Indemnity In The Insurance Industry

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MARITIME INSURANCE Marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed against marine losses, that is to say, the losses incident to marine adventure (Marine Insurance Act 1906, S.1). Indemnity is provided against the majority of losses which can occur during transit. The marine insurance market comprises insurance companies, Lloyds underwriters and private underwriters and in practice, each insurer pools the premiums received from the insured in order to pay claims and expenses, to build reserve fund against future losses and to secure a small margin of profit, hence insurance is said to be based on the principles of contribution (Harrington et al., 2004). Insurance…show more content…
This policy was paid by the traders in the form of a loan to guarantee the safe arrival of their goods by caravan Than in the year 3000 BC when Chinese merchants dispersed their shipments amongst several vessels so as to abridge the possibility of damage to the product(s). The earliest account of insurance came in the form of 'bottomry', a monetary payment that protects traders from debt if merchandise is lost or damaged. The Phoenicians and the Greeks wanted the same type of insurance with their seaborne commerce In medieval times, the guilds protected their members from loss by fire and shipwreck, paid ransoms to pirates, and provided respectable burials as well as support in times of sickness and…show more content…
Therefore premiums are also mutual and estimated for a given policy year and finally decided when the year is closed which is minimum (but also normally)three years later. Premiums are therefore referred to as" calls". An Estimated Total Call is calculated for any given ship. Calls may be charged all in advance, the full Estimated Total Call or divided into Advance and Supplementary Calls. The benefit of charging Estimated Total Call the first policy year is that the member may be able to fully budget his costs. Before the policy year is finally closed, the club can decide to cover the claims and to charge an Additional Supplementary Call. There as on why accounts are kept open is that cases continue to develop and could over time become more, or less, expensive than initially

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