Required Document of Marine Insurance

Marine insurance underwriting requires knowledge of how trade both domestic and international is conducted.

These trades are generally conducted through agents, brokers and intermediaries. They are commission agents, warehouse keepers, shipping agents, freight forwarding agents and Stevedores.

Commission agents sell goods on behalf of the principal for which they receive a commission. Brokers are agents who for a commission negotiate sale or purchase of goods on behalf of other parties. They do not require title to the goods and do net assume possession of goods.

Warehouse keepers receive the goods for the purpose of storage in their warehouses. Shipping agents have special
arrangements with the ship companies.

They formulate the various shipping documents arrange for the insurance of goods and pass the custom entry. Freight forwarding agents make special arrangements with the import authorities.

They collect numerous packages from different traders and make up large consignment for which they obtain special rates. Stevedores are contractors appointed by shipping companies for leading and discharging cargoes.

They plan, arrange equipment receive cargo from vessels bringing import cargo. Some specific documents such as open covers and Marine Policy should be properly understood for Marine
Insurance.

Open Cover

Open cover is an agreement, binding in honor whereby the insure will undertake to insure all shipments declared by the insured and the
assured to declare each and every shipment which comes within the scope of the open cover. Premium is payable on each declaration against which specific stamped certificate/policy in issued.

Advantages

The advantage of the open cover is automatic and continuous insurance. Once arranged the insured is granted protection on the agreed basis for all shipment subject to declaration of full shipping, details.

The client is relieved of the necessity to negotiate the insurance of every shipment individually. The premium rates are agreed at inception and this assist the insured to identity his cost of insurance right at the outset.

However, for legal purpose open cover is treated like a cover note. K is not a policy and therefore, is not stamped. The basis of valuation is the prime cost of the goods plus expenses to shipping, freight for which the assured is liable and cost of insurance plus ten per cent.

he assured is bound to declare each and every shipment as they go forward and obtain a certificate of insurance from the insurer as required either for individual shipment or for group of shipment.

Section 23 of the Act states “ A contract of marine insurance is deemed to be concluded when the proposal of the insured is accepted by the insurer whether the policy is issued or not reference may be made to the ship, covering note or other memorandum.

Marine Policy

Section 24 of the Marine Insurance Act 1963 States “A contact of marine insurance shall not be admitted in evidence unless it is
embodied in a Marine Policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded or afterwards.

Section 25 of the Act states that the policy must specific the name of the assured, or of some person who effect the insurance on his behalf; the subject-matter insured and the risk insured against the voyage or period of time or both as the case may be, covered by the insurance; the sum or sums insured the name or names of the insurer or insurers.

Policy Schedule

The standard form of the Marine Policy has a schedule showing following details:

  1. Policy number, place and date of issue
  2. Name of assured with address where the
    transaction is financed by a Bank, the name of the Bank.
  3. Description of the voyage/transit.
  4. The subject-matter insured and the
    classification packing.
  5. Risks covered, risk excluded, duration other
    term and conditions.

Surveyor’s Note

The Surveyor’s note contains the;

  1. Name and address of the surveyor who may be contacted at destination point to conduct a survey on damaged goods insured under the policy and issue a surveyor report.
  2. Name and Address of the claims Setting Office at destination which may be contacted so that the claim could be serviced processed on ultimately settled on behalf of the insurer concerned.