></ul><ul><li>SHIP REPAIRER’S LIABILITY : provides cover to losses suffered other than repairs, due to negligence or an accident </li></ul><ul><li>BUILDERS’ RISK POLICY : covers risk of builders from beginning of construction, till delivery including all test and trials conducted before the delivery </li></ul><ul><li>CHARTERER’S LIABILITY POLICY </li></ul><ul><li>WAR RISKS </li></ul>
  9. 9. CARGO INSURANCE <ul><li>Cargo insurance are codified under the Institute of Cargo Clauses (A), (B) and (C). </li></ul><ul><li>RISKS COVERED BY ICC CLAUSES </li></ul><ul><li>All perils, Fire (including while extinguishing) </li></ul><ul><li>Collision with another vessel/other objects </li></ul><ul><li>Disposal of cargo at a port of distress </li></ul><ul><li>Lightning, earthquakes, volcanic activity </li></ul><ul><li>Loss caused due to incursion of water </li></ul><ul><li>Package lost/ damaged in loading and unloading process (called sling loss) </li></ul><ul><li>GENERAL EXCLUSIONS CLAUSE - willful misconduct, breakage, financial default </li></ul>
  10. 10. FREIGHT INSURANCE <ul><li>Profit a ship owner makes by transporting his own cargo or the cargo of another person </li></ul><ul><li>TYPES OF FREIGHT : </li></ul><ul><li>Prepaid Freight – paid in advance by owner of goods, at his own risk. Covers this while insuring goods. </li></ul><ul><li>Freight payable on delivery – paid once goods are delivered. If carrier fails to deliver goods, then they are not entitled to freight. </li></ul><ul><li>Lump sum Freight – when carrier is not required to deliver entire cargo, but a sizeable amount of cargo should be delivered. </li></ul><ul><li>Time charter hire – paid to ship owner by owner of goods for making use of the ship for transporting his goods </li></ul>
  11. 11. MOTOR INSURANCE <ul><li>Governing Act – Motor Vehicles Act 1988 to mainly safeguard interests of pedestrians </li></ul><ul><li>Mandatory – all vehicles shall be covered by Third Party Insurance </li></ul><ul><li>CERTIFICATE OF INSURANCE AND COVER NOTE </li></ul><ul><li>Issued by IC, includes a cover note complying with the prescribed requirements </li></ul><ul><li>COMPULSORY INSURANCE - COMPRISES </li></ul><ul><li>Liability arising out of bodily injury or death of third party or damage to his property. </li></ul><ul><li>Compulsory insurance of </li></ul><ul><li>passengers carried by - hired vehicles, reason of a contract of employment, an employee under Workmen’s Compensation Act </li></ul><ul><li>Exceptions – State owned vehicles </li></ul>
  12. 12. THIRD PARTY INSURANCE <ul><li>LIABILITY COVERAGE </li></ul><ul><li>Liability to TP injury/death -unlimited </li></ul><ul><li>Limited to any one accident </li></ul><ul><li>Goods vehicle - Workmen’s Compensation Act </li></ul><ul><li>Hired passenger vehicle – Rs. 15,000 </li></ul><ul><li>Any vehicle other – Rupee value of actual liability. </li></ul><ul><li>Any damage to property - Rs. 6,000 </li></ul><ul><li>TP cover cannot be terminated without proof of existence of another insurance </li></ul><ul><li>INSURER’S DUTY TO THIRD PARTY </li></ul><ul><li>IC has no rights to avoid or reject the liability but has right to defend </li></ul><ul><li>Liability is determined by court. Liability is unlimited. Insurer has right to receive notice of case proceedings </li></ul>
