A marine insurance contract basically refers to a mutually agreed-upon insurance agreement between two parties. In this, the insurer and the assured agree on the way the payment is going to be made for any sort of damages that will or could occur during the journey. This agreement makes this process easier automatically as the terms and conditions have been listed beforehand for both parties making it a smooth process.
The features of a marine insurance contract that are important are as follows:
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Insurable Interest:
There needs to be an insurable interest or else the agreement and policy will be void. Any person who has their goods being transported via a marine journey and can be affected has an insurable interest in it.
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Proposal and Acceptance:
Once the contractual agreement has been drawn up and there is a proposal for the assured, the insurer accepts the contract. The policy can also be derived via a contract in case it has not been issued separately. The insurance policy must include and specify:
- The name of the assured
- The subject that is insured
- The risk against which it has been insured against
- The policy that has been mutually agreed upon
- The names of the signatories
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Consideration:
The premium is referred to as the consideration in this agreement. The premium is then paid when the execution of this contract is being carried out.
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Policy Issuance:
Once the contract has been signed, stamped it can be used legally in the court of law. Despite its issuance, the policy can be changed and rectified by the court in accordance with the intentions of the signatories.
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Floating:
A floating policy is more of an open policy where all the things are no defined clearly. A marine insurance policy is one such floating policy. Here it is left open. For example, the general terms are mentioned but specifics such as the specific ship names have been left out. These are only decided later on hence making it a floating policy.
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Assignment:
The policy and contract can be transferred as per the assignment. This can however not be done if there is a clause that does not allow this and actually prohibits this specifically. It can only however be transferred before a loss has been incurred or after one has been incurred and not during it.
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Utmost Good Faith:
This contract is based on the principle of good faith. All details must be shared between the insurer and the assured and nothing must be neglected or left out. It is the duty of the parties to disclose all facts and figures and evaluate all possible situations that may occur. The assured must be aware of any ordinary or extraordinary situation that he could possibly be embroiled in.
Hence, a marine insurance contract contains several features and these are some of the most important ones that you should remember while purchasing a plan from an insurance company.
