Marine Insurance Report: Marine Insurance Law and Regulations

This report delves into the complexities of marine insurance, providing a comprehensive overview of its key aspects. It begins with an introduction to marine insurance law and its significance in the United Kingdom, emphasizing the importance of insurance in protecting goods and vessels during international shipping. The main body of the report features a detailed analysis of various clauses, including the indemnity clause, liability and offshore energy clauses, and marine and energy insurance clauses. It also explores different types of marine insurance, such as cargo insurance, hull insurance, freight insurance, and liability insurance, along with the principles that govern these insurance policies, including bona fides, insurable significance, and subrogation. A case study involving a damaged vessel, 'Hasacrack,' is presented to illustrate the practical application of these clauses and principles, detailing how losses are incurred and claims are made. The report also examines the doctrine of proximate cause and the concept of abandonment, as well as how indemnity is measured in marine loss scenarios, including hull insurance and the doctrine of concurrent cause. Overall, the report offers a thorough examination of marine insurance law and its practical applications.

Marine Insurance

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION ...............................................................................................................................7
.........................................................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
United Kingdom is diverse and multi faced in their laws and regulations for any
department or areas of legislation for country. Its legislation is so strong that it has provides
action clause and effect cause solution to every problem arising in nation. Marine insurance law
is also one the most important laws for correct working and assessment of workings in this
industry. This insurance provides basic recovery of goods, products or ship parts which could be
damaged when shipping them overseas (Baho, Peter and Tranvik, 2012).
Insurance nowadays is a very important feature in today's society to protect and save the
property by any cause and harm. The adequate amount of insurance one is trying to claim shall
be equivalent to the amount one seeks to except loss of, generally insurance is equal to the level
of such regulations and provide guideline for proper accumulation of price of property output.
This has given benefit to several business organisation in case of losses during conditions
where ships are sailing in natural calamites, these can come with several causing problem and
accidents which can cause major loss for business organisations. This report consists of a case
scenario which will define certain clauses of marine insurance such as indemnity, marine
insurance, liability and offshore energy clauses and several other clauses which can render
benefits to insurer and get him out of loss in situations of insurance claims.
MAIN BODY
Issue in context of marine insurance:
A boat named “Hasacrack” encountered severe damage in a cyclone during a voyage
from Melbourne to England. The vessel was carrying 2 types of cargo which eventually due to
cyclone a crack appeared in them which resulted in water entering shipment and damaging the
goods. Vessel was to pump water out of ship, due to excessive use of this ship became short on
fuel which resulted in slow workings in ship. Also water filled inside was causing serious
damage which had to be removed within time, since crack in vessel was not full-filling it's
purpose. The ship was sailed aside to repair the vessel and buy fuel. There a part of shipment was
discharged and crack was repaired (Booth, 2012). The vessel burn out due to excess use but
reached to its destination. At time of discharge of goods on dock, both goods and vessel were in
damaged condition. The shipowners were held liable for the loss and damage, luckily both were
secured and insured by rules and norms by London market provisions and bills of lading render
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standardised solution according to York-Antwerp Rules 2016. The following points will clear the
marine loss incurred and the claims one can make to receive compensation.
Indemnity clause
The most prominent maxim is used to define the indemnity clause in united kingdom
which says that “one must be damnified to claim the indemnity”. In general terms this means that
until the promisee has not undergone any damage or injury no claim can be recovered. Its is
generally created through contractual agreement between two parties which secures both parties
in case of breach and need of claim of property or good being insured in contract. Generally, it is
like assurity of goods or products for their safety and all dealers shipping products overseas are
made sure to do so, even ships are insured in case of damage though natural calamities the ship
owner can seek money for its repair (Eklöf and et. al., 2012).
Liability and Offshore Energy clauses
Offshore energy risks are covered by a fixed premium rendered by owners unit with the
liabilities of what part of the good or ship cannot be claimed or be liable for. The SOR generally
cover's area which comes under accommodation units which are present inside the ship area. It
only covers built in machinery and working outputs of any ship or product apart from that in case
of any negligence towards working of ship also removes chances to receive any claims to the
shipowners (Lee and et. al., 2013). These provide a agreement security to liabilities of a third
party or the goods/property which is on board as following:
 cleaning the pollution caused due to negligence and contract liability to control damage
caused by usage.
 Cleaning sea beds as a result of casual as a result of natural pollution (Leonard, 2016).
 Risk covers are liable to respond back at liabilities caused due to any uncertain risks
which cannot be predicted by the ship owners.
Marine and energy insurance clause
These are two separate insurance a owner of ship or insurance company provides to the
people sending their products overseas (Magris and et. al., 2014). This helps them recover
products from loss or damage while sailing in ocean. Their are certain clauses which are
contained in both insurance claims and protect them in the following conditions:
 drilling in high pressure or uncertain zones (Morrissey and O’Donoghue, 2013).
 Insured products or equipments are saved while working.
