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MA’AM ARIBA KHAN

 Presented By:

• Aisha Akram

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• Fehmida Akram 3

Roll# 11
• Madiha Latif
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 History of Marine
Insurance
One of the earliest forms of insurance

Established in the Mediterranean Sea in

2,000BC
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Emergence as distinct commercial agreements

 Commercial
Agreements

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Bottomory Respondentia 6
 BOTTOMRY

Bottomry was a transaction protecting an

owner from a financial loss if his ship was
destroyed.
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 Respondentia

In Respondentia the ship’s cargo ,rather than

the ship itself, was the subject of the loan.

A merchant, placing a cargo on a ship, would

take out a loan using cargo as a collateral. 8
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Therefore,

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 Marine Insurance
“Marine Insurance covers the loss or damage of ships,
cargo, terminals, and any transport or property by
which cargo is transferred, acquired, or held between
the points of origin and final destination.”

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 Need For Insurance

Exporters and importers face all the time

uncertainties of loss of their goods.
Insurance is used to protect their financial
interests against such risks and actual losses. 11
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Without adequate insurance and protection of

the interests of those with goods in transit,
international trade would be negatively
affected.
 Subject Matter
Insured
Every lawful marine adventure may be insured:
Cargo
Freight
Voyage
Ships 12
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Goods
Movables
Ventures undertaken by a company
 Risks in Marine
Insurance
• Risks are of many kinds.
• Different risks mean different losses,
• and different risks are covered by different insurance clauses
• and different insurance clauses mean different premiums.
• So we need to have a good understanding of the different risks 13
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and losses before we know how to effect insurance.
 Risks …..
• In marine insurance, risks fall into

• Perils of the sea and

• Extraneous risks 14
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 Perils of the Sea
• Perils of the sea can further be either natural calamity
or fortuitous accidents:
• Natural calamity refers to the perils such as vile
weather, thunder storm and lightening, tsunami,
earthquake, flood, volcanic eruption, etc.
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• Fortuitous Accidents are such risks as ship striking 15

upon the rocks, ship sinking, ship collision, colliding

with icebergs or other objects, fire, explosion, ship
missing, etc.
 Extraneous Risks
• Extraneous risks can further be general extraneous
risks and special extraneous risks.
• Risks caused by theft, rain, leakage, breakage,
dampness, heating, hooking and rusting are general
extraneous risks.
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• Risks caused by war, strikes, failure of delivery etc. 16

are special extraneous risks.

 Losses
• Losses sustained by the insured due to the risks listed above
come from not only the loss of the goods or the damage done to
the goods, but also from the expenses the insured sustained in
rescuing the goods in danger.
• The losses and the damages done to the goods can fall into total
loss and partial loss. 17
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• Total Loss includes Actual Total Loss and Constructive Total
Loss.
• Partial Loss means that the loss or damage done to the goods is
only partial. Partial loss can be either general average or
particular average.
 Total Loss
• Actual Total Loss
means the whole lot of the
consignment has been lost or
damaged or found valueless
upon arrival at the port of
destination.
• Constructive Total Loss
is found in the case where the
actual total loss of the insured
goods is unavoidable, or the
ship or the consignment has to
be abandoned because the 18
cost of recovery would exceed 18
the value of the ship and the
consignment in sound
condition upon the arrival of
the port of destination.
 Partial Loss
• General Average is in • Particular Average losses
use when both the ship and borne by the owner of the
the consignments on board ship or cargo due to direct
are endangered and the
damage to their property.
captain intentionally and
reasonably does some
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sacrifices or makes some 19

expenses for the safety of

the ship and the
consignments on board.
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 MARINE INSURANCE

OCEAN MARINE INLAND MARINE

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SEA RISKS LAND RISKS

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 Ocean Marine
Insurance

• Insurance for sea-going vessels,

including liabilities connected with
them, and their cargoes.
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• provides protection for goods
transported over water
• one of the oldest forms of
transportation insurance
 LOSS
EXPOSURES

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Marine hull Marine cargo freight losses Liability loss

 HULL
Insurance

• This exposure
includes the value of
ship and its
equipment 25
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• This insurance offers

protection to owners
of all types of ships
for losses or
damages to their
 HULL
INSURANCE

