The general principles of marine insurance are not different from other types of insurance. The assured agrees to pay a premium and the insurer agrees that if certain loss or damage occurs to certain interests of the assured, the insurer will indemnify him. The similarities very much end here. The complex circumstances involved in sea voyages require specific and very special arrangements for the provision of marine insurance. The fixing of rates and selection of special terms & conditions, for example, require a vast knowledge of the nature of vessels, types of cargoes, liabilities to be covered, required over all limit of liability and conditions of navigation. Although there is a difference in practice and procedure, which are required in this way to meet the commercial and shipping demands, the fundamental principles of marine insurance remain constant. These are enshrined in legal decisions established for over three hundred years and are embodied in the MIA 1906. Except where subsequent, or local, legislation changes any of these are upheld in courts throughout the world.
Fundamental principles are as follows:
utmost good faith
The basis of insurance is the law of contract. The relationship between assured and insurer is primarily a contractual relationship with mutual and reciprocal obligations, rights and powers of the parties defined in terms of contract. A contract of marine insurance is a special contract; it manifests many special characteristics which are capable of distinguishing it from other insurance contracts. As such, it may be considered a special insurance contract. A conspicuous and obvious feature of a contract of marine insurance is that it is embraced by the MIA 1906. This codifying Act devotes much attention to the issue of defining; formal requirements and fundamental legal characteristics of a contract of marine insurance; its implied content and legal geography of the express and implied terms of the contract; and the proper construction of the contract.
Purpose of this course material is to discuss some practical aspects of marine insurance for the understanding of the students taking this course. This will give the students insight as to how actually the market operats in relation to various marine insurance products. Our purpose is to give a brief insight to the students about the various steps of securing a marine insurance covers for vessels, cargoes and projects. The course will also give insight into the concept of duty of utmost good faith.
Both, analytical and descriptive, methods will be used in writing this course material. In literature, the legal guidelines and sections of MIA 1906 (corresponding provisions in marine insurance acts of other common law jurisdictions) will be used while analysing the topic. Few books, internet sources and case laws will be used to write on the topic and relevant issues related to the topic.
In the second chapter brief history of marine insurance will be discussed. Attention will be given to the MIA 1906, which is recognised as a codification of legal decisions established for over three hundred years, as also mentioned hereinabove.
Marine insurance contract and its structure will be discussed in the light of practice in marine insurance market. Marine insure policy, subject-matter of marine insurance policy, types of policy, assignment of policy, form of policy and institute clauses will also be discussed in the course material. The concept of the utmost duty of good faith will also be discussed in relation to pre-contractual duty of the parties.