Day 2 Flashcards
(34 cards)
Define insurance
Insurance is based on chance occurrence
Assured = Owner/Manager
Insurer = Underwriters
Intent = NOT COVERED
3rd Party = Comprehensive
There are two parties ASSURED and INSURER. The ASSURED agrees to pay a premium, so the INSURER will reimburse them following an incident/accident.
INSURER determines:
- Maximum sum
- Likelihood
What is insured
Minimum allowd = 3rd PARTY LIABILITY
PROPERTY COVERED
PERSONAL AFFECTS NOT
Person affects can be insured (additional policy)
Typically include:
- Fire/Explosion
- Theft/attempted
- Vandilsm
- Storm
- Contact with 3rd party objects
- your negligence
Define Athens Convention
CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA (PAL)
IMO LAW
MCA Regulation (SI)
Required for a charter agreement
MCA would verify it was valid (to speed up PSC)
Covers:
- Death/Injury/Loss Passenger
- Death/Injury/Loss Luggage
Not liable for loss of monies, securities, valuables, etc. Unless it is kept in a safe
Define Indemnity
means to compensate for loss of damage to provide security for financial reimbursement to and individual in case of a specifies loss incurred by the person
OWNER RECIEVES NO PROFIT
RESTORED TO ORIGINAL POSITION
(SMS - lines of communication : DPA –> Insurance)
Define subrogation
MARINE INSURANCE ACT 1906
The rights of the insurer to stand in the shoes of an indemnified insured and recover salvage for his own benefit
When the insured settles for a total loss the assured must abandon what is left of the thing insured to the underwriter.
For example;
If the insured claimed total loss for a vessel but it was found X number of years later then the underwriters own the vessel. And no compensation/claim /allowance has to be paid to the insured
PREVENTS INDEMNITY - OWNER MAKING PROFIT
What are the major functions of subrogration
- OVER-INDEMIFIED - DON’T MAKE PROFIT
- KEEPS THE INSURER IN BUSINESS - SELF FUNDING
Prevents the assured from being over-indemified under the contract of insurance for the loss insured against, at the expense of the insurer
Facilitates recoupment of the insurer for the indemnity paid to the assured- often though not invariably at the expense of the party responsible for causing the loss
Define ACTUAL TOTAL LOSS
MARINE INSURANCE ACT 1906
When a ship is destroyed or where the assured perso is irretrievably deprived of the ship (Captured and condemned as a prize of war)
MATERIAL AND PHYSICAL LOSS
NO EXCESS PAID
Define CONSTRUCTIVE TOTAL LOSS
MARINE INSURANCE ACT 1906
When the cost of saving and repairing the ship is greater than its insured value
Define PRESUMED TOTAL LOSS
MARINE INSURANCE ACT 1906
When a period of reasonable time has lapssed, and no news of the ship has been recieved.
Define PARTICULAR AVERAGE/PARTIAL LOSS
MARINE INSURANCE ACT 1906
A yacht has been damaged, the insurer will pay for the repairs
ANY LOSS OTHER THAN A TOTAL LOSS IS A PARTIAL LOSS
EXCESS/DEDUCTIABLES INCLUDED
Define DEDUCTIBLES/EXCESS
It is a portion of an insured loss to be borne by the insured before s/he is entitled to recovery from the insurer
In a policy in effect that makes the insured person liable to pay the agreed sum in respect of most of the claims that may be made under the policy.
