1. MARINE INSURANCE

7. Historical Background

8. Llyod’s Coffee Shop

9. Historical Aspects of Insurance
The earliest beginning of insurance were in the field of marine insurance.
The traders attempt to minimize the losses by spreading the losses amongst all who were similarly engaged.

10. cont..
Normally, many ships arrived safely in port and only few suffered losses.
The many who were successful contribute to overcome the suffering of those who were unsuccessful.
This was achieved by the payment of premium into a common fund.

11. cont..
Profitable
Group of men who specialized in managing the fund by studying the rates of loss which occurred in the different types of marine adventure.

13. Definition of Insurance

14. What is Insurance?? Loss sharing arrangement
Spreading the risk of loss faced by a specific person or enterprise to all parties who pool their resources to pay for individual losses.

15. Essential Features of Insurance
It is an economic Institution
It is based on the principle of mutuality or cooperation.
Its objective is to accumulate funds to pay for claims that arise as a result of the operation of specific risks.
Only certain risks can be insured against (namely those whose occurrence can be confidently estimated with a certain degree of accuracy.)

16. What is the Insurance service
It Involves payment of contracted benefit or indemnify to the insured or a third party against unforeseen losses.

17. So.. Insurance means..
A contract (policy) in which an individual or entity receives financial protection to indemnify against losses from an insurance company, which pools client's risks to make payments more affordable, in exchange for a premium.

18. Functions of Insurance

19. Functions of Insurance
Primary Function
The equitable distribution of the financial losses of the few who are insured among the many insured.

20. cont.. Secondary Functions 1. Stabilization of Cost
Avoid the necessity of having to freeze capital to providea financial protection against losses.

21. cont.. 2. Stimulation of Business Enterprise
3. Provision of Security for Expansion of Business
4. Reduction of Losses
5. Provision of Sources of Capital for Investment

22. Marine Insurance Definition

23. Marine Insurance
A contract of 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.
(S.1 Marine Insurance Act 1906)

24. Marine Adventure S.3 Marine Insurance Act 1906.
There is a marine adventure where:-
1- Any ship goods or other moveable are exposed to maritime perils.

25. Cont..
2- The earning or acquisition of any freight, passage money, commission, profit, or other pecuniary benefit, or the security for any advances, loan, or disbursements, is endangered by the exposure of insurable property to maritime perils

26. Cont..
3-Any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property, by reason of maritime perils.

27. Maritime Perils
the perils consequent on, or incidental to, the navigation of the sea,
that is to say, perils of the sea, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind or which may be designated by the policy.

28. Cont..
The term "perils of the seas" refers only to fortuitous accidents or casualties of the seas (heavy weather, sinking, stranding, collision, contact),
It does not include the ordinary action of the winds and waves.
FIRST SCHEDULE (s 30), MIA 1906

31. MIXED SEA AND LAND RISKS
extended so as to protect the assured against losses on inland waters or on any land risk which may be incidental to any sea voyage.

33. Non-Marine vs Marine Non-marine insurance:
Insurance of persons: it deals with the life, physical integrity or health of the insured and is divided into individual insurance and group insurance.
Damage insurance: property insurance and liability insurance.

34. Cont..
Marine insurance: the object is to indemnify the insured against losses incident to marine adventure.

35. Differences
Marine policies value the assured’s interest at the date of policy rather than at the date of the loss.-S 16
A marine contract is enforceable only if embodied in a policy- S 22

36. Subject Matter Insured

37. Subject matter insured
Ship
- Hull Policies
Goods
- The Institute Cargo Clause (A),(B) and (C)
Moveable Freight
Profit
- Profit on Goods
- Profit on Charter

38. Cont.. Commission Disbursement Seamen’s Wages
Venture Undertaken By A Company
Liability to a Third Party

39. Marine Risk
Refer to Hull and machinenary policy 1983

40. THANK YOU Q & A