Premium Essay

Marine Insurance

In: Business and Management

Submitted By najibyasha
Words 2887
Pages 12
INTRODUCTION

Hull and machinery insurance is used to protect the ship owner’s balance sheet against the total loss of his assets, or his cash flow and profits against the loss of funds necessary to pay for repairs. All policies incorporate a deductible whereby the assured bears the first tranche of any loss. The hardening insurance market of the 1990s saw deductibles increase very significantly and the trend was not reversed as the markets softened; evidently ship owners had become accustomed to retaining a portion of the partial loss risk. The majority of ship owners also retain the loss of earnings risk entirely. Loss of hire insurance remains relatively expensive and even when it is purchased it will usually incorporate a deductible period of 14 days or more. With modern repair techniques, serious hull damage can be repaired in relatively short periods; it is more often machinery damage, requiring the delivery or fabrication of spare parts that will trigger a claim in a loss of hire policy.

In the majority of cases, therefore, the losses arising from the vessel being out of service will fall on the assured. In addition, following a casualty, a variety of costs may be incurred over and above the repair yard account; these all flow from the insured loss but a line has to be drawn in every case to determine whether any such costs fall on the hull and machinery policy. Where a ship is damaged, but is not totally lost, the measure of indemnity, subject to any express provision in the policy is as follows:

• where the ship has been repaired, the assured is entitled to the reasonable cost of repairs, less the customary deductions, but not exceeding the sum insured in respect of any one casualty.

At the time of the MIA 1906 it was still usual to deduct one-third off the cost of new materials used on repairs to allow for...

Similar Documents

Free Essay

What Are the Subject Matter of Marine Insurance?

...What are the subject matter of marine insurance? The subject matter of marine insurance. The subject matter of marine insurance covers: I. Hull Insurance: The goods or cargoes shipped to a foreign country are exposed to the perils of the seas. The pirates and the men of war may loot away the goods. The marine insurance which safeguard cargoes from perils is known as cargo insurance. Subdivision of Hull Insurance The Hull Insurance is further Subdivision into - (a) General Cargo vessels (b) Dry Bulk Carriers (c) Liquid Bulk Carriers (d) Passenger Vessels (e) Other Vessels. II. Cargo Insurance: The word Hull refers to the body of the ship or vessel. The ship is exposed to a number of risks like cyclone, collision and arrest by foreign naval power. The insurance which protects the ship owner against the loss of ship is known as hull insurance. III. Freight Insurance: The ship owner losses the freight when cargo pays freight at the time of shipment of goods and goods do not reach the port of destination. The ship owner guards against possible loss of freight by freight insurance. IV. Liability Insurance: Liability Insurance is one in which the insurer undertakes to indemnify against the loss which the insured may suffer on account of liability to a third party caused by collision of the ship and other similar hazards. Types/Classes of Policies The major types of marine insurance policies are 1. Voyage policy Where the subject matter is insured for a......

Words: 594 - Pages: 3

Premium Essay

Marine Insurance Case Study

...Marine Agency Offers Important Insurance Coverage that can Help Save Your Business and Peace of Mind. Review their Offerings Today! No matter what kind of insurance you require, Marine Agency is the only place you need. They offer many types of insurance coverage to help save you from unexpected expenses. It's important to have the coverage you need. In general, you never know what the future can hold so you must be prepared. You don't want to spend your life worrying. Make sure you have the coverage you need and you can spend your time enjoying life instead! Marine Agency offers the following types of insurance and benefits: 1. Personal Insurance covers the following: - Automobile Insurance to make sure you protect yourself as you travel. - Homeowners...

Words: 839 - Pages: 4

Premium Essay

Principle and Practicesof Insurance

...Babatunde History of insurance The first examples of insurance related to marine activities. In many ancient societies, merchants and traders pledged their ships or cargo as security for loans. In Babylon creditors charged higher interest rates to merchants and traders in exchange for a promise to forgive the loan if the ship was robbed by pirates or was captured and held for ransom. In post medieval England, local groups of working people banded together to create "friendly societies," forerunners of the modern insurance companies. Members of the friendly societies made regular contributions to a common fund, which was used to pay for losses suffered by members. The contributions were determined without reference to a member's age, and without precise identification of what claims would be covered. Without a system to anticipate risks and potential liability, many of the first friendly societies were unable to pay claims, and many eventually disbanded. Insurance gradually came to be seen as a matter best handled by a company in the business of providing insurance. Insurance companies began to operate for profit in England during the seventeenth century. They devised tables to mathematically predict losses based on various data, including the characteristics of the insured and the probability of loss related to particular risks. These calculations made it possible for insurance companies to anticipate the likelihood of claims, and this made the business of insurance......