• Perils insured against

this insurance:
 Stranding
 Sinking 26
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 Fire
 Collision
 etc
 MARINE CARGO
INSURANCE
• This exposure includes the value
of goods being shipped.
• This insurance is available for
shippers of goods from one
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place to another. 27
 MARINE
CARGO
INSURANCE
• Terms of insurance:
‗ Specific
‗ All risks
• Two types of policy
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―Special policy 28

―Open cargo policy

 Loss of
freight

• The loss of income

the ship-owner would
have earned if the
cargo or passenger 29
had been delivered 29

rather than damage

or lost.
• This policy covers the
“business income”
 Liability loss

• This loss exposure is a loss

a ship owner would suffer
if the ship were held to be 30
legally responsible for 30

negligently injuring other

people or their property
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 INLAND MARINE
INSURANCE

• A broad form of insurance,

generally covering articles in
transit as well as bridges,
tunnels and other means of 32
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transportation and
communication
 Inland Marine
Insurance
• marine insurers are allowed to
insure property in the following
categories:
• • Imports and exports;
• • Domestic shipments; 33
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• • Instrumentalities of
transportation and
communication (including
bridges, tunnels, transmission
towers and more)
 Inland Marine
Insurance
• Certain types of property owned
by
individuals (including jewelry,
furs, musical instruments and
more) 34
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• Certain types of property related
to a
• business or occupation (including
mobile equipment, property
under bailment, electronic data
 MAJOR
TYPES OF
POLICY
1) Time policy
2) Voyage policy
3) Mixed policy
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 1) Time policy
• A certain time limit
• usually not exceeding
12 months.
• In using a time policy,
the most important 36
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question is whether
the loss occurred at a
time in which the
policy was running.
 2) Voyage policy

• This is a policy that

operates for the
period of the voyage.
• For cargo,, the cover
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is from warehouse to 37

warehouse.
• The policy will not
apply if the actual
voyage and/or ports
are different from
 3) Mixed policy

• This is a policy that covers the

subject matter for the voyage
within a time period.
• It is used to cover the cargo from 3838
warehouse to warehouse with a
time limit.
• The cargo has to be warehoused
within 60 days after discharge or
the policy will no longer cover the
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 Common Exclusions
Loss, damage or expenses attributable to willful misconduct of
the assured
Ordinary losses
Loss, damage or expense caused by nature of the subject matter
insured
Loss/damage due to insufficient, unsuitable or defective
packing (including stowage)
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Loss/damage or expenses proximately caused by delay even if 40
the delay is caused by a peril insured against
Loss damage due to un seaworthiness of the vessel or craft,
container
Wars, strikes and civil commotions unless covered under
separate endorsements.
 Marine Insurance

• Marine Insurance

Marine Cargo
Marine Umbrella Liability 42
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Marine Hull and Machinery
It is providing only
marine cargo
insurance.
Marine Cargo Import
Marine Cargo Export
Marine Umbrella Liability
Marine Hull
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 Calculation of
Premium
The seaworthiness of the ship
Experience and ability of captain and crew
Potential of loss of the cargo
The route scheduled to be traveled and season of the 46
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year
The coverage provided by the policy
What is Good in Insuring?

•Thus marine insurance acts as a

partner who stands behind the
owners of goods in the event of a
loss and allows them to concentrate
on their main business fearlessly.
 How Marine Insurance
is obtained?
• To obtain the cover following information is
required:
• Client’s Name & Address, Phone Numbers.
• Bank
• Description of goods 48
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• Value
• Ship/Transporter
• Destination
 How Marine Insurance
is obtained?
This information should be sent to the
following address:
Adamjee Insurance Co Ltd
Adamjee House
I I Chundrigar Road, Karachi 49
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Phone: 241 2623–26, Direct: 241 6381,
Fax: 241 2627
 How do I file a marine
insurance claim?
• This can be a long process, but it is necessary for you
to recoup your losses.
Instructions:
• Phone your agent or company immediately.
• Take pictures of the damage as soon as possible. 50
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• Get several written estimates of what it will cost to

repair your boat.
 How do I file a marine
insurance claim?
Call a claims representative from the insurance
company to make your claim. The claims
representative may come out, take pictures and help
you fill out the claims form.
Wait for your check to arrive from the insurance
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company. 51

Receive your check from the insurance company,

which you can then use to repair your boat.
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Container Ship
•SS Central America -Gold Ship
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