TYPES OF MARINE INSURANCE POLICIES

TYPES OF MARINE INSURANCE POLICIES

How many types of marine Insurance Policies are there? Different clauses of marine insurance policies, Scope of cargo insurance policy and how does marine Insurance policies work?

The shipper or insured covers the risks depending on the terms of letter of credit/ export order. The Institute of London Underwriters has drawn up the different clauses in marine insurance policy in respect of risk coverage. The risk coverage is done in terms of various institute cargo clauses. Different marine insurance policies with different risk coverage are :

Institute Cargo Clause A: This policy covers all the risks of loss or damage to goods. This is the widest cover.

Institute Cargo Clause B: This policy covers risks less than under clause ‘A’.

Institute Cargo Clause C: This policy covers lowest risks.

War and Strikes, Riots and Civil Commotion (SRCC) clause is excluded in all the above policies. These risks can be covered by specifically asking for, paying

SCOPE OF CARGO INSURANCE POLICY

The scope of the insurance policy depends on the risks it covers. Here, risks are termed as perils. Perils are referred as causes of events. The various kinds of perils are:

Maritime Perils:

These are the events which are created by God or man made. Events created by God are earthquake, collision, storm, lightning, and entry of sea water into the vessel, volcanic eruption, rain water damage and washing overboard of cargo.

The man made events are fire, smoke, water used to extinguish fire, piracy, barratry (fraud, gross criminal negligence of the crew to prejudice ship owner)., sabotage, vandalism etc.

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Extraneous Perils:

These are incidental perils. These perils are caused due to faults in loading, carrying and unloading. Examples are rough handling, leakage, breakage, pilferage and non-delivery etc.

3. War Perils: These perils relate to losses due to war including civil war, revolution, rebellion and detainment of the carrier etc. if the goods are confiscated by the customs on charges of smuggling, then insurance does not cover.

Strike Perils:

This means damage or loss due to lockouts, strikes, labor disturbances, riots, and civil commotion and by any terrorist acting from political motive.

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