To align with agreements such as cost insurance and freight (CIF) or carriage and insurance paid (CIP), the exporter needs to take marine insurance to protect the buyer’s or their bank’s interest and honor the contractual obligation. The Scope of Marine insurance is necessary to meet the contractual obligations of exports. Therefore, exporters prefer to ship their products after getting it insured the same with an insurance company. The coverage so provided may not be sufficient to cover the cost of the goods shipped. However, the compensation agreed upon is mostly on a ‘per package’ or ‘per consignment’ basis. The carrier of the goods, be it the airline or the shipping company, may bear the cost of damages and losses to the goods while on board. The exporter, instead of bearing the sole responsibility of the goods, can buy an insurance policy and get maritime insurance coverage for the exported goods against any possible loss or damage. The legal liability of the intermediaries handling the goods is limited to begin with. Marine insurance best transfers the liability of the goods from the parties and intermediaries involved to the insurance company. In such cases, the amount has to be fairly distributed amongst the insurers. Principle of Contribution - Sometimes, the risk coverage for goods has more than one insurer. If they do, they won't get more than the actual loss. The parties can't buy insurance to gain profits. Principle of Indemnity - The insurance extended to the parties will only be applicable up to the loss. Also, a series is devoted called 'Incoterms' to respectfully assign the insurance of goods to each party. Principle of Insurable Interest - Any object presented as a marine risk and the assured covering the insurance of goods - both should have legal relevance. Nevertheless, it is the definitive and adequate cause of loss. Principle of Proximate Cause - The proximate cause is not adjacent in time also, it is inefficient. Principle of Good faith - Parties demand absolute trust on the part of both the insurer and the guaranteed. The insurer will consider all the certainty of goods in case of misfortune sustained during marine ventures. As per section three of the act, any time the term ‘marine insurance’ is used, expressed or even extended for the insuring of goods against loss or damage, the insurer will be at risk to bear the charges. The Marine Insurance Act, in India, came into existence in 1963. The country’s geographical position allows many banks and financial institutions to provide marine insurance. The process to purchase marine insurance in India is easy. Goods in transit need to be insured by one of the three parties:-Īlso, it can be taken by anyone involved in the transit of goods.Īlso Read: Role of a Freight Forwarder | Functions, Duties & more Where to get Marine Insurance? However, the subject matter of marine insurance goes beyond contractual obligations, and there are several valid arguments necessary for buying it before dispatching the export cargo. Admitting the terms, both parties are liable for the payment of goods under insurance. Marine insurance is required in many import-export trade proceedings. For instance, when goods are shipped by air, the insurance is known as the contract of marine cargo insurance. Despite what the name implies, marine insurance applies to all modes of transportation of goods. The term originated when parties began to ship goods via sea. Marine insurance covers the loss/damage of ships, cargo, terminals, and includes any other means of transport by which goods are transferred, acquired, or held between the points of origin and the final destination. It is an assurance that the goods dispatched from the country of origin to the land of destination are insured. Marine insurance refers to a contract of indemnity.
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