Marine Insurance

1. MARINE CARGO

This insurance provides comprehensive cover for loss of or damage to goods while being transported from one location to another whether import, export, inter-island or inland cargo movements. Premium rates vary depending on the mode of transits (sea, air, land), packaging and nature of the cargo. Coverage may range from the comprehensive all risks cover to the limited total loss only cover.

• Sea freight Cargo: Covers the movement or transportation of cargo or any movable properties through navigable bodies of water by means of vessel.
• Airfreight Cargo: Covers movement or transportation of cargo or any movable properties by means of an aircraft.
• Inland Marine Cover: Covers movement or transportation of cargo or any movable properties through dry land by means of LTO-registered vehicles against the following perils:

o Fire including self-ignition and external explosion of the conveyance.
o Accidental collision of the vehicle with any other automobile, vehicle or object excluding, however, contact with any portion of the road bed curbing, any stationary object while backing for loading or unloading or rails or ties of street and excluding collision of the carrying vehicle.
o Overturning or upset of the motor trucks
o Collapse or subsidence of bridges
o Explosion
o Flood or rising of navigable waters, lightning, cyclone or tornado.
It can also be extended to include Robbery and/or Hi-Jacking

2. MARINE HULL

Marine Hull Insurance covers loss or damage to hull and machinery. The hull is the structure of the vessel. Machinery is the equipment that generates the power to move the vessel and control the lighting and temperature system such as boiler, engine, cooler and electricity generator.

Scope of Cover:
Institute Time Clauses

These are the main clauses and most important in Marine Hull policies. Time Clauses covers for a specific period usually 12 months. As the nature and degree of risks which the Insurer run vary according to the kind of vessel, there exist a number of categories in the Time Clauses. They are: –

• Institute Time Clauses (Hull)
• Institute Time Clauses (FPA)
• Institute Time Clauses (Total Loss Only)

1. Institute Time Clauses (Hull)
Provides the maximum coverage offered by hull insurance.

Perils Covered
o Perils of the sea
o Fire & explosion
o Violent theft
o Piracy
o Breakdown of accident to nuclear installations etc.
o Contact with aircraft
o Earthquake, volcanic eruptions or lightning
o Accidents in loading etc.
o Bursting of boilers
o Breakage of shaft
o Latent defect
o Negligence of masters etc.
o Negligence of repairers etc.
o Negligence of charterers etc.
o Barratry

Excluded Perils
• Willful misconduct of the Assured
• Loss caused by delays
• Wear and tear
• Rats and/or vermin
• Injury to machine not proximately caused by maritime peril

Paramount Exclusions in The Policy
• War
• Strikes
• Malicious acts
• Nuclear exclusion

Other Losses & Expenses Covered
• Pollution Hazard
• 3/4th Collision Liability
• General Average and Salvage
• Sue and Labour
• Constructive Total Loss

2. Institute Time Clauses (FPA)

The coverage of these clauses is similar to that of Hulls Clauses but exclude coverage on machinery damages in all respects.

3. Institute Time Clauses Hulls (Total Loss Only)

As the name suggested, this clause only covers in the event of it becoming a total loss by arrangement, actual, compromised or constructive total loss. The rate for this cover is low and usually this cover is only extended to old vessel (but not more than 20 years) or on accommodation only.

Institute Yacht Clauses
This clause are basically Institute Hull clauses amended for yachts and include all damages to hull, masts, spars, sails and other equipment on board the yacht but does not include damage whilst the yacht is racing.

Institute Voyage Clauses
This insurance covers risks during a voyage from one port or place to another or a round voyage. Voyage insurance is effected only in such cases as delivery voyage of a new vessel to buyer from the shipyard or a voyage of a vessel to be repaired at shipyard.

The period of coverage is usually less than a year and the scope of coverage is almost identical that of time policy. In which case, there are also the FPA and Total Loss cover.

Builders’ Risk Insurance

This type of insurance covers whilst vessel is under construction. During that period, it is exposed to risks such as fire, tidal wave, capsize or failure in launch. It is also exposed to collision, and sinking on a trial trip. The builder’s risk insurance effected by shipyards provides cover against all such risks.
The insured value is the contract price or the estimated completed value of the vessel if there is no contract price. The period of insurance should be from the time of inception of the construction to the time of delivery. Hence, the period can well exceed 12 months.

Hull War and Strike Risks Insurance

War and strike risks are usually excluded from the cover of ordinary marine insurance policies in any market throughout the world. This insurance covers exclusions under Article 11 of the Institute Time Clauses. It can only be effected on vessels which are insured against ordinary marine risks.

Terrorism Insurance
Terrorism cover is an excluded risk world-wide. There will be no consideration for acceptance if this coverage is required.