Indemnity and Subrogation as Marine Insurance Law

Running head: INDEMNITY AND SUBROGRATION AS MARINE INSURANCE LAW
INDEMNITY AND SUBROGRATION AS MARINE INSURANCE LAW
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INDEMNITY AND SUBROGRATION AS MARINE INSURANCE LAW
Introduction
Insurance has the primary function to transfer and distribute risks related to finance. With
the help of insurance, the insurer saves her or him from economic losses by transferring the risks
to the insurer. Marine insurance refers to the aim of indemnifying the insured as opposed to the
losses incurred in marine adventure. Several principles govern the marine insurance law, which
will be discussed in the paper elaborately.
The paper also aims to highlight two specific principles of the marine insurance law
namely indemnity and subrogation. The paper will first explain the two principles and then find
the relevance of these in the current insurance scenario. The focus of this paper is to demonstrate
that the principle of indemnity is best suited for the person who applies for marine insurance. In
doing so, the paper will first define insurance, and then move on to defining marine insurance
followed by brief explanation of the various principles. Then, the paper will explain the two
principles. In addition to that, the paper will provide cases, judgments and facts associated with
indemnity and subrogation. The cases will be used mostly to justify the thesis that indemnity is
better than subrogation.
Discussion
Insurance – It means a contract where an entity or individual receives reimbursement or
financial protection from any sort of financial loss from an insurance company. The contract is
presented in the form of a policy (Zelizer 2017). The insurance company collects the risks of the
client to make payments more reasonable for the insured.
Insurer – The insurer is the company that provides insurance to the individual. In
Cyprus, the insurer is called Cypriot insurance company.

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INDEMNITY AND SUBROGRATION AS MARINE INSURANCE LAW
Insured – The individual who receives insurance from an insurer is known as the
insured.
Marine insurance – This is the type of insurance that is received on occasions when
there is evident damage or loss to the cargo, ships, terminals or any transport that acquires or
transports property. The sub-branch of marine insurance is cargo insurance although it also
includes Hull, Marine Casualty, Liability, and Onshore and Offshore exposed property (Piccinno
2016). Marine insurance has much significance because it ensures transporters and ship owners
to claim damages particularly taking into account the type of transportation used. The first
marine insurance market was The Lloyd’s Coffee House in England.
Process of Marine insurance contract formation
Marine insurance contract formation could be defined in two parts, as Sooksripaisarnkit
(2017) explains. In the first part, the formation would be explained placing the risk in the Lloyd’s
Market and in the second part; the formation would be explained placing the risk outside. The
reason for this distinction is that the Lloyd’s Market has taken up a rather exclusive process for
risk placing.
Inside the Lloyd’s Market, the modern process of contract formation involves
underwriters called as ‘Names’ formulate their financial investment by entering one of the
syndicates. Corporate members known as ‘capital providers’ control the syndicates. While
forming contract, the insured must place the risk with the syndicate through the managing agent.
For example, if a ship owner wishes to insure his ship at the Lloyd’s Market, he must contact the
registered broker of Lloyd’s who would then provide him a document known as ‘slip’. However,
concerns regarding the legal status of the slip. This could be explained using the judgment given