Parties to Marine Insurance

Parties to Marine Insurance

Parties to Marine InsuranceThere are two parties:

1. The insurance company is also known as underwriter who assumes the liability as and when loss occurs.

2. The insured is the one who procures the policy or becomes the beneficiary through the insurance contract.

Principles governing insurance are

(I) Principle Utmost Good Faith: The insured must disclose all the facts known to him. or ought to be known to him, in ordinary course of business.

(II) Principle of Insurable interest: Any person who has 'insurable interest' in the cargo only can insure. Exporter is said to have insurable interest in the safe arrival of cargo as he is the owner of the property.

(III) Principle of Indemnity: The underwriter indemnifies the loss arising from the risks covered under a policy. In a contract of indemnity, only loss is made good. However, a marine insurance is commercial indemnity, so even the reasonable anticipated profit is also made good.

(IV) Causa Proxima: The insurer indemnifies if the loss arises only from the nearest cause. If goods are stolen due to faulty packing, the insurer does not indemnify the loss.

 

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