What Is Marine Insurance?
A contract of marine insurance may by its express terms or by usage of trade be extended so as to protect the insured against losses on inland waters or any land risk which may be incidental to any sea voyage.
This is the oldest branch of Insurance and is closely linked to the practice of Bottomry which has been referred to in the ancient records of Babylonians and the code of Hammurabi way back in B.C.2250. Manufacturers of goods advanced their material to traders who gave them receipts for the materials and a rate of interest was agreed upon. If the trader was robbed during the journey, he would be freed from the debt but if he came back, he would pay both the value of the materials and the interest.
The first known Marine Insurance agreement was executed in Genoa on 13/10/1347 and marine Insurance was legally regulated in 1369 there.
In simple words the marine insurance includes
A. Cargo insurance which provides insurance cover in respect of loss of or damage to goods during transit by rail, road, sea or air.
Thus cargo insurance concerns the following:
- export and import shipments by ocean-going vessels of all types,
- coastal shipments by steamers, sailing vessels, mechanized boats, etc.,
- shipments by inland vessels or country craft, and
- Consignments by rail, road, or air and articles sent by post.
B. Hull insurance which is concerned with the insurance of ships (hull, machinery, etc.)
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