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    Marine Insurance - Losses

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    Shivam Kumar
    Marine insurance developed from bottomry and respondentia bonds used by Lloyd's of London. It covers various types of vessels and perils at sea as well as additional risks like pollution, strikes, and third party negligence. Policies imply warranties of seaworthiness and legality under the Marine Insurance Act of 1906. Coverage includes partial losses from sea perils, fire, theft, and more. Total losses are either constructive, where recovery costs exceed value, or through abandonment allowing the insurer to take possession of salvaged assets and liabilities. Sue and labour clauses reimburse expenses to save vessels and cargo beyond the insured sum. Collision liability covers three-quarters of costs, with the remainder paid by Protection and Indemn

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    Marine Insurance - Losses

    Uploaded by

    Shivam Kumar
    120 views20 pages
    Marine insurance developed from bottomry and respondentia bonds used by Lloyd's of London. It covers various types of vessels and perils at sea as well as additional risks like pollution, strikes, and third party negligence. Policies imply warranties of seaworthiness and legality under the Marine Insurance Act of 1906. Coverage includes partial losses from sea perils, fire, theft, and more. Total losses are either constructive, where recovery costs exceed value, or through abandonment allowing the insurer to take possession of salvaged assets and liabilities. Sue and labour clauses reimburse expenses to save vessels and cargo beyond the insured sum. Collision liability covers three-quarters of costs, with the remainder paid by Protection and Indemn

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    Marine insurance developed from bottomry and respondentia bonds used by Lloyd's of London. It covers various types of vessels and perils at sea as well as additional risks like pollution, strikes, and third party negligence. Policies imply warranties of seaworthiness and legality under the Marine Insurance Act of 1906. Coverage includes partial losses from sea perils, fire, theft, and more. Total losses are either constructive, where recovery costs exceed value, or through abandonment allowing the insurer to take possession of salvaged assets and liabilities. Sue and labour clauses reimburse expenses to save vessels and cargo beyond the insured sum. Collision liability covers three-quarters of costs, with the remainder paid by Protection and Indemn

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    120 views20 pages

    Marine Insurance - Losses

    Uploaded by

    Shivam Kumar
    Marine insurance developed from bottomry and respondentia bonds used by Lloyd's of London. It covers various types of vessels and perils at sea as well as additional risks like pollution, strikes, and third party negligence. Policies imply warranties of seaworthiness and legality under the Marine Insurance Act of 1906. Coverage includes partial losses from sea perils, fire, theft, and more. Total losses are either constructive, where recovery costs exceed value, or through abandonment allowing the insurer to take possession of salvaged assets and liabilities. Sue and labour clauses reimburse expenses to save vessels and cargo beyond the insured sum. Collision liability covers three-quarters of costs, with the remainder paid by Protection and Indemn

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 20

    MARINE INSURANCE

    Lecture 15 Week 8

    DEVELOPMENT
    One of the earliest forms of insurance Developed out of bottomry and respondentia bonds Standard forms used by Lloyds Marine Insurance Act 1906 Often includes aviation insurance Different terminology

    TYPES OF COVER
    Hull Cargo Freight Voyage Collision

    TYPES OF VESSELS COVERED


    Dinghies Yachts Cargo vessels Liners Super tankers Oil rigs Fishing vessels

    BASIC COVER
    Perils of the sea and other navigable waters Restraint of princes Piracy All risks

    FURTHER COVER
    Pollution Hazard War and strikes clause Bursting boilers or breaking shafts accident or negligence of a third party

    IMPLIED WARRANTIES

    Seaworthiness
    Damaged bottom Insufficient crew

    Legality Marine Insurance Act 1906

    PARTICULAR AVERAGE
    This means a partial loss Covers loss caused by:

    Perils of the sea rivers lakes or other navigable waters fire, explosion violent theft jettison piracy

    MEASURE OF INDEMNITY
    s.69 Marine Insurance Act 1906 Where ship has been repaired the reasonable cost of repairs less the customary deductions but not exceeding sum insured Where partially repaired cost of repairs plus reasonable depreciation subject to not exceeding cost of complete repair Not repaired - the reasonable depreciation

    EXAMPLES OF ADJUSTMENTS
    Bottom end bearing fractured in generator as a result of latent defect led to damage to liner. Cost

    Bearing Liner Cylinder Piston Total

    5000 4000 3000 6000 18000

    ADJUSTMENT
    Excess 2000 Standard policy would exclude replacing defective part Thus total amount payable is 11000

    18000 - 5000 (bearing) - 2000 (Excess)

    Additional perils clause would have covered bearing

    TOTAL LOSS CLAIMS (SHIP)


    Institute time clauses Hulls total loss only including salvage, salvage charges and sue and labour Hull total loss, general average and 3/4ths collision including salvage etc Hulls disbursements

    TYPES OF TOTAL LOSS

    Constructive total loss


    Deprived of ship by insured peril Recovery would exceed value or repair exceeds value

    Abandonment
    Insured entitled to abandon loss when constructive total loss Consequence is that if insured accepts notice of abandonment subject to assets and liabilities. May not accept abandonment

    SUE AND LABOUR CLAUSES


    Covers expenses reasonably incurred by insured to save vessel and cargo Paid in excess of sum insured.

    COLLISION LIABILITY

    Covers three quarters of the cost of liability


    Rest paid by Protection and Indemnity associations

    It is a liability policy

    CARGO
    Same risks and same methods General average clause

    Losses arising for the preservation of ship and cargo

    Salvage loss
    Follows forced sale of badly damaged cargo

    CARGO PARTIAL LOSS

    Where goods delivered damage measure of indemnity is


    Proportion of sum fixed by policy equal to the gross sound value less damaged value at place of delivery

    Example
    Goods insured at 120,000; Damaged value = 80,000: Sound value = 100,000 Depreciation or proportion is 20% Apply this to 120,000 gives 24,000

    FREIGHT
    Profit made by a shipowners out of ships used to carry cargo, both their own and others The cargo includes all moveables Loss occurs when cargo is not deliverable

    FREIGHT LOSS
    Valued and unvalued policies Indemnity is the proportion of freight lost to freight at risk applied to insured This could be subject to Measure of indemnity clause which limits freight to amount actually lost.

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