7 FEATURES OF MARINE INSURANCE CONTRACT POLICY

Post a Comment

An insurance agreement wherein the insurer promises to indemnify the insured against damages arising from maritime transportation is known as a marine insurance contract. 

A marine insurance contract has the following features:

1. Offer and Acceptance: Offer and acceptance are a requirement for marine insurance, just like they are for any other contract.

Making an offer is the first step in marine insurance. Upon acceptance of the offer, a marine insurance contract is established.

A marine insurance contract does not cover any damage or loss to the ship or its cargo before the offer was accepted.

2. Consideration: In a marine insurance contract, the premium that the insured will pay and the financial compensation that the insurer will offer constitute the consideration.

The consideration for the marine insurance contract will have to be agreed upon between the insurer and the insured at the time of taking the policy.

Also, the consideration must be continually kept by each party to the marine insurance contract, otherwise, the marine insurance contract may be rendered null and void.

3. Insurable interest: Just like with other insurance contracts, only those who have an insurable interest in the subject matter may apply for marine insurance

While it is not necessary for the insured to have an insurable interest as at the time entering the marine insurance contract, the insured must, however, have an insurable interest as at the time the loss occurred, otherwise, he may not be able to claim compensation.

4. Contract of indemnity: Marine insurance is a contract of indemnity, and the insurer is responsible for the full amount of the actual loss incurred, 

Marine insurance is a contract of indemnity because the insured must be restored to the approximate financial condition occupied before the loss occurred, no better, no worse.

5. Utmost good faith: Marine insurance contracts are based on the principle of utmost good faith, which calls for the insured to provide all relevant information regarding the policy's subject matter.

The owner of the goods to be transported or the ship being insured must disclose all the relevant information to the insurance company.

If the insured fails to disclose any relevant information about the subject matter or the insurer is guilty of hiding any material fact, then the marine insurance contract will become null and void.

6. Warranties: A warranty in a marine insurance policy is a guarantee that the information provided  by the policy is accurate and the insurance risk is as specified

The warranty ensures that the subject matter (voyage) is conducted properly and that the facts of the motor insurance voyage are true.

7. Period of marine insurance: The period of marine insurance can be either time-based or voyage-based.

When it is voyage-based, it means that it is designed for a specific route or voyage.

When it is time-based, it means that the marine insurance coverage will last for a specific period usually one year.

Help us grow our readership by sharing this post

Related Posts

Post a Comment

Subscribe Our Newsletter