Marine Insurance and INCO Terms

1. MARINE A I R
I N S U R A N C E
& Group 6
Presented By-
28 - Anusha Immanni
24 - Divyanshu Vaish
42 - Kishan Patel
59 - Nishtha Srivastava
45 - Pratyush Goyal
56 - Saumya Soni

2. Marine Insurance
M A R I N E & C A R G O
Marine insurance covers the loss
or damage of ships, cargo,
terminals, and any transport by
which the property is
transferred, acquired, or held
between the points of origin and
the final destination.
A
Covers damage to
ship due to any
mishap like crash
collision or piracy
attacks.
B
Provides coverage
to cargo against any
damage, loss or
misplacement.
C
Covers the loss of
freight boarded on
the ship.
D
Covers life of crew
members and
others on ship.

3. International Maritime Law
2002
Internal Governance matters
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4. Marine Adventure
Expose to maritime perils
Any liability to 3rd party, which may be
incurred by the owner, or any person
responsible for the insured property, is
exposed to maritime perils.
Maritime Perils
“Maritime perils” means the perils
consequent on, or incidental to, the
navigation of the sea, that is to say, perils
of the oceans, fire, war perils, pirates,
rovers, thieves, captures, seizures,
restraints, and detainments of princes
and peoples, jettisons, barratry, and any
other perils, either of the like-kind or
which may be designated by the policy.
Maritime Perils
Source of Income
Any earnings or acquisitions of freight,
commissions, profits, financial benefits,
any security on advances, loans,
disbursements etc., are endangered by
exposure of the insured property to
maritime perils. Ex: Bottomry Bond,
Respondentia Bond.
It is an
adventure
which:
•Perils of the sea
•Fire
•Act of war
•Act of public enemies
•Act of God/Vis Major
•Piracy
•Robbery, theft or
pilferage
•Capture by alien enemy

5. International commercial terms given
by ICC w.r.t Marine Insurance
It the highest standard
of good faith during
disclosure of all
material facts that could
influence the decision
of the other party.
Uberrimae Fidei
As there are differences
in trading practices, to
ensure uniformity, they
are updated form time
to time.
Standardization of
regulations
It was established to
remove all kinds of
possible confusion for
the trade, freight
happening between 2
nations.
Remove Ambiguities
• ICC published a series of standard terms such as Incoterms.
• Every country has its trade agreement.
• Incoterms were developed to streamline the process of international trade
and remove confusion.
• It is used by buyers and sellers and serves as a rule book of international
trade to importers, exporters, legal experts, and insurance & transport
agencies.
It was published for the first time in 1936

6. Rules for Sea & Inland Waterway Transport
The seller fulfils his obligations by placing the goods alongside the ship
nominated by the buyer at the named port of shipment or by procuring the goods
so delivered.
Free Alongside Ship (FAS)
01
The seller delivers the goods by placing the goods on board the vessel
nominated by the buyer at the named port of shipment or procured the goods
already so delivered.
Free on Board (FOB)
02
The seller fulfils his obligations by placing the goods on board the vessel
nominated by the seller at the agreed port of loading or by procuring the goods
already so delivered.
Cost and Freight (CFR)
03
The seller fulfils his obligations by placing the insured goods on board the vessel
nominated by the seller at the agreed port of loading or by procuring the goods
already so delivered.
Cost, Insurance and Freight
04

7. Aviation Insurance
Passenger liability insurance
In-flight insurance
Public liability insurance
The insurance provides coverage for hull losses as well as liability for passenger injuries, environmental and third-
party damage caused by aircraft accidents.
Ground risk hull (non-motion) insurance
Ground risk hull (motion) insurance
01
02
03
04
05

8. Ground Risk Hull
Non-Motion
Insurance
01
This type of
insurance covers
a plane for
damages
sustained while it
is on the ground
but not in motion.
02
This would include
damages from
crime, natural
disasters, animals,
and uninsured
aircraft occurring
when the plane is
grounded and not in
motion.
There are usually three possible situations a plane
can be in: Either it flies, it rolls on the ground or it
stands on the ground (take-off and landing are
considered flying, too).
Plane needs to be in non-motion
This first coverage protects the aircraft
when it is standing still and presumably
incapable of causing self-inflicted damage.
Plane incapable of causing self damage
Damages caused by natural hazards and
disasters like floods, fires, storms or
collapsing hangars are just as covered by
this insurance as accidents with uninsured
vehicles or other planes.
Damages covered by natural hazards
This is a type of aviation insurance that covers a plane for damages sustained while the
plane is in motion. Other insurance policies do not necessarily cover any damages
sustained during motion and so it is very important to understand what this covers and
what it does not in order to determine if this type of policy will work for you. It is
typically the most expensive type of insurance since most accidents happen in the
period that it covers.
In-flight insurance

