In this article, we will discuss Marine Insurance (Introduction). So, let’s get started.
Origin and Development of Marine Insurance
The History of Marine Insurance in England is associated with the history of Lloyds. The word “Lloyds” is associated with the name of Edward Lloyd, a small coffee-house keeper where in towards the latter part of the seventeenth century, the commercial community interested in shipping met The Italian merchants who introduced the practice of marine Insurance in England were known as Lombards. The frequenters of “Lloyds” coffee-house were not allowed the privilege of conducting the marine insurance on a monopoly basis and it was in 1720 that the parliament allowed two more marine insurance companies to be established in London. In 1820 an Act was passed by which marine insurance in England was thrown open and thereafter many other insurance companies together with Lloyds formed the marine insurance market of London. Lloyds were incorporated in 1871 under Lloyds Act of that year and the same was amended by Lloyds Act, 1911.
According to history of Marine Insurance, all trade operations of any nature, until 17th century had operated by Sea from one port to another port. When transport facilities were gradually developed the other modes of conveyances like Road, Rail, Air were utilised With the development of various modes of conveyances, marine insurance is now extended to cover the transit risks while the cargo is shipped/dispatched by different modes of conveyances according to the convenience of the shippers.
Need for Marine Insurance
Marine Insurance occupies an important position in overseas commerce. It enables the parties engaged in overseas trade to venture their capital more freely since it affords protection against fortuitous losses. The advance made by the Bank is secured on the goods if marine policy is obtained by the client. Where shipments are not financed by a Bank, common prudence suggests that the client should obtain marine policy to protect his financial interest. In terms of Section 2 of The Insurance Act, 1938. “Marine Insurance Business” means the business of effecting contracts of insurance upon vessels of any description including cargoes, freight and other interests which may be legally insured, in or in relation to such vessels, cargoes and freight, goods, wares, merchandise and property of whatever description insured for transit by land or water, or both, and whether or not including warehouse risks or similar risks in addition or as incidental to such transit, and includes any other risks customarily included among the risks insured against in marine insurance policies. The law of marine insurance has been codified by the Marine Insurance Act, 1963.
Who are entitled to Marine Insurance
The following are only entitled to Marine Insurance
Individual person (s)
Bank or any financial institution
Who are not entitled to Marine Insurance
Clearing and Forwarding Agents