MAIN CLAUSES OF A MARINE INSURANCE POLICY

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A marine insurance contract is one where the insurer agrees to indemnify the insured against looses related to sea transportation .

A marine policy may contain seven important clauses at the very least. These are the valuation clause, 'at and from' clause, sue and labour clause, warehouse to warehouse clause, touch and stay clause, inchmaree clause, and memorandum clause.

1. Valuation clause: This is a clause in a marine insurance policy that allows the parties to the insurance policy to agree on the value of the subject matter.

The valuation clause, as the name might seem to suggest, specified the agreed basis for determining the subject matter's value

In marine insurance, the valuation clause is crucial since it specifies the sum that the insured will receive in the event that the covered risk materializes.

As a result, in the case of a loss or damage, the policyholder will only get the amount of  compensation mentioned in the policy.

However, if the policy is an unvalued marine policy or the value of the damaged is to be determined at the time of loss, then this clause is left blank.

2. 'At and from' clause: This is another important clause in a marine insurance contract.

The at and from clause, as its name would imply, determines the moment the risk coverage will begin.

The at and form have two parts: The 'at' and the 'from' part. The 'at' specifies that the risk coverage start when the ship is docked at the specified port.

The 'from' specifies the risk coverage start when the ship departs from the specified port.

For example, When the words "at and from Lagos" appear in an insurance policy, it signifies that the risk is covered both while the ship is at Lagos port and when it departs from Lagos port.

If a marine insurance policy consists of the word ‘from’ only instead of 'at and from', then it means that the risk is covered only from the time of departure of the ship from the port.

3. Sue and Labour clause: This is a clause in a marine insurance policy that requires the ship owner to take all reasonable steps to prevent or minimize the loss or to stop further damage from occuring to the subject matter after the loss has already occurred.

A marine policy that includes a sue and labor clause allows the insured to recoup any expenses made in preventing further loss or mitigating loss.

That is, the sue and labour clause allows the insured to recover the amount of money spent to save the goods from imminent loss

4. Warehouse to Warehouse Clause: The "Warehouse to Warehouse Clause" in an insurance policy protects goods while they are being transported between two warehouses.

A marine insurance policy would typically include a warehouse-to-warehouse provision to cover risks for goods from the point of dispatch from the origin or consignor's warehouse to the point of arrival at the destination or consignee's warehouse.

The advantage of warehouse-to-warehouse clause's benefit is that it makes sure the subject matter is protected not only from potential risks associated with the port but also from potential risks associated with moving the good from one warehouse to another.

5. Touch and stay clause: Under this marine insurance provision, a ship may only touch and stay in ports that are listed in the marine insurance policy.

Any departure from the route specified in the policy or route taken for ordinary trade will be considered as deviation unless the such departure is required in an emergency to save the ship or the persons on board

Therefore, the touch and stay clause is put in place to prevent the ship from being called in ports that are not specified in the marine insurance policy, unless for legitimate reasons.

6. Inchmaree clause: This is a special provision in a marine insurance policy that protects against a ship being lost or damaged as a result of a crew member's or ship master's negligence.

The inchmaree clause gets its name from a famous incident of 1857, where a ship name inchmaree was damaged by the negligence of the crew and the insured could not get compensated for the damages because it was not included in the 'peril of the seas'.

7. Memorandum clause: This clause exempts the insurance company from covering minor losses to perishable goods.

In other words, the memorandum clause ensures that the insurer is not liable for partial losses of a perishable good.

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