9. Types Of
Aviation
Insurance
Combined Single
Limit
Combined single limit (CSL)
coverage is a bundled policy
that includes both public
liability and passenger
liability insurance. This type
of coverage has a set limit
per pay-out per accident.
If you have questions about
aviation insurance, call or
stop by Avion Insurance
today. Their experienced and
knowledgeable staff will help
you with anything you might
need in regards to your
aviation insurance policies.
Passenger Liability
Insurance
This type of coverage can
also be mandated for certain
types of pilots and planes
and provides insurance for
any passengers riding in the
plane while the policy holder
is operating it. Passenger
liability insurance provides
money for injuries and final
expenses in the event of a
fatality
Public Liability
Insurance
This type of coverage is
usually mandated by law in
many places. It provides
insurance for damages that
occur to third-party entities
and property. Most places
require that you demonstrate
an ability to pay for damages
that you cause while
operating a plane. This type
of coverage does not pay for
damage done to the plane or
to passengers in the plane
Ground Risk
Hull (Motion)
Insurance
This type of
insurance is similar
to GRH non-motion
insurance except
that it covers
damages sustained
while the plane is on
the ground and in
motion. This
typically includes
damages sustained
during take off and
taxi

10. Types of Marine Insurance
Voyage
Insurance
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Diversion
Insurance
Hull Insurance
Peril
Insurance
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11. Types
MAIN
TITTLE
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12. INSTITUTE
CARGO
CLAUSE Institute Cargo Clause A
Institute Cargo Clause B
Institute Cargo Clause C
The most comprehensive coverage you can purchase, is also known as an ‘All
Risks’ Cargo insurance policy.
It is the most expensive of the three.
Clause A covers maximum risks. It can cover the cargo, container, and
transportation, and any exclusions can be found in the General Exclusion Clauses.
This clause is a more restrictive kind of coverage.
For this reason, you should expect to pay a moderate premium.
This clause, of course, is the most restrictive of the three. It covers only very
limited risks.
Furthermore, most of the situations covered must happen during carriage. The
main aspects of cover include:
•General average
•Fire / explosion
•Vessel grounding / capsizing
A
B
C
This is to specify
what is and is
not covered
when there is
damage or loss
to the shipment.
In the case of this clause, you might only request for the more valuable items in
your cargo to be covered or for partial cargo coverage.
•Collision
•General average sacrifice

13. General Average is a principle of maritime law that essentially establishes that all sea
cargo stakeholders (owner, shipper, etc.) evenly share any damage or losses that may
occur due to the voluntary sacrifice of part of the vessel or cargo to save the whole in an
emergency. The basis behind this principle is that a party who has suffered an extreme
financial loss to protect property belonging to others has the right to be compensated for
such loss.
General Average Clause
There is a General Average Act WHEN and
ONLY WHEN. any EXTRAORDINARY SACRIFICE
or EXPENDITURE is INTENTIONALLY and
REASONABLY made or incurred for THE
COMMON SAFETY or the purpose of
PRESERVING FROM PERIL the property involved
in a COMMON MARITIME ADVENTURE.
Once a vessel owner declares General Average, a neutral
third-party (the General Average adjuster) appointed by the
vessel owner, will determine the applicable costs owed to
and by each stakeholder involved in the vessel voyage. The
adjuster will evaluate which losses qualify for General
Average, the total costs of the incident, as well as the
amount each party owes, etc.

