Marine insurance is such insurance which provides compensation of losses on the hull, cargo, passenger and third party liabilities due to marine risks. There is a definite categorization of various types of marine insurance and different types of marine insurance policies according to the needs, requirements, and specifications of the transporter.
MARINE INSIGHT. 8 12 2010. Electronic. 16 06 2016.http://www.marineinsight.com/maritime-law/different-types-of-marine-insurance-marine-insurance-policies/
Agrawal, RC. your article library.com. Since 1998. Electronic. 16 06 2016.http://www.yourarticlelibrary.com/insurance/11-kinds-of-marine-insurance-policies/42115/
a) Hull Insurance:
Hull insurance is the insurance against loss by the sea transportation. It is the insurance of the ship which includes all the articles and pieces of furniture in the ship. Hull means the full body and machinery of the ship or vessel. If the ship is damaged, the owner of the ship gets indemnity from the insurance company. The ship owner takes a hull insurance to cover the loss or damage to the ship. It may be for any particular journey or for a particular period of time.
b) Cargo Insurance:
The goods sent through waterway is known as cargo. Cargo insurance is also called marine cargo insurance. The owner of the cargo takes a cargo insurance to cover the loss of cargo during the journey. The cargo on the ship is exposed to risks arising from an act of god or enemy, fire, and other perils of the sea. If the cargo is ruined, the owner gets the indemnity from the insurance company.
c) Marine Liability Insurance:
Liability here means compensating the loss of other parties due to our reason. The marine insurance includes liability hazards such as collision or running down. Marine insurance provides the compensation of such liabilities nowadays if insurance has made insurance of such liabilities. A crew member travelling with expensive items, such as laptop computers, gold watches etc. should make sure that he has such items separately insured.
d) Freight Insurance:
The charge receivable by a ship for transporting the cargo is called freight. Sometimes shipping freight is payable on the destination. In such a case, the shipping company may not receive the freight if the goods do not reach the destination. Thus, freight insurance policy provides protection against such loss of freight due to sea risks.
Any five marine insurance policy are as follows:
1. Voyage Policy:
This policy gives more importance to the voyage. A voyage policy is issued for a particular voyage from one port to another port or from one place to another. It covers all marine risks involved in a particular sea voyage irrespective of the time taken to accomplish the voyage. The insurance company pays the compensation if the insured property is damaged in the ship while traveling from one port to another. In this policy, the insurance company is free from responsibility when the ship arrives at its destination.
2. Time Policy:
This policy covers the marine risks for a specified period of time not exceeding 12 months. However, it may also be used for a period less than one year. Any loss that occurs during this period is indemnified to the insured. But there is no restriction to make this type of policy for less than one year. This policy is commonly more used for hull insurance than for the cargo insurance. For example, a period of time from 12 march 2015 to 11th December 2015. This policy is effective for this period.
3. Mixed Policy:
The mixed policy is a combination of both time and voyage policies. This policy covers the marine risk of a particular voyage up to a particular point of time. In this policy, the elements of voyage policy and of time policy are combined in under this policy. The insurance company is responsible for both traveling and also for a certain duration. It is more useful for insuring the cargo. For example, the mixed policy is the policy which states the ship should reach from 1st December 2015, from Paris to October 2015 in New york. Policy expires whichever is met first.
4. Open or Un-valued Policy:
A marine insurance policy in which the value of the property is fixed at the time of inspection is called un-valued policy. So, in the case of property, the insurance company pays the full of policy amount paid at the time of taking policy whether the property is fully damaged or not. The insurable value of the policy includes the price of the insured's property, investment price, incidental expenditure and all the expenditure as well. The un-valued policy is not used in practice so much. This policy is used only in freight insurance.
5. Valued Policy
In this type of policy, the value of the cargo and consignment is ascertained and mentioned in the policy document beforehand. Under this policy, the value of the policy is decided at the time of contract. Generally, the insured amount in this type of policy includes the price of cargo, ship, freight and approximate profit. Thus the value which is mentioned in the policy is the insured amount.