Marine Insurance
Marine Insurance (IC-67) tests the principles and practice of marine cover across cargo, hull, freight and marine liability. The exam expects you to apply insurance law to fact patterns, not just recall clause names.
Core rules and concepts
- Insurable interest: the assured must have a legal or equitable interest in the subject matter at the time of loss; marine policies may be written 'lost or not lost'.
- Utmost good faith: material circumstances must be disclosed and representations must not be misleading. Non-disclosure or misrepresentation can avoid the policy.
- Indemnity: recovery restores the assured to the pre-loss financial position. A valued policy fixes the measure; an unvalued policy uses insurable value.
- Proximate cause: the dominant, effective cause determines cover, not the last event before damage.
- Warranties: express or implied terms must be exactly complied with. In a voyage policy seaworthiness is implied; in a time policy it is not implied, though the insurer may rely on express terms and privity.
- Sue and labour, general average, subrogation: sue-and-labour expenses avert or reduce loss; general average apportions intentional sacrifice or expenditure for common safety; subrogation transfers the assured's recovery rights after payment.
- Total loss: actual total loss, constructive total loss and abandonment notice; particular average is partial loss not general average.
Worked example
Cargo insured under ICC(C) for INR 1,000,000 is damaged when the vessel grounds and seawater enters the hold; damage is INR 250,000. ICC(C) covers loss attributable to stranding, grounding or sinking, so the claim is prima facie covered, subject to deductible and exclusions. If the same wetting occurred only because rain entered through an open hatch, ICC(C) would not respond; ICC(A) might, unless an exclusion such as unsuitable packing applies. The reasoning turns on proximate cause and the selected clause set.
Traps
- Treating ICC(A) as every loss: inherent vice, delay, insolvency, inadequate packing and intentional acts remain exclusions.
- Confusing particular average with general average.
- Assuming the seaworthiness warranty is identical in time and voyage policies.
- Ignoring the sue-and-labour duty and deductible when assessing the net claim.