14. General
Average
Events

15. No natural cause
It covers only the damages by
voluntary act
A It does not include damage brought about by
the ordinary action of the wind and waves,
nor gradual deterioration on account of
ordinary use.
B It does not include damage brought about by
a voluntary act, which, if done in a time of
peril for the standard safety, will form a
General Average sacrifice.
C Damages resulting from crew negligence or
from a latent defect in the hull or machinery
are covered under most sets of hull
insurance conditions.
D
Whilst claims for Particular Average under a cargo
policy are usually dealt with by the Insurer’s claims
department, Average Adjusters are often appointed to
process a claim for Particular Average under a ship’s
hull & machinery policy.
Example
Examples of cause of Particular
Average damage are collision, contact
(including stranding and grounding),
heavy weather and fire.
What's covered
Crew negligence, defects.
Rationale
Issues like causation and allowances
need to be addressed and dealt with by a
person with detailed knowledge of the ins
and outs of the different standard sets of
hull insurance conditions and a whole
array of special clauses that may be
agreed to form part of the insurance cover.
Particular Average is a partial
damage to or loss of a ship or
its cargo affecting only the
Shipowner or one Cargo
Owner.
Particular Average Clause

16. War Risk Insurance & SRCC
War risk insurance is an insurance policy that provides
financial protection to the policyholder against losses
from events such as invasions, insurrections, riots,
strikes, revolutions, military coups, and terrorism.
Industries in the aviation
and maritime spheres
may have more specific
war insurance options
tailored to meet their
particular needs.
Shipping companies,
airlines, and businesses
that operate or travel to
high-risk countries may be
eligible to purchase war
risk insurance.
Auto, homeowners, renters, commercial property, fire, and
life insurance policies often have war exclusions.
Strike riot civil commotion
SRCC is an insurance clause that refers to physical loss
or damage directly caused by strikers, locked-out
workers, participation in labour disruption, and various
types of riots.
The ordinary
marine insurance
policy does not cover this
risk. Coverage against it
can be added only
by endorsement.
This clause includes
damage from strikes, riots,
civil commotions, lockouts,
vandalism, and sabotage.

17. The Multimodal Transportation of goods Act provides
for legal liability for loss or damage to cargo.
MTO becomes responsible for the loss or damage to
the cargo entrusted to them for transportation.
MTO Liability Insurance protects transportation
operators/freight forwarders from legal liability arising
from their course of business.
The policy covers legal liabilities arising from physical
loss or damage to cargo while in the care, custody and
control of the insured.
Multimodal Transport Operator
Liability Insurance

18. Party
Logistics
The 1st party logistics to
referred to a firm or
individual that has its cargo
and freight and can
transport goods from one
point to another point.
They are the consigner of
different goods and
products and organises the
transport of products to
their destinations.
A 2nd party logistics involves
transporting goods from a
particular transport area of
the supply chain like rail,
road, sea or air.
They are mainly used for
international transportation
of heavy and wholesale
goods and trading purposes.
It is a supply chain that
primarily concerns the
transportation and delivery of
different products but also
includes various types of
additional services.
The functions of 3PL include
warehousing, terminal
operations, customs
brokerage, supply chain
management and many
more.
1PL
2PL 3PL
4PL
These logistics are often
called Lead Logistics
providers and they are often
treated as consulting
companies for many supply
chains.
They act as a head
administrator and takes care
of every aspect of these
supply chain companies.

19. Hull & Voyage
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20. Deviations
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22. Calculation of premium
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Marine Insurance
Air Insurance
Gross
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24. Perils of the sea
A
A
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25. Companies Offering
Marine Insurance
In India
Looking at the fact that India is
surrounded by water from three sides,
shipping is an important sector. A big
volume of cargo is managed at these
ports, making this insurance an
important requirement. Some of the
companies providing marine insurance in
India are-
•All major banks and financial
institutions
•HDFC Ergo
•TATA AIG
•United India Insurance Company
•Royal Sundaram
•New India Assurance Company Limited
•Bharti AXA

26. Thank You

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https://www.gicouncil.in/insurance-education/types-of-insurance/aviation/
https://avioninsurance.com/aviation-insurance-types/
https://www.bdpinternational.com/bdp-blog/what-is-general-average-and-what-does-it-mean-for-your-cargo
https://traderiskguaranty.com/trgpeak/general-average/
https://www.hayesparsons.co.uk/blog/the-difference-between-institute-cargo-clauses-a-b-and-c
https://www.gicouncil.in/insurance-education/types-of-insurance/marine/
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