  13. 13. FIRE INSURANCE <ul><li>PERILS COVERED </li></ul><ul><li>Fire, Lightning, Explosion, Aircraft damage, Riot, Strike, malicious damages, tempest, flood, landslide, bursting, missile testing operations, bush file, terrorist cover (with extra premium) </li></ul><ul><li>COVER MAY BE EXTENDED WITH EXTRA PREMIUM (ADD-ON COVERS) </li></ul><ul><li>Architect's, surveyor's consulting engineers fees, impact damage, bursting and/or overflowing of water tanks </li></ul><ul><li>Removal of debris, deterioration of stock in cold storage, forest fire, earthquake, loss of rent, start-up expenses </li></ul>
  14. 14. FIRE - SPECIAL POLICIES <ul><li>FLOATER – cover stocks at various specific locations under one Sum Assure, beneficial for insured </li></ul><ul><li>DECLARATION POLICIES – takes care of frequent fluctuations in stocks/stock values; monthly declaration to be made; refund of premium not to exceed 50% of premium paid </li></ul><ul><li>REINSTATEMENT VALUE POLICIES – fire policy with reinstatement value clause attached with special provisions; in the event of loss amount payable is cost of reinstating property of same kind or type or by new property </li></ul><ul><li>INDUSTRIAL ALL RISKS POLICY – cover designed for industrial risks (both manufacturing and storage facilities) </li></ul>
  15. 15. CONSEQUENTIAL LOSS (FIRE) INSURANCE <ul><li>WHY THIS COVER- Fire insurance provides indemnity against material damages, it may result to total/partial interruption of insured's business. Losses may be:- </li></ul><ul><li>Net Profit </li></ul><ul><li>Standing Charges </li></ul><ul><li>THIS POLICY PROVIDES indemnity for loss of Gross Profit (NP + SC) </li></ul><ul><li>PERILS COVERED similar to Fire Policy. </li></ul><ul><li>EXTENSIONS PERMISSIBLE to cover special perils – failure of electric/gas/water supply, damage to property </li></ul>
  16. 16. HEALTH INSURANCE <ul><li>MEDICLAIM POLICY (Individual) – reimbursement of room, boarding, nursing, surgeon, Doctors fees, artificial limbs, organs, similar expenses </li></ul><ul><li>DOMICILIARY HOSPITALIZATION BENEFIT – medical treatment at home, cannot be removed to hospital condition such/no accommodation </li></ul><ul><li>GROUP MEDICLAIM POLICY – available to corporate, institutions subject to min. no of persons covered; similar to Individual Mediclaim with minor difference </li></ul><ul><li>CANCER POLICY – granted to members of Cancer Patients Aid Association </li></ul><ul><li>CRITICAL ILLNESS INSURANCE – contracted during period of insurance and survived atleast 30 days thereafter </li></ul><ul><li>OVERSEAS MEDICAL POLICY – illness suffered or accident sustained by Indian resident during overseas trips for specified purposes </li></ul><ul><li>CORPORATE FREQUENT TRAVELERS </li></ul>
  17. 17. SOME MISCELLANEOUS INSURANCE <ul><li>PERSONAL ACCIDENT INSURANCES </li></ul><ul><li>GROUP POLICY </li></ul><ul><li>BHAVISHYA AROGYA POLICY </li></ul><ul><li>VIDESH YATRA POLICY </li></ul><ul><li>GOLFER’S INDEMNITY INSURANCE </li></ul><ul><li>CRIME INSURANCE </li></ul><ul><li>BURGLARY INSURANCE </li></ul><ul><li>BAGGAGE INSURANCE </li></ul><ul><li>BANKERS’ INDEMNITY INSURANCE </li></ul><ul><li>FIDELITY GUARANTE INSURANCE </li></ul><ul><li>MONEY IN TRANSIT INSURANCE </li></ul><ul><li>JEWELLERS’ BLOCK INSURANCE </li></ul><ul><li>HORSE / DONKEY / MULE / PONY INSURANCE </li></ul><ul><li>KIDNAP & RANSUM INSURANCE </li></ul><ul><li>PACKAGE INSURANCE POLICY – HOUSEHOLD, SHOPKEEPERS </li></ul>
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