The following are the essential characteristics or
fundamental principles marine
insurance contract: (1) FEATURES OF GENERAL CONTRACT: It
comprises offer, acceptance, lawful consideration ands issue of policy. Broker prepares the slip after getting
shipowner’s instructions merchant or other prepares . The
original slip is presented to a Lloyds underwriters who initials the
slip and it is accepted ,. The premium is determined on the assessment of the proposal.
The premiums is
the consideration . The broker then sends the cover note with the terms and conditions of
the insurance . (2)
INSURABLE INTEREST: The insured
should have insurable interest in the subject matter of the insurance . When a man stands in a pecuniary relating a money relationship
with the subject matter of insurance , he is said to have insurable
interest. Silence marine insurance
id frequently effected before the commercial transactions to which they
apply are formally completed. It is not
essential for the insured to have an insurable interest at the time of effecting insurance
, he does not become entitled to indemnifications . Since the ownership and other interest of the subject
matter often change from hands to hands, the requirements of the insurable interest to be present only at the time of loss makes a marine insurance
policy freely assignable.
However there are two exceptions. (a) LOST OR NOT LOS T: There is no bar to buy
an insurance policy
even if they does not know about the
existence of the subject matter. There is complete reliance on mutual good faith of parties. If
one of the parties knows about the
subject matter and does not disclose, then the contract is void. (b)
P.P.I POLICIES : insurance policy itself is the insurable interest in such a policy (policy Proof of
Interest) . If loss takes place, the
insurer will not verify the insurable interest of the holder. These are not
legally enforceable through insurers keep their promises. The following parties may be said to have
insurable interest in marine insurance : (a) Owner of the ship has an
insurable interest on his ship and freight at as he is likely to suffer
financial loss in case of an accident or loss of ship : (b) Crew of the ship have insurable interest
to the extent of their wages and salaries: ( C ) Owners of a ware houses nor
any other bailee has insurable interest as he has certain responsibilities for the goods: (d) A mortgagee of a vessel or
a lender has an insurable interest to the extent of his dues only:
(e) Holders of bottomry and respondentia bonds (contracts authorizing the captain of
the ship to borrow money on the security
of the vessel or against the
security of the cargo) to the extent of their loan: (f) The cargo -owner can purchase policy up to the full price of the cargo. If
he has paid the freight in advance, he
can take the policy for the full price of the good plus the amount of price plus the
expenses of insurance . (g) The insurer under a contract of
marine insurance has an insurable interest in his risk and may
re-insure in respect of it: (h) Husband and wife have a mutual interest in each other’s property (1) The consignee as also the consignor of any consignment has an insurable interest in the
goods.