MARINE INSURANCE

-R.GANATRA
-MA MCOM LLM FIII DMMT
-MARIRAJ ASSOCIATES
NEED FOR MARINE
INSURANCE
SECURITY/ SAFETY
COMPLIANCE OF CONTRACTUAL
TERMS.
CUSTOMS LAWS.
LETTER OF CREDIT ( L/C)
REQUIREMENTS.
WHAT IS MARINE
TRANSIT INSURANCE?
HISTORICAL MEANING- Indian,
Chinese, Persian, Western histories.
LEGAL/TECHNICAL MEANING-
Marine Insurance Act 1963
Insurance Act 1938
Insurance of goods in transit by all
modes of transport ( Cargo Insurance)
Insurance of ships plying on water/
under construction/ breakage/
liabilities etc. (Hull)
METHODS OF INSURING
SPECIFIC POLICY ( Single voyage/
transit policy:
For only one specific transit for specific
goods.
Different policies for different transits.
Insurance to be arranged before
commencement of transit.
Client can have selection as to
insurance co , terms, insurance.

SPECIFIC POLICY - 2
Insurance company can also have
selection- acceptance, rates, terms etc.,
Once taken no other process like
declarations, balance, limits control etc.,
Suitable for small time trader.
For client with many transits not very
suitable.
FLOATING/ OPEN/
DECLARATION POLICY
Issued for a period- generally one year.
Covering all agreed dispatches made
during the period.
Terms conditions stable over year.
No selection by client/ insurance co- all
despatches automatically covered.
No need to inform insurance company
before commencement of transit
FLOTING/ OPEN/
DECLARATION POLICY -2
After taking insurance controls required:
per sending limits
per location limits
balance under the policy.
If genuine error in not declaring or wrong
declaring claim admissible.
Premium charged on value of goods in transit.
Insurance company have rights to verify the
records of client.
Sales Turn Over Policy
(STOP)
It is a type of open policy only.
The difference being the basis of
charging premium is sales turnover and
not the value of goods in transit.
All dispatches- inward outward inter
depot + storages can be covered.
Rate of premium not same , it to vary
with the risk, turnover of goods in
transit and covers required.
Sales Turn Over Policy
(STOP)-2
The sum insured to be next years
projected turnover.
Declaration may be once in a year only.
In case of TO less than sum insured
refund of premium allowed.
In case of TO exceeding sum insured
policy over , a second STOP/ Open
policy to be taken.
EXPORT/ IMPORT POLICY
Exports/ Imports covered under the
policy for full transit , including inland
transit in country of exports/ imports +
incidental storages.
Separate clauses for sea and air
transits.
By default cover is WAREHOUSE TO
WAREHOUSE but subject to INCOTERMS
2010.
Sum to be insured CIF +10% or as
required by Letter of Credit.
EXPORT COVERS
CIF INSURANCE Covering CIF value of
goods when exporter is selling on CIF
terms. The amount of insurance to be
adjusted when sale on DAP/DDP.
FOB INSURANCE- sale on FOB/CFR/FCA
etc terms. Cover up to FOB.
EXPORT INCENTIVES INSURANCE
SELLERS INTEREST INSURANCE

IMPORTS INSURANCES
CIF INSURANCE
CUSTOMS DUTY INSURANCE
INCREASED VALUE INSURANCE
INLAND TRANSIT INSURANCE
BUYERS INTEREST INSURANCE
DIFFERENTIAL TERMS INSURANCE.
MARINE LOSS OF PROFITS ( PROJECTS)
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CARGO CLAUSES
Clauses are standard terms and
conditions which are used
internationally.
The most popular are the Institute
Cargo Clauses drafted by I.L.U.
Other clauses are by American
underwriters and by Duetch
(German) underwriters.
ILU clauses are the most widely
used.

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Institute Cargo Clauses (C
)
I ) Fire or explosion.
Stranding grounding sinking capsizing.
Overturning / derailment of land
conveyance.
Collision / contact with external object
other than water.
Discharge of cargo at a port of distress.
II) General average sacrifice.
Jettison.

