Confidence Insurance Group s.a.l

Ocean marine contracts are written to cover four major types of property interest:

1. The vessel or hull.
2. The cargo.
3. The freight revenue to be received by the ship owner.
4. Legal liability for negligence of the shipper or the carrier. Hull insurance covers losses to the vessel itself from specified perils. Usually there is a provision that the marine hull should be covered only within specified geographic limits. Cargo insurance is usually written on an open contract basis under which shipments, both incoming and outgoing, are automatically covered for the interests of the shipper, who reports periodically the values exposed and pays a premium based upon these values. By means of a negotiable open cargo certificate, which is attached to the bill of lading, insurance coverage is automatically transferred to whoever has legal title to the goods in the course of their movement from seller to buyer. Freight revenue may be insured in several different ways. If there is an obligation by the shipper to pay the carrier’s freight bill regardless of whether the goods are delivered, the value of the freight is declared a part of the value of the cargo and is insured as part of this value. If the freight revenue is contingent upon safe delivery of the goods, the carrier insures the freight as apart of the regular hull coverage.

Major clauses or provisions that are fairly standardized are:

1. The perils clause.
2. The “running down” clause, or RDC.
3. The “free” of particular average” or FPA, clause.
4. The general average clause.
5. The sue and labor clause.
6. The abandonment clause.
7. Coinsurance.
8. Express and implied warranties.

Each of these will be discussed in turn.

Although there are no standard forms in Inland marine insurance, most contracts follow a typical pattern. They are usually written on a named peril basis covering such perils of transportation as collision, derailment, rising water, tornado, fire, lightning, and windstorm. The policies generally exclude losses resulting from pilferage, strike, riot, civil commotion, war, delay of shipments, loss of markets, illegal trade, or leakage and breakage.The scope of inland marine is greatly extended by means of “floater” policies. These are used to insure certain types of movable property whether or not the property is actually in transit. Business floater policies are purchased by jewelers, launderers, dry cleaners, tailors, upholsterers, and other persons who hold the property of others while performing services. Personal property floaters are used to cover, on a comprehensive basis, any item of personal property owned by a private individual. They may also cover the property of visitors, or the property of servants while on the premises of the insured. They exclude certain types of property for which other contacts have been designed, such as automobiles, aircraft, motorcycles, animals, or business and professional equipment.