Words: 10824 - Pages: 44

Premium Essay

Business

... MARINE INSURANCE Submitted to Prof. Dr. Mujahidul Islam Evening MBA Program Department of Banking, University of Dhaka Prepared & Submitted by Mohammad Abu Zamih ID # 50917062 (17th Batch) Roksana Alam ID # 50917063 (17th Batch) Evening MBA Program Department of Banking, DU Course Title Insurance & Pension Fund Management Date of Submission Feb 21, 2012 Mujahidul Islam Professor Department of Banking, Faculty of Business Studies, University of Dhaka Subject: Submission of Term Paper Dear Sir: As instructed and part of our academic program under EMBA, We do hereby submit a Term Paper on “Marine Insurance” for your kind review and necessary reference. The Term Paper has been prepared on the basis of guidelines and instructions as given by you and the information, supporting documents as collected from the electronic media. We have engaged our intense efforts to bring out this study report with the target of achieving perfection. We shall be highly obliged if you kindly accept my report. Thanking you. Yours sincerely, ______________________ Mohammad Abu Zamih ID # 50917062 (17th Batch) Roksana Alam ID # 50917063 (17th Batch) MBA (Evening) Program Executive Summary The following paper is intended to be an analysis and a strategic review of “Marine......

Words: 9422 - Pages: 38

Free Essay

Asia Insurance

...3Limitation: 7 03.4 Analyzed Report: 7 03.5 Profit Analysis: 12 04. Findings: 17 05. Recommendations 18 06. Conclusion: 18 07. Reference: 19 01. Introduction: The paper investigates the financial data and analyze the position oh the selected company. The business of insurance is gradually expanding in this country. It is not a new idea or proposition for4 the people of Bangladesh. About a century back, during the British ruled in then India, some insurance company started to transact insurance business. With the emergence of the people’s republic of Bangladesh the government nationalized the insurance industry in 1972. Until 1984 insurance activities were absolutely the domain of the two nationalized insurance corporations. However because of public demand and of necessity insurance companies in the private sector were aloud under the authority of “the insurance Ordinance 1984.” 01.1 Objectives: We are the student of BBA program. Practical knowledge for this course is an important part. And to acquire practical knowledge in insurance industry we have influenced to do the report. There are some other objectives we got preparing the report. These are: 1. To know insurance company more closely. 2. To know how company make ratio analysis. 3. To understand how ratio can analyzed. 4. To know the exact position of the...

Words: 3629 - Pages: 15

Free Essay

Tricks

...Axia College Material Appendix C--'Dirty Tricks' Exercise--Week 9 Complete the table below using the information from the Course Syllabus: Week 8. |Dirty Trick #/Name |Description/Definition |Why Chosen |***Example from: 2012 Presidential Campaign OR Recent News Story | | | | |OR Other Situation | |# 1- Accuse your opponent |When in the mix of arguing or the person is |I’ve experienced this |One of my ex boyfriends tried to constantly accuse me of cheating| |of doing what he is |Feeling |in a previous |on him and we would have tons of arguments over that. Finally | |accusing you of (or worse) |Like they’re being attacked and losing the argu- |relationship |after a while it seemed like something was really bothering me | | |ment, the person will turn the tables and start | |about how he kept accusing and I knew I wasn’t do anything wrong | | |accusing of the same thing when you didn’t do | |what so......

Words: 1621 - Pages: 7

Premium Essay

Custom and Shipping

...This term also declares that where the responsibility of shipper ends and that of buyer starts. The exporter is bound to deliver the goods at his cost and expense. In this case, the freight and other expenses for outbound traffic are borne by the importer. * Carriage and freight (now known in the US as "cost and freight")(C&F, CFR, CNF): Insurance is payable by the importer, and the exporter pays all expenses incurred in transporting the cargo from its place of origin to the port/airport and ocean freight/air freight to the port/airport of destination. For example, C&F Los Angeles (the exporter pays the ocean shipping/air freight costs to Los Angeles). Most of the governments ask their exporters to trade on these terms to promote their exports worldwide such as India and China. Many of the shipping carriers (such as UPS, DHL, FedEx) offer guarantees on their delivery times. These are known as GSR guarantees or "guaranteed service refunds"; if the parcels are not delivered on time, the customer is entitled to a refund. * Carriage, insurance and freight (now known in the US as "cost, insurance and freight")(CIF): Insurance and freight are all paid by the exporter to the specified...

