A claim may lie upon a marine insurance policy on ship, when by the operation of the insured perils, any of the following occurs;
ACTUAL TOTAL LOSS:
• WHEN THE CARGO IS DESTROYED AND CEASED TO BE OF ANY VALUE TO THE INSURED
• WHEN THE CARGO IS SO EXTENSIVELY DAMAGED THAT IT IS NO LONGER WHAT IT WAS EARLIER, WHEN IT WAS INSURED
• WHEN THE INSURED IS IRRETRIEVABLY DEPRIVED OF THE GOODS. LIKE, THE CARGO MAY NOT BE DESTROYED BUT CANNOT BE RECOVERED
CONSTRUCTIVE TOTAL LOSS:
• THE CARGO IS NOT APPARANTLY TOTALLY LOST OR DESTROYED BUT COMMERCIALLY IT BECOME TOTAL LOSS FOR THE INSURED- COMMERICIAL T/L
• It is a condition precedent to a claim for constructive total loss that the property be abandoned to insurer and such abandonment must be unconditional
• When the property is abandoned to the insurers, Insurers get the proprietary rights and can take over the damaged or remains of s/m
• If the insurers decline to accept notice of abandonment, it then becomes necessary for the assured to issue a writ against the insurer to recover his loss.
• After examining the loss as per assessment of the surveyor and finding the utility of the abandoned property the Insurer can decide about the validity of abandonment and also decide whether the abandoned property need to be taken over or not.
PARTICULAR AVERAGE
• PARTICULAR AVERAGE MEANS
• PARTIAL LOSS CAUSED BY INSURED PERIL
• IT IS FORTUITOUS LOSS
• WHICH IS NOT A GENERAL AVERAGE(LOSS)
• LIKE CARGO DAMAGED BY SEA WATER OR FIRE OR LOSS OF PART OF A CARGO BY ANY INSURED PERIL
• ANY LOSS OTHER THAN A TOTAL LOSS IS A PARTIAL LOSS
SALVAGE CHARGES
LOSS PREVENTION AND MINIMISATION CHARGES
• Charges incurred in preventing a loss by perils insured against are recoverable as a loss by those perils.
• Salvage charges are the remuneration payable to third parties who, voluntarily and independently of any contract, render services to save life or property at sea.
• Expenses incurred in saving distressed vessel with cargo by third party. It may take the form of towage, floating, up righting or raising up a sunken vessel.
• The services are rendered on ‘no cure-no pay’ basis
Such charges when incurred under a contract, they are treated as sue and labour charge( vessel without cargo) or general average (vessel & other parties), as the case may be.
SUE AND LABOUR CHARGES:
LOSS PREVENTION AND MINIMISATION CHARGES
• AT COMMON LAW IT IS THE DUTY OF THE INSURED TO ACT AS IF UNINSURED AND TAKE ALL MEASURES TO AVERT OR TO MINIMISE HIS LOSS COVERED BY THE POLICY
• A PERIL INSURED AGAINST SHOULD HAVE OPERATED OR LIKELY TO OPERATE IN ALL PROBABILITY
• CHARGES MUST HAVE BEEN INCURRED SHORT OF DESTINATIONI- AT AN INTERMEDIATE PORT- RECONDTIONING CHARGES
• CHARGES ARE SUPPLEMENTARY TO INSURANCE CONTRACT
• CHARGES ARE INCURRED FOR A PARTICULAR SUBJECT MATTER AND NOT FOR COMMON ADVENTURE
• CHARGES ARE INCURRED BY INSURED, HIS SERVENTS OR AGENTS AND NOT BY MASTER OR CREW
PARTICULAR CHARGES
LOSS PREVENTION AND MINIMISATION CHARGES
• CHARGES MUST BE INCURRED TO AVERT A LOSS COVERED BY THE POLICY OR TO MINIMISE SUCH LOSSES
• EXPENSES MADE TO THE BENEFIT OF SUBJECT MATTER INSURED AND NOT FOR COMMON CAUSE
• EXPENSES MUST BE INCURRED BY THE INSURED OR ANY PERSON ON HIS BEHALF BUT NOT BY MASTER OF SHIP OR CREW
• EXPENSES CAN BE INCURRED THROUGHOUT JOURNEY, EVEN AT FINAL DESTINATION PORT
• PARTICULAR CHARGES MAY BE INCURRED EVEN A LOSS IS THREATENED OR IMMINENT AND SAME IS AVOIDED BY SUCH EXPENDITURE
• PARTICULAR CHARGE IS WIDER TERM
EXTRA CHARGES
• EXPENSES INCURRED FOR PROVING OR ASSESSING A LOSS- SURVEY FEE
• SALE CHARGES AND AUCTION FEE INCURRED FOR DISPOSING OF DAMAGED CARGO
MEASURE OF INDEMNITY
• BY MARINE INSURANCE ACT INSURER UNDERTAKES TO INDEMNIFY THE ASSURED IN THE MANNER AND TO THE EXTENT THEREBY AGREED, AGAINST MARINE LOSSES…
• MEASURE OF INDEMNITY SHALL DEPEND UPON:
1) TYPE OF POLICY- VALUED OR UNVALUED
2) TYPE OF LOSS- TOTAL LOSS, PARTICULAR OR G.A.
