Marine insurance provides coverage for losses to ships and cargo during transportation by sea. It is one of the oldest forms of insurance, originating in England to protect trade. There are several types of marine insurance including hull insurance for ships, cargo insurance, and freight insurance. Policies are based on utmost good faith between insurer and insured and indemnify the actual losses incurred. Warranties must be strictly adhered to otherwise the insurer may avoid liability. Subrogation and contribution ensure the insured does not profit from another source. The proximate cause must be the peril insured against for a valid claim.

1. Marine Insurance

2. INTRODUCTION
Insurance connected with the risks of
transportation of goods, is one of the oldest and
most important forms of insurance. The value of
goods shipped by the business firms each year cost
billions of rupees. These goods are exposed to
damage or loss from numerous perils associated
with transportation. These goods can be protected
by marine insurance contracts.
It is an important element of the general insurance
industry .
It essentially provides cover for the losses suffered
due to marine perils.

3. History
Marine insurance as we know it today, can be
described as mother of all insurances .
It is believed to have originated in England
owing to the frequent movement of ships over
high seas for commerce and trade.

4. In India, the marine insurance is regulated
By the Indian ‘maritime insurance act, 1963’.
Which is based on the original ‘marine insurance
Act, 1906’.
Prior to the development of marine insurance,
the people across the world, had a system of
pooling their contributions so that if any one of
them suffers loss during voyage, he would be
compensated from the pool.

5.  Today marine insurance has assumed a vast
dimensions due to ever expanding trade across
the globe.
 It involves large shipping companies that require
protection, not only for their costly fleet against
the perils of the sea, but also to the cargo being
carried in each of these ships.
 The value of each ship and the cargo carried
therein, may be costing millions of rupees to the
owners.

6. DEFINITION OF MARINE INSURANCE
Marine insurance is a contract under which the
insurer undertakes to indemnify the insured in the
manner and to the extent thereby agreed against
marine losses, incidental to marine adventures. It
may be defined as a form of insurance covering loss
or damage to ‘vessels’ or to ‘cargo’ during
transportation.

7. Types Of Marine Insurance
 Hull insurance
Insurance of the ship (vessel and its equipments)
 Cargo insurance
Insurance of the goods transported through ship.
 Freight insurance
The amount to be paid to the shipping company on
the safe arrival of goods.

8. Hull insurance

10. FEATURES OF MARINE INSURANCE
 It is based on ‘Utmost Good Faith’
i.e. Both the insured and the insurer’s must
disclose everything which is in their knowledge
and can affect the contract of insurance.
 It is a contract of ‘Indemnity’
i.e. the insured is entitled to recover only the
actual amount of loss from the insurer.

11. ‘Insurable Interest’ in the subject matter insured
must exist at the time of the loss, it need not exist
when the insurance policy was taken under marine
insurance.
The following persons would deemed to have
‘insurable interest’:
• the owner of the ship
• the owner of the cargo
• a creditor who has advanced money on the security
of the ship or cargo
• the mortgagor and mortgagee
• the master and crew of the ship have ‘insurable
interest’ in respect of: their wages and
• in case of advance freight: the person advancing the
freight has an ‘insurable interest’ if such freight is not
repayable in case of loss.

12.  ‘Warranty’ is a promise by the assured to the
underwriter that something shall or shall not
be done or certain of affairs does or does not
arise. A warranty must be and literally
complied with, as otherwise the insurer may
avoid all liability, from the date of breach.
Warranty is in effect a ‘safety valve’ of the
insurers.

13. TYPES OF WARRANTIES
 Expressed warranty
 Implied warranty

14. Expressed Warranties
These are appearing in the policy itself and needs
to be complied with.
For example:
o Warranted packed in new gunny bags
o Warranted new drums
o Warranted professionally packed
o Warranted sailing within seven days
o Warranted shipped under deck
o Warranted surveyed before shipping etc.

15. Implied Warranties
These are not mentioned in the policy but are fully
binding as express warranties.
For example:
o Seaworthiness of the vessel at the commencement
of the voyage.
o Legality of the adventure.
o Non-deviation

16. Subrogation/Contribution
 Corollary to the principle of indemnity.
 Applies to policies, which are contracts of indemnity.
The purpose of both of these are to ensure that the
assured shall not make profit out of a loss, either
wholly or partly, from another source.
In marine insurance, the right of subrogation arises
only after payment has been made. It is not
customary as in fire and accident insurance, to alter
this by means of a condition to provide for the
exercise of subrogation right before payment of
claim.

17.  Proximate cause
 It is actual cause of loss
 The insure will not be liable for any loss
proximately caused by peril insured against.
 There must be direct and non-intervening
cause.

19. World’s biggest passenger ship
 Royal Caribbean’s Oasis of the Seas is the
world’s largest passenger vessel ever built.
 4300 passenger capacity.
 Five times larger than the Titanic.