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Institute Cargo Clauses
(B)
ICC C +
Earthquake, volcanic eruption,
lightning.
Washing overboard.
Entry of sea, lake or river water into
vessel, craft, hold, conveyance,
container, lift van or place of storage.
Total loss of any package lost overboard
or dropped whilst loading on to, or
unloading from vessel or craft.
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Institute Cargo Clauses
Extraneous perils
TPND
Fresh water / rainwater damage.
Hook/ oil damage.
Heating & sweating.
Mud, acid and other damages.
Breakage and/ or leakage
Country damage.
Bursting/ tearing of bags.
Taint Damage.
Loading/ un loading
Malicious Damage (B /C)
Piracy ( B/C)


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Institute Cargo Clauses
(A)
ICC (C ) + ICC (B)
All other perils giving rise to
physical loss or damage
Exclusions involved.
All Risks cover
Does not cover all the losses
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Exclusions- ICC C,B, A
Willful misconduct- insured/agents
Ordinary losses- leakage, breakage,
shortage, wear and tear.
Defective packing- LCL/FCL
inherent vice- perishable goods
Delay- perishable goods
Financial default of carrier
Un seaworthiness of vessels-
Deliberate damage (only in ICC C & B)
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Exclusion -2
War and allied perils
Strike and allied perils.

ADD Ons:-
War risks ( Institute War Clauses)
SRCC ( Institute Strikes Clauses)

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Duration of cover
Policy covers transit.
From suppliers warehouse.
Ordinary course of transit,.
Ends at buyers warehouse.
Subject to insurable interest.
Subject to time limits.
Air transit 30 days instead of 60
days.

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TERMINATION OF TRANSIT
CLAUSE (TERRORISM)
CLAUSE PARAMOUNT.
Terrorism cover only when the goods
are in ordinary course of transit.
Terrorism cover is NOT available during
storage period in course of transit.
On cargo being stored cover ceases and
reattaches when cargo is once again in
transit.
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Inland Transit Clause -C
Fire
Lightning
Cover starts from loading and ends
on unloading at destination rly.
Station or destination.
No warehouse to warehouse cover.
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Inland Transit Clause -B
Fire
Lightning
Breakage of bridges
Collision with/ by carrying vehicle.
Overturning of the carrying
vehicle.
Derailment or accidents of like
nature.
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Inland Transit Clause -A
All risks with EXCLUSIONS.
Wilful misconduct.
Ordinary losses
Defective packing
Inherent vice
War perils
Strikes etc. perils
.
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Inland transit Clauses-
duration
Ware house to ware house for ITC-B &
ITC-A.
After reaching final destination town/
city 7 days maximum.
If rail also included 7 days from final
railway station and not from final city.
If earlier policy is over earlier.
ITC-C only while on the goods are on
truck / railway wagon. On unloading
cover ceases.
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CLAIM PROCEDURE.
Intimation of loss - Carriers/
Bailees -
Insurance Company
Survey - Ship Survey
- Insurance
Survey
Loss Minimisation
Claim on Carriers/ Bailees
Time Limits
Claim Documents

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CLAIM DOCUMENTS
Proof of insurance
Shipping documents
Documents to prove loss/ damage
Proof of loss minimising expenses
Forwarding/ clearance documents
Claim on carriers/bailees
Other documents as required
Claim bill
Letter of subrogation.

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TABLE OF TIME LIMITS- I
AGENCY NOTICE CLAIM
ROADWAY
S/Courier
IMMEDIATEL
Y
180 days
from
L. R.
RAILWAYS
IMMEDIATELY
6 MONTHS
(DT. OF
R.R.)
SEA
CARRIER
3 DAYS
(DELIVERY
)
1 YEAR
(DELIVERY)
PORT
TRUST
IMMEDIATELY 6 MONTHS
(UNLOADING)
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TABLE OF TIME LIMITS- II
AGENCY NOTICE CLAIM
D= damage
ND= Non del
AIRLINES-
DOMESTIC
IMMEDIATELY
IMMEDIATELY
D- 7 DAYS
ND-14 DAYS
INTERNA-
TIONAL
IMMEDIATELY
IMMEDIATELY
D- 14 DAYS
ND-21 DAYS
CUSTOMS BEFORE
CLEARANC
E
6 MONTHS
(PAYMENT)
M.T.O.
IMMEDIATELY
6 DAYS
(DELIVERY)
QUESTIONS???

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THANK YOU
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MARIRAJ
ASSOCIATES
098211 40676
grajkal@yahoo.co.in
mariraj_asct@yahoo.co.in