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Types of marine insurance
Their are several types of insurance policies in marine which are specific about the parts and
equipment of ships, in case any damage these are recovered through such policies:
 Cargo insurance: this policy provides insurance of goods which are being transported in
the cargo shipment (Noussia, 2012).
 Hull insurance: This insurance covers the transportation damage and serious accidents, it
covers the body and torso of ship from any sort of damage while shipping and sailing in
the sea (Orts, 2015).
 Freight insurance: This insurance covers the costing of transportation and vessel
condition of ship. In here, the money is only given for carriage of goods or products. In
case any good is damaged in the procedure then no money is given plus additional claims
are also seek from them.
 Liability insurance: its generally mixed with hull insurance, in this case if the vessel
collides with other similar vessels then a collision occurs. This damage is covered by this
insurance policy (Pearson, 2015).
Types of marine insurance principles
There are several insurance principles which provide guideline to correctly render
services to analyse. Their are seven basic principles which are followed to give certain guide of
maintaining fairness and accuracy in providing justice, which are defines below:
 bona fides: In context of marine insurance, both the parties have to render good faith
towards each other and the business deal. Sometimes the basic facts can influence basic
generality of decision making of both clients in the contract (Rose, 2013). For instance,
if the party to which the shipment is to be delivered cannot hold the cargo even if they
did not receive the payment from other party, its the bona fieds which should connect
both parties and if not it is considered as fraud.
 Insurable significance: This means that a particular ratio is added in the total money
spent on the insurance by the insurer (Sarrabezoles, Lasserre and Hagouagn’rin, 2016).
there shall be safety of proper arrival and utmost safety of insurers money over the goods
(Singleton and Roberts, 2014). The insurer might not have taken any policy to cover
their loss but in case of damage of goods and products one shall be held liable. Either
way the insurer must have insurance of products to claim all compensation of damaged
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products. In general terms the products should be covered by insurance at time of sailing
in sea even if its not insured before loading ship on shipment.
 Indemnity: This clause justifies the term of insurer getting paid at time of loss, but he
shall not make any profit from marine insurance. The clause specifically defines to pay
in cash and not replace body or equipments of ship. The net worth of the product is
calculated while applying for the policy. In some cases this amount is accumulated at the
time of loss.
There is only one general exception to this clause is that sometimes, the value of goods is also
added to the amount of goods which gives profit to the insurer.
(Tracy and et. al., 2013).
 Subrogation: in this process the loss inured by the insurer is covered by providing him
several rights and remedies. It follows a correct legal procedure to acquire the correct
guidelines to follow up the case, since all scenarios are different. This principle makes
sure that no person shall make any benefit or profit out of the compensation money
received.
 Proximate cause: sometimes the same product is covered by multiple insurance. In some
situations, multiple insurers come together to cover all the damage of shipment cargo or
equipment of ship. Is a single insurer pays all the compensation, then other are liable to
pay him back the money they owned in the claim. This procedure helps in acquiring total
amount to be claimed and amount acquired by each insurer. The immediate cause of a
loss should be determined to fix the responsibility of the insurer. The basic cause is not
the reason of accumulating th loss but he concurrence cause is.
 Abandonment: its the principle in which the property is not only claimed by the owner
but also transferred to the insurer for security purposes.
Indemnity in marine loss
Policies of insurance which are apart from life and accident policies are basic principles
for indemnity. A marine policy is generally a contractual agreement but in this insurance of
products or goods which could get damaged due to, natural calamities. The basic rule on which is
policy works is good faith in both parties. The sole purpose of getting marine insurance claim is
to decrease any monetary loss that could appear to property or products while transporting
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overseas through shipment. Here, the insurer is legally bind to provide full recovery of products
which can arise due to any accident or misshapenness. Their are some particular clauses which
cover the policy of marine insurance and extension of indemnity clause:
 duty of delivering the shipment with proper care.
 The insurance policy amount is decided by the actual market price of property.
 These are only made for proximate causes and not for general harm causes.
Measurement of indemnity
There are certain following points on which this insurance policies are claimed and are
claimed back by the property owner:
 Costing of things to be repaired compared to products insured before shipment is released
for its destination. In general terms it means that only for products which were insured
will be repaired or paid by insurance company or owners, not for any other product or
equipment of product.
 Providing indemnity is figured out by the percentage of loss occurred such as in case only
fifty percent of damage has occurred then the insurance company will only provide same
percent amount. Any amount more than that is not accepted by the company and even the
indemnity decreases due to this.
Hull insurance
Its a policy specifically created for purpose of rendering expenses for damage of ships.
The term “hull” refers to whole main body of ship, including any fixtures connected to main
body of ship. It covers all types of ships which work in ocean, lakes and rivers, policy is very
important and prominent. This policy is restricted in some areas of recovery such as:
 damage of whole body of ship.
 Machinery damage.
 Cracks in ship or vessel.
Also, it includes insurance for third party to recover losses and damaged caused to vessel and
other boats and injury to workers of ship (Surís-Regueiroand and et. al., 2013).
