May 16, 2023
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A simple definition of insurance would be “Protection against future loss.” Marine insurance is another variant of the general term ‘insurance’ and, as the name suggests, is provided to ships, shipyards, marinas, offshore installations and floating equipment.
Independent owners can avail insurance facilities for their watercraft (PWC), megayachts, yachts, and pleasure craft. Some boat insurance coverages include wreck removal and salvage without additional hull coverage costs.
Most importantly, cargo insurance provides coverage to cargo loaded onto ships or vessels during the transportation process.
Different types of coverage options offer protection to various kinds and sizes of ships, depending on routes taken. Insurance policies are well-laid-out contracts that need to be abided by both parties. A policy ensures the vessel is against common risks of property damage, theft, collision, explosion, capsizing, etc.
Marine Liability Insurance/P&I, or protection and indemnity, protects third party liabilities that shipowners and companies are exposed to during their operations. It is indemnity and not liability coverage. It includes coverage for injuries, illnesses, and loss of life caused by operating the vessel. Medical expenditures, damage to other vessels, collision and related expenses are also covered.
Many types of insurance and marine insurance companies with years of experience and expertise offer different coverage plans. Some inland marine insurance providers provide coverage to goods in transit, even when they have reached land and are taken to storage and logistics facilities.
Marine insurance coverage is essential because, through marine insurance, ship owners and transporters can be sure of claiming damages, especially considering the mode of transportation used.
Of the four modes of transport – road, rail, air and water – it is the latter most which cause a lot of worry to the transporters not only because there are natural occurrences which have the potential to harm the cargo and the vessel but also other incidents and attributes which could cause a huge loss in the financial casket of the transporter and the shipping corporation.
Incidents like piracy and possibilities like cross-border shoot-outs also pose a major threat to water shipments. Therefore to avoid any loss because of such events and happenings, in the interest of the corporation and the transporter, it is always beneficial to have a backup like marine insurance.
Another important aspect of having marine insurance is that a transporter can choose the insurance plan as per the size of his ship, the routes that his boat takes to transport the cargo and many such minor points which could go a great length in affecting the transporter majorly.
Also, since there are various plans and policies which indicate covering not just the cargo but also the vessel, the transporter can choose and avail of the best policy that suits his business.
However, as much as marine insurance provides a fair claim to transporters and corporations, it has to be understood that the trickiest and strictest insurance areas when the insurance commenced – i.e. from the 17th century onwards.
While dealing with the scope and range of marine insurance, a ship’s captain must follow a rigid protocol regarding the route taken and the time taken for the cargo and the vessel to reach the intended destination port.
Because if there is any discrepancy or violation in terms of the route taken, i.e. if the captain varies or digresses in his route from the one originally intended as a part of the ship’s course, then even if there is any mishap occurring to the vessel or the cargo, the insurance claim will be rejected entirely without any possibility of the claim being reimbursed to the claimant at some future date after a few tough negotiations.
Therefore it becomes essential that a ship’s captain takes due consideration about the prescribed routes to avoid a failed insurance contract because of an accidental loss due to the deviation in the route. This would bring about caution on the captain’s part and reduce the possibility of losing essential insurance claims because of inadvertence and negligence.
Marine insurance is a haven for shipping corporations and transporters because it helps to reduce the aspect of financial loss due to the loss of critical cargo. Also, it helps to bring about to the transporting companies and the receiving parties the duty, dedication and straightforwardness of the insurance companies.
It is a kind of marine insurance policy which covers the losses or damages caused to marine cargo during transit times. Such protection is provided to the cargo owner and the shipment in case of delays, accidents etc.
There are different kinds of marine insurance, namely, Freight insurance, Liability insurance, Hull insurance and Marine Cargo insurance.
Marine insurance is essential to keep the costly items safe and intact and claim coverage in case of any damages or losses resulting from accidents or collisions.
Most states do not require boaters to have insurance for their watercraft; however, they may come in handy at some marinas or docks if one wishes to use a slip or mooring. Two States- Arkansas and Utah, have boat insurance laws.
The main principles taken from the 1963 Marine Insurance Act include Indemnity, Insurable Interest, Utmost Good Faith, Proximate Cause, Subrogation and Contribution.
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