Concept And Meaning Of Marine Insurance

Human beings have always been fascinated by sea travel and therefore, exposed to dangers of storms, pirates and accidents at the sea. The origin of modern marine insurance is, however, associated with the evolution of trade through the sea.

Originally, marine insurance was designed to protect the shipping companies and owners of cargo against perils of the sea. In modern times, it covers the risks of loss caused by perils on the land also.

Marine insurance is a legal contract between the insurer and the insured that provides protection against marine losses. The insurer also called the underwriter, is an insurance company which indemnifies the insured against loss caused by perils of the sea.

The insured is generally a shipping company and merchants who hire ships for carrying their goods from one port to another. Marine insurance is a contract that covers the ship, the cargo, the freight and other liabilities, and protects them against the risk of loss caused by perils of sea. The marine insurance contract is valid for a specified voyage or for a specified time, or for a specified voyage and time.

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Significance Of Marine Insurance

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Steps Of Effecting Marine Insurance

The subject matter of marine insurance may be either cargo, hull or freight. The insurance taken on goods is called cargo insurance. When the ship is insured, the insurance becomes hull insurance. The shipping company lose the freight if the goods are not delivered at the destination port. To protect such risk, the shipping company can take an insurance policy on its freight. Such an insurance is called freight insurance.

Therefore, marine insurance is branch of insurance and is basically a contract of indemnity. It provides protection against the risk of loss that may be caused by perils of sea. Generally, it covers the ship, the cargo or, the freight money and protects them against the marine loss for a certain period of time, voyage or route.