Essay On Marine Insurance

Insurance can protect a company/ person under a certain risk by paying some money to the imsurance company to cover it, If the risk really occurs, he can get compensation from the imsurance company. The money paid to cover the insured risk is premium. Hence, insurance is a method by pooling risks of insured companies to reduce losses through compensation.

Insurance is ususally classified into four main types: fire, life, accident and marine.

Marine insurance was originally developed by Italian merchants to compensate for the great losses which happened if a vessel was damaged at sea. They pooled their risks therefore all the merchants borne the loss if one of them lost a ship. Now, marine insurance not only prevents shipowners from lost

This process of evaluating the related risks and determining the premium is called "underwriting" and the marine insurance contract is stated in a document named a policy.

Marine insurance is commonly underwritten by insurance companies. Lloyd’s and Institutes of London Underwriters (a group of insurance companies in London) developed standard clauses for marine insurance, named Institute Clauses. Lloyd’s underwriters will undertake complicated and specialist risks.

2. Forms of Marine Insurance

In general, there are four types of marine insurance:

2.1 Hull Insurance

It covers the vessel itself and all its fittings against loss or damage at sea.

2.2 Cargo Insurance

It covers the cargoes carried by a vessel against loss or damage.

2.3 Freight Insurance

A shipping company earns the income “Freight” by transporting the goods. Freight insurance covers the expenses incurred by the shipping company if it cannot get its freight when the vessel cannot deliver the goods for some