Understanding Marine Insurance - History And Nature

A Marine insurance is a contract, whereby the insurer promises to indemnify the insured person against all the losses, which may occur to the subject matter of the policy. A policy of marine insurance contains the terms and conditions and the manner for providing indemnity to the assured for losses suffered in respect of the subject matter, in the course of any marine adventure.

History and Evolution of Marine Insurance:

Marine Insurance first began during the end of the 12th Century in the cities of Northern Italy, and was the first type of insurance imported to England. They wrote the first policy of its kind in 1300s.

                In the ancient times, different kinds of trades took place. Firstly, trades were land based. Moreover, later on, there was use of even the water route for trade purposes, and water transportation became more commercially significant. On passing of the Bubble Act, 1720, two insurance companies, by the names of London Assurance and Royal Exchange Assurance, obtained charters in 1720. In 1860s, after the passing of the Joint Stock Companies Act, 1862, many companies providing marine insurance came into existence. Now, the Marine Insurance Act, 1906, regulates the Marine Insurance business in England.

                In the early 18th century, the merchants from US generally obtained insurance in London. Later on, by 1740s, insurance brokers started operating in Philadelphia and Boston. The formation of The Insurance Company of North America, America’s first Marine insurance company, was in 1792 in Philadelphia. In the US, unlike Britain, the individual underwriting in marine insurance had completely disappeared by 1815, and most of the marine insurance businesses were carried on by joint stock companies, including six in New York, five in Baltimore, seven in Boston, and eight in Philadelphia.

Marine Insurance at present and its types:

The Marine Insurance business has come a long way since its inception. At present, there are numerous companies providing marine insurance policies. Classification of Marine Insurance is in three parts

·         Hull Insurance - ‘Hull’ means body or the frame of a ship or boat. Hull insurance is concerned with the insurance of the hull, machinery, etc. of ships/boats. There are various categories of ships and vessels, like coastal vessels, ocean steamers, fishing vessels, sailing vessels, dredgers, builders, inland vessels, jetting and wharves, etc.

·         Freight Insurance The ship-owners not only have an insurable interest in the ship, but also in respect of the earning of freight during the period of insurance. ‘Freight’ denotes the amount of profit derived by the owner of the ship by employing his ship to carry goods of his own, or of a third party.

·         Liability Insurance - The marine insurance policy may further cover the hazards of collision or running down.

·         Cargo insurance - Cargo means any kind of merchandise, property, wares, goods, etc. carried on ships. Cargo insurance may be included in a marine insurance policy.

While choosing a marine insurance policy, one must understand his requirements first. There are Insurance agents in Elgin providing various kinds of insurance, including retirement, medicare, long term care, short term care and insurance policies. Insurance agents determine the specific needs of every customer and curate the best policy for their benefit, ensuring total customer satisfaction.