Question

Explain the importance of marine insurance.

Answer 1

1. A marine insurance policy provides protection against risks involved in marine.
2. The cost of a ship is very high, so owners of ships always take out hull insurance policies.
3. Marine insurance is one of the oldest types of insurance. It plays a vital role in foreign trade by providing protection against the perils of the sea.
4. Sea perils include piracy, capture by the enemy, seizure, restraint, jettison, barratry, etc.
5. Jettison means throwing away goods overboard in order to avoid sinking the ship, while barratry refers to a fraudulent breach of duty by the master or staff the ship.
6. Sinking of a ship after being hit by a rock, loss of cargo due to sea water or heat, storms at sea, collision of one ship with another, looting of a ship, etc., are other examples of sea perils.
7. Marine insurance provides protection against these risks for both importers and shipping companies.
8. In marine insurance, insurable interest must exist both at the time of insurance and at the time of marine loss.