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Marine Transport Insurance - Coggle Diagram
Marine Transport Insurance
Importance and History of Marine Insurance
Origin of Marine Insurance
Emerged in ancient maritime trade as a way to share and mitigate risks.
Lombard Street and Lloyd’s of London
Lombards
merchants and bankers who practiced early marine insurance
Lloyd’s
historical hub for marine underwriters and insurance development
Self-insurance in International Trade
When a company assumes its own risks
High financial exposure and often lacks legal backing
Risks in Foreign Trade
Civil liability for damages to third parties
Loss or damage to cargo from natural or human causes
Core Elements of Insurance
Definition of Insurance
A contract where one party (the insurer) takes on a risk in exchange for a premium.
Key Concepts
Insurable Interest: legal relationship between the insured and the goods
Insured Risk: potential event that may cause loss
Premium: payment made by the insured
Claim (Loss): occurrence of the covered event.
Principles of the Insurance Contract
Utmost Good Faith: both parties must act honestly.
Concealment: hiding important information.
Risk Aggravation: any change that increases the risk.
Contract Parties
Insurer and insured
Documents: proposal, provisional certificate, and final policy
Obligations of the Insured
Disclose truthful information
Pay the premium and notify of any claims
Obligations of the Insurer
Compensate the insured in case of loss
Reinsurance Contract
A form of insurance for insurers to cover large or cumulative risks.
Marine Insurance: General Aspects
Applicable Legal Framework
National and international regulations apply.
Coinsurance
Multiple insurers share the same risk
One acts as the lead company; others are co-insurers.
Policies in Foreign Languages
Interpretation may depend on foreign laws and practices.
Ambiguous Clauses
Require legal interpretation.
Clear drafting is essential to avoid disputes.
Retroactive Coverage
Insurance covers losses that occurred before the policy was signed
Insurance Producers and Advisors
Sell and manage policies.
Can be independent or tied to insurers
Traditional Marine Insurance Policies
Types of Policies
All Risks: broadest coverage.
With Particular Average (WPA): covers partial losses under certain conditions
Free of Particular Average (FPA): more limited coverage.
Coverage and Responsibility
Based on maritime risks.
Differences between continental and Anglo-Saxon legal interpretations.
Temporal and Spatial Validity
Defines time period and geographical scope of coverage
Sue and Labor” Clause
Insured must take reasonable steps to prevent further damage.
Insurer reimburses these efforts
Required Claim Documentation
Includes invoices, bills of lading, damage reports, etc.
Modern Marine Insurance Policies: Clauses A, B, and C
Evolution of Marine Insurance
Adjusted to meet modern global trade needs.
Technical Structure
Each clause outlines covered risks, exclusions, and conditions.
Scope of Coverage
Clause A: widest coverage.
Clause B: medium coverage.
Clause C: basic coverage.
Common Exclusions
War, nuclear radiation, intentional negligence
Reforwarding Expenses
Covers additional transport if original cargo is damaged
Other Key Clauses
Include delay, strike coverage, liability, etc
Additional Covered Risks
Accidental Events
Fire, lightning, explosion, collision, sinking
Losses During Handling
Dropped cargo during loading, unloading, or transshipment.
Auxiliary Transport
Coverage for transport to or from the main vessel.
Other Additional Risks
Theft, wetting, staining, oxidation, contamination, breakage, leakage, strikes, civil unrest.