• VALUED POLICY- THE SUM INSURED IS AGREED BETWEEN THE INSURED AND INSURER AND PAID ON TOTAL LOSS IRRESTIVE OF THE ACTUAL VALUE
• NORMALLY SUCH VALUE CONTAINS- PRIME COST OF CARGO,PROFIT, FREIGHT, INSURANCE, CUSTOMS DUTY, LANDING, CLEARAING AND FORWARDING CHARGES, OTER INCIDENTAL CHARGES
MEASURE OF INDEMNITY- TYPE OF LOSS:
TOTAL LOSS:
1) VALUED POLICY – SUM INSURED
2) UNVALUED POLICY- COST, INSURANCE, FREIGHT AND RELATED INCIDENTAL CHARGES
TOTAL LOSS OF PART:
1) VALUED POLICY- PROPORTIONATE VALUE OF THE PART LOST IN COMPARISION TO SUM INSURED
2) UNVALUED POLICY- CALCULATE THE INSURABLE VALUE OF THE PART LOST/DAMAGED
Multimodal Transportation
The concept of international multimodal transport covers the door-to-door movement of goods by two or more modes of transport under the responsibility of a single transport operator.
Multimodal Transportation of Goods Act, 1993 regulate the business of the Multimodal Transport Operator (MTO) in India
In Multimodal transport the MTO remains responsible for the goods throughout from the time of taking the goods in his charge until delivery, resulting from:
Any loss or damage to the consignment
Delay in delivery of consignment and any consequential loss/damage due to such delay while the goods were in his charge
Claim settlement Sea Voyage
Non-delivery/short landing or landing but missing consignment:
Claimant should apply to steamer agent or port as the case may be for short landing Certificate or Landed but missing certificate
Total or Constructive Total Loss:
Claimant should file monetary claim against carrier/port authority after obtaining open delivery
Partial loss:
Survey or joint survey should be claimed on steamer/Port authority
A damage should certificate should be obtained accordingly
Duty loss: No duty is chargeable on short landed or total loss consignment and necessary refund should be applied to customs authority
Bill of entry is the document to find the correct duty paid and according the duty shall be assessed by the claimant to lodge a claim on the port or transporter
General Average is declared by the steamer consignees
The Steamer agent call upon the consignees to make cash deposits before the delivery of the consignment at destination
The consignee to apprise this fact to the Insurer before making any deposit and claim the same from the Insurer
Insurable interest at the time of loss….
payment by Foreign Post Office in settlement of claim against it at the rate of Rs. 10,254.50 for each parcel representing the full insured value and service charges
term of insurance – claim payable in London
denied by insurer as property in goods did not pass to consignee
title documents which represent the goods were not handed over in exchange for the price
the consignee could not produce any documents concerning their title
LOSS CONTROL MEASURES
1.measures
Underwriters appoint Port inspection Committees to observe cargo handling, stowage, conditions of packing at port
Underwriters arrange Risk inspection of goods before accepting tail-end risks and suggestion in improving the risk
Underwriters Arranging supervision of loading and discharge of cargo to ensure loss minimisation at port
Underwriters Arrange surveys of loss to find out at whose custody the goods were damaged so as to make recovery from carriers, Port authorities and minimise the losses paid by Underwriters
2.Packaging:
Rules have been framed on safety, consumer protection, export promotion, transportation, labeling, etc.
Insurance Cos. Insist on the clients to conform to these rules
Packing specifications are laid down and insisted by IATA, Railways, Ports, etc.
Cushioning, strong outer container, Tarpaulin, Proper cover to trucks, wagons; hatch cover of ship.
3.Storage
Planned storage at warehouses at different places in transit
Cargo properly stacked
Kept under shed to protect from sun and rains
Fire protection measures are installed
Ventilation to avoid dampness or humidity
Segregation of goods as per nature of cargo
Clear passage for cargo movement
Decongestion of goods at storage place
Security of goods to avoid theft
4.Proper Handling of cargo:
28% of all cargo losses attributed to poor handling and stowage of cargo.
Trained persons should be engaged for manual handling of cargo
Careful handling while loading unloading shall reduce the losses – manual or mechanical handling right from factory/shipper’s premises to loading into trucks or wagons or containers – off-loading at Port sheds and then to wharf- loading into ship under deck- stowage inside the ship
5.Theft and Pilferage:
Improvement in Packing, containerization of goods prevents/reduces the theft/pilferage
Proper Marking and Labeling shall help in reduction of losses due to misplacement for want of identification of cargo
Repairs and reconditioning of damaged packages during transit, handling or storage
Security system at all storage places
Avoiding congestion at warehouses
Avoiding delay in clearance of cargo
6.Transportation:
Organised/Reputed transporter have the experience of carrying various kinds of cargo safely
Type of Vessel of proper class and age to help safe carriage of goods
7.Timely delivery by consignee:
Delivery of goods should be taken by the consignee at the earliest to avoid storage risks at the end of carriers godown, port, airport etc
8.Recoveries
To lodge claim in time on carriers, bailees or other third parties responsible for losses
Underwriters take the rights of the assured after compensating him and recover damages from the carriers to reduce their losses.
9.Salvage:
The loss in Marine Insurance is settled on percentage basis but in case of Total loss or total loss of a packet, the disposal of salvage is important and properly valued to reduce the loss.