Doctrine of concurrence cause in marine insurance
The concurrence cause is related and connected to how any loss or damage has occurred
in any insured client even if it is result of a insured peril, which is generally the cause of loss. Its
one of the most important doctrines in insurance. This doctrines revolves around the concept of
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providing claims and properly administering and diagnosing claim of perils mentioned in policy
agreements. Some are mentioned in the clause by virtue and some are specifically mentioned in
the contractual agreement. Its generally caused due to singular insurance with other insurance
which are either payable or non payable in nature. The most complicated peril is when a insured
and uni-insured peril happens together and gives a difficult situation. The maxim which supports
it is “Causa Proxima nonremota spectatur”which means to provide immediate reaction to every
action and provide claims to recover losses as soon as possible.
Provisions related to institute clause and its application
All these clauses which are very important for figuring out he proper marine insurance
liability and proximity clause which can define proper jurisdiction in this case. This case was
filled with complicated issues where the client seek to claim the insurance of a vessel which was
not even insured but help of bull insurance which covers the claim for all the outer body of the
ship. The insurance policy is explained with details on which client can claim compensation and
insurance money for the recovery of the units. This critical analysis will clearly define the
percentage will properly provide several developments and give several division to process and
claim all the body parts and vessels of the ship. Since the insurer can provide details of being
negligence towards taking care of ship.
The provisions which are related to this case law are bull insurance, doctrines of
proximate cause and several other laws which are to be defined by them. Here the basic necessity
is to render the cause and effect solution of getting the claim of any body part of the ship.
Inspection of the body of the ship will clearly define that several damages in ship. These laws
will provide claim to the company over many clauses which are generally defined by the
procedure of the company Aquitaine for probability in sources. All the clauses mentioned and
several insurance types and principles mentioned will be defined in the case scenario of the case
law given above there are several loopholes for the company to define that it is the part of the
ship and the ship was not in condition to stop at any port to provide any destination and guide the
insurer to provide guide for claiming such methods and giving better solutions to claim hundred
percent claim for the insurance (Surís-Regueiroand and et. al., 2013).
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CONCLUSION
In this file there are several aspects of marine insurance defined to guide the study for
better understanding of this concept. It consists of seven prominent principles and different types
which will accumulate the various types and moderation of the file. Here the study of case
scenario will help in providing a clarified and clear definition of justified policies and laws
which support and guide and insurance claimer to no be in any type of loss in case of any
damage of good and products for proper assessment year and provisions to provide getting better
results.
REFERENCES
Books And Journals
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Baho, D. L., Peter, H. and Tranvik, L. J., 2012. Resistance and resilience of microbial
communities–temporal and spatial insurance against perturbations. Environmental
microbiology, 14(9), pp.2283-2292.
Booth, F., 2012. Marine insurance, jurisdiction and piracy: threats foreign and domestic. USF
Mar. LJ. 25. p.37.
Eklöf, J. S. And et.al., 2012. Experimental climate change weakens the insurance effect of
biodiversity. Ecology letters, 15(8), pp.864-872.
Lee, C. C. and et. al., 2013. Investigating the stationarity of insurance premiums: international
evidence. The European Journal of Finance. 19(4). pp.276-297.
Leonard, A. B., 2016. Introduction: the Nature and Study of Marine Insurance. In Marine
Insurance. (pp. 2-22). Palgrave Macmillan, London.
Magris, R.A. And et. al., 2014. Integrating connectivity and climate change into marine
conservation planning. Biological Conservation. 170. pp.207-221.
Morrissey, K. and O’Donoghue, C., 2013. The role of the marine sector in the Irish national
economy: an input–output analysis. Marine Policy. 37. pp.230-238.
Noussia, K., 2012. Environmental Pollution Liability and Insurance Law Ramifications in Light
of the Deepwater Horizon Oil Spill. In The Hamburg Lectures on Maritime Affairs 2009
& 2010. (pp. 137-176). Springer, Berlin, Heidelberg.
Orts, M. Á., 2015. Power and complexity in legal genres: Unveiling insurance policies and
arbitration rules. International Journal for the Semiotics of Law-Revue internationale de
Sémiotique juridique. 28(3). pp.485-505.
Pearson, R., 2015. Introduction: Towards an international history of insurance. In The
development of international insurance. (pp. 19-42). Routledge.
Rose, F., 2013. Quantifying the Indemnity. In Marine Insurance.(pp. 607-618). Informa Law
from Routledge.
Sarrabezoles, A., Lasserre, F. and Hagouagn’rin, Z., 2016. Arctic shipping insurance: towards a
harmonisation of practices and costs?. Polar Record. 52(4). pp.393-398.
Singleton, R.L. and Roberts, C.M., 2014. The contribution of very large marine protected areas
to marine conservation: Giant leaps or smoke and mirrors?. Marine pollution
bulletin. 87(1-2). pp.7-10.
Surís-Regueiro, J. C. and et. al.,, 2013. Marine economy: A proposal for its definition in the
European Union. Marine Policy. 42. pp.111-124.
Tracy, J., and et.al., 2013. Methods and systems for providing customized risk
mitigation/recovery to an insurance customer. U.S. Patent 8,515,788.
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