Words: 1739 - Pages: 7

Premium Essay

Insurance

...INTRODUCTION OF INSURANCE TO NIGERIA The concept of insurance in its modern form was introduced into Nigeria by the British in the closing years of the 19th century with the establishment of trading posts in what is now known as Nigeria towards the end of the 19th century by European trading companies, mostly British. These companies started effecting their insurance with established insurers in the London insurance market. As time went on, some British insurers appointed Nigerian agents to represent their interest in the country. These agents later metamorphosed into full branch offices of their parent companies in Britain. The first branch office in Nigeria was the Royal Exchange Assurance in 1921, later followed by other British companies. Indigenous Nigerian insurers and re-insurers later followed such as NICON established in 1969 and Nigeria Reinsurance Corporation established in 1977. There are well over 200 direct insurance companies and over five professional reinsurance companies operating in Nigeria today.Most of the country’s major or large marine risks are placed in the London market and at Lloyd’s. The influence of these foreign markets and their marine insurance practices are quite substantial in Nigeria such that the Institute of London Underwriters’ (ILU) clauses are extensively used in both hull and cargo insurance business in Nigeria. The Institute clauses are drafted by the ILU and are generally revised from time to time in response to the......

Words: 612 - Pages: 3

Free Essay

Broucher of Motor

...4 THE MALAYSIAN INSURANCE INSTITUTE (35445-H) No 5, Jalan Sri Semantan Satu, 50490 Damansara Heights, Kuala Lumpur Tel : 03-2087 8882 Fax : 03-2093 9282 Website : www.insurance.com.my MII Basic Course in EDUCATIONAL SERVICE PROVIDER OF THE YEAR 2012 PROFESSIONAL SERVICE PROVIDER OF THE YEAR 2007 Motor and Non-Motor Insurance Key Learning Outcomes At the end of the course, participants would be able to : • explain the various classes of insurance products, their scope of cover and the extensions available • identify the underwriting considerations, factors and rating • explain the claims processes and procedures of the several types of policies Trainer’s Profile Sivakumar A/L Sathiamurthy LL.B (Hons) Mr Sivakumar started his career with a legal firm handling insurance claims in 1992 and later joined two insurance companies holding the position of assistant manager and manager in claims before joining a leading local loss adjuster as General Manager – Motor Division. He was acknowledged by Bank Negara for his assistance in the settlement of claims for Mercantile Insurance Sdn Bhd (under liquidation). He holds a LL.B (Hons) qualification from the University of Wolverhampton, UK. Course Content • Introduction to the various classes of insurance, scope of cover and extensions to the standard coverages * Fire * Fire, Householder / Houseowner, Consequential Loss, Industrial All Risks * Miscellaneous Accident Burglary, Money, Plate Glass, All Risks...

Words: 841 - Pages: 4

Premium Essay

Insurance

...INSURANCE CONCEPT: Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. NATURE: The purpose of any insurance is to provide economic protection against the losses that may be incurred due to chance events such as: 1. Death 2. Disability 3. Medical expenses 4. Home or automobile damage, etc. FUNCTIONS: Basic functions of Insurance 1. 1.Primary Functions 2. 2.Secondary Functions 3. 3.Other Functions Primary functions of insurance • Providing protection – The elementary purpose of insurance is to allow security against future risk, accidents and uncertainty. Insurance cannot arrest the risk from taking place, but can for sure allow for the losses arising with the risk. Insurance is in reality a protective cover against economic loss, by apportioning the risk with others. • Collective risk bearing – Insurance is an instrument to share the financial loss. It is a medium through which few losses are divided among larger number of people. All the insured add the premiums towards a fund and out of which the persons facing a specific risk is paid. • Evaluating risk – Insurance fixes the likely volume of risk by assessing diverse factors that give rise to risk. Risk is the basis for ascertaining the premium rate as well. • Provide Certainty – Insurance......

Words: 1235 - Pages: 5

Premium Essay

Lufthansa

...Elborne Mitchell www.elbornes.com Aspects of Marine Insurance Fraud Peter Tribe and Jonathan Steer Elborne Mitchell www.elbornes.com Overview • Fraud at Inception • Fraudulent Claims • Fraudulent Devices • Why plead fraud? Elborne Mitchell www.elbornes.com Fraud at inception Principle of utmost good faith. “Good faith forbids either party, by concealing what he privately knows, to draw the other party into a bargain from his ignorance of that fact and his believing the contrary”. Lord Mansfield 1766 Carter v Boehm Elborne Mitchell www.elbornes.com Fraud at inception Section 17 of the Marine Insurance Act 1906 “A contract for marine insurance is a contract based upon the utmost good faith, and if the utmost good faith be not observed by either party, the contract may be avoided by the other party”. Elborne Mitchell www.elbornes.com Fraud at inception A false representation has been made by the assured. Knowingly or without believing in its truth, or - recklessly without caring whether the statement is true or false. Derry v Peek 1889 So – positive deliberate dishonesty or a ‘conscious’ indifference - Elborne Mitchell www.elbornes.com Fraud at inception The Game Boy, 2004 Vessel insured for US$1.8million Vessel moved to a dockyard for “maintenance repairs” Vessel lost in explosion at dockyard Insurers discovered fraudulent overvaluation and fabrication of documents Vessel only worth about 10% of valuation - Elborne......