INCLUDED:
1. Eliminate the administrative costs of processing SMALL CLAIMS
2. To encourage the insured persons to TAKE CARE of the insured yacht
3. As a general rule do not apply to claims made under the DUTY OF THE ASSURED (SUE and LABOUR)
YOU MAY PAY MORE EXCESSIVE TO REDUCE THE PREMIUM
Define Term
TERM = WARRANTY = CLAUSE
It is a predefined element in a contract
Contractual clause contained in a marine insurance policy
Define EXPRESSED WARRANTIES
They are CLEARLY stated and recorded in the contract. E.g:
- AMOUNT OF INSURANCE PREMIUM
- TOTAL AMOUNT
- EXCESS
- NAMED PERILS
- TRADING LIMITS
- CARRIAGE OR DUTY OF VESSEL
It is a NEGOITATED clause
TPA
Define IMPLIED WARRANTY
It may NOT be clearly stated and recorded in the insurance policy but is still VALID. e.g:
1.Custom (Tradition)
2. By Court decisions (Precedents)
3. By statue (Acts of parliament)
MARINE INSURANCE ACT 1906 - SEAWORTHINESS
- Not deviate
- Reasonable dispatch (Suitable time, voyage policy) MIA 1906
- Not engage with illegal operations
Define CLAUSE 1
NAVIGATION (EXPRESSED WARRANTY)
The policy is only covers damage/liability when navigating in the area covered by the policy or manner required
Define Clause 5
TERMINATION
Automatically:
1. Total Loss
2. Change of Flag/Class/Owner
3 Bareboat Charterer/charterer by demise/disponent owner (Managment company take over)
Bareboat = Partial insurance
Owner = Total (Remain)
Define Clause 2
BREACH OF WARRANTY
(SALVAGE)
You may still be covered if you breach the policy only if IMMEDIATE NOTICE is given to the underwriters and additional premiums paid
Class Maintained
Crew in compliance with flag state
How many letters
Define Clause 6
PERILS
Loss or damage to the subject matter caused by:
Sea
Fire
Violent Theft
Full list negotiated
Define Clause 8
3/4 COLLISION LIABILITY
Underwriters indemnify the ASSURED for 3/4ths of any sum paid
Paid by the ASSURED to any other persons or persons by reason
Due to the ASSURED being legally liable for
Damages for loss, other vessel or property
COMPETENT PERSON HAS THE CON
NEGLIENCE IS COVERED
P&I cover the remaining 1/4th
PROTECTION AND INDEMNITY ASSOCIATIONS OF SHIPOWNERS AND BAREBOAT CHARTERS
MUTUAL CARE
MAKE A CALL
LOCAL KNOWLEDG AND HELP
Define Tender Clause 47
It allows underwriters to decide which port and which firm of repairs will carry out the permanent repairs
Assured can VETO. Will have 15% deducted from the net claim. (don’t comply)
If accepted, so they will receive 30% per annum on the insured value for the time lost between dispatch of invitation and acceptance.
They will be compensated for the extended voyage (All)
Define Clause 10
GENERAL AVERAGE AND SALVAGE
Applies typically to cargo vessels
Act made to reduce total loss, saved some stuff
The cost is then split amongst them
Define Clause 11
INSTITUTE TIME CLAUSES HULL
SUE AND LABOUR
DUTY OF THE ASSURED
In case of ANY LOSS OR MISFORTUNE it is the duty of the ASSURED and their SERVANTS and AGENTS to take such measures as may be reasonable to AVERT of MINIMISE A LOSS, which would be RECOVERABLE under the INSURANCE
- DAMAGE
- ASSURED/SERVANTS/AGENTS ACT
- USE ALL AVALIABLE MEANS
- REIMBURSED
Only covers the cost UP TO the SUM of the INSURED
- Duty of ASSURED to limit loss
- Underwriters reimburse
- Reasonably expended for minimizing the damage
Label the ANNEXS
1- Petroleum Oil
2- Noxious Liquid substances in bulk
3 - Hazardous substances carried in packaged form
4 - Sewage
5 - Garbage
6 - Prevention of Air pollution
Label special areas in MARPOL
Annex 1 - PETROLEUM OIL
Med
Black
Red
Baltic
Gulfs
Antarctica
NW European
Annex 2 - NOXIOUS LIQUID SUBSTANCES IN BULK
Antarctica
Annex 4: SEWAGE
Baltic
Annex 5: GARBAGE
Med
Black
Red
Baltic
Gulfs
North