Words: 1098 - Pages: 5

Premium Essay

Non-Life Insurance Products

...designed to indemnify the insured for loss of or damage to the property insured as a result of the occurrence of fire, lightning and explosion. It can also be extended to cover natural perils such as floods, earthquake, impact etc. [4] Burglary Policy This policy provides cover for loss of or damage to property by theft following actual forceful and violent entry into or exit from the premises. It also covers damage to the premises as a result of the forceful entry or exit or attempt there at by burglars. [5] Home and Personal Assets Protection Insurance (Staff of Zenith Bank) This will cover the private dwelling place of the staff as well as the contents of the house against Fire and allied perils, theft and Accidental Damage in additions to associated perils relating to the occupants of the Premises. Requirements  Value of the Building  Value of the contents  Location of Property Public Liability Insurance (PLI) This is...

Words: 1457 - Pages: 6

Premium Essay

Insurance

...The Insurance Market in Bangladesh now consists of two state-owned corporations, forty three and seventeen private sector general & life insurance companies respectively, a total of 62 insurance companies. Thus the insurance sector in Bangladesh has grown up substantially and deepened remarkably with number of companies in both life and general segments. With the expansion of size of the insurance market, the volume of assets of the industry has also increased substantially. PROFILE OF SADHARAN BIMA CORPORATION Sadharan Bima Corporation is only state-owned General Insurance Corporation operating under the direct control and supervision of the Ministry of Finance, Government of the People’s Republic of Bangladesh. Following characteristics of SBC proves its financial soundness :- Government owned enterprise - Financial Soundness due to huge assets owned by SBC - Only re-insurer in Bangladesh - Wide net-work of offices - Public trust - Huge trained & skilled manpower - Large investable fund - Huge Real Estate Assets in Dhaka, Chittagong, Khulna, Rajshahi, Bogra & Sylhet. SBC TOWER – the only multistoried car parking building in the heart of the capital city of Bangladesh SBC is the sponsor shareholder of Investment Corporation of Bangladesh, Industrial Development and Leasing Company, National Tea Company Limited, National Housing Finance and Investment Ltd, Aramit Ltd, Central Depository BD Ltd.etc. The main pillar of the SBC is insurance as well as......

Words: 1135 - Pages: 5

Premium Essay

Insurance & Risk Management

...Acknowledgement * History of EFU Insurance * Vision * Mission * Policies Offered By EFU Insurance * Detail About Policies * Coverage Under Policies * Risk Management * Claims * Payment of claims and Process * Duration of Policies * Marketing Plan ACKNOWLEDGEMENT All the Acclimations and Appreciation are for Almighty ALLAH, the Compassionate; the Benevolent. That knows the mysteries & secrets of universe. We would like to show the special gratitude to MISS Khudaija who provided with us knowledge Vision about the management. At the end, we would like to thank all who directly or indirectly help us in making the project. Introduction:- In 1932, Mr. Ghulam Mohammad, a far sighted man, established Eastern Federal Union Insurance Company (EFU) with financial assistance from the Aga Khan III and the Nawab of Bhopal. Mr. Abdur Rehman Siddiqui became the founder chairman. The company was originally registered at Kolkata and operated in India (undivided) and Burma. In 1947, on the birth of Pakistan, EFU found a new home in a new country. In Pakistan, EFU rapidly established itself as a progressive and innovative insurer. It gave the emerging insurance industry the leadership, the manpower and the drive needed to grow in a situation where at one time, three-fourths of insurance was held by foreign companies. By 1961, EFU had become the flag bearer of Pakistan's insurance industry on the......

Words: 4817 - Pages: 20

Free Essay

History of Insurance in India

...------------------------------------------------- CHAPTER 2 FORMATION AND GROWTH OF INSURANCE INDUSTRY IN INDIA * INTRODUCTION * NATURE AND CHARACTER OF INSURANCE * NEED FOR INSURANCE * FUNCTIONS OF INSURANCE * HISTORICAL BACKGROUND OF INSURANCE * TYPES OF INSURANCE * HISTORY OF INSURANCE IN INDIA * Formation of Insurance Industry in India * Nationalization of Insurance Business in India * Privatization of Insurance Industry * LEGISLATIONS REGULATING THE INSURANCE SECTOR IN INDIA ------------------------------------------------- CHAPTER 2 FORMATION AND GROWTH OF INSURANCE INDUSTRY IN INDIA INTRODUCTION Insurance is a practice by which a company provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment. Insurance is a social device, to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. The risks, which can be insured against include fire, the peril of sea, death, incident, & burglary. The aim of insurance is to protect the owner from a variety of risks which he anticipates. Insurance is actually a contract between two parties. A contract of insurance is a contract where one person undertakes to pay another person, a sum of money or its equivalent on the happening of a specified event. And there is an agreed consideration for such undertaking. The person who seeks this......

Words: 5317 - Pages: 22