PRINCIPLES OF MARINE INSURANCE

📘 PRINCIPLES OF MARINE INSURANCE

  1. 🤝 UTMOST GOOD FAITH (UBERRIMAE FIDEI)
  • DESCRIPTION: Marine insurance operates on the principle of utmost good faith, requiring both the insured and insurer to disclose all material facts relevant to the insurance contract honestly and fully.
  • APPLICATION: This principle ensures transparency and fairness in the insurance relationship, promoting trust between the parties involved.
  1. 💼 INSURABLE INTEREST
  • DESCRIPTION: Insurable interest in marine insurance refers to the legal or financial interest that the insured has in the insured property, ensuring that the insured stands to suffer a financial loss if the property is damaged or lost.
  • APPLICATION: It ensures that only those with a legitimate interest in the insured property can obtain insurance coverage, preventing speculation and fraud.
  1. 💰 INDEMNITY
  • DESCRIPTION: The principle of indemnity in marine insurance ensures that the insured receives compensation only for the actual financial loss suffered due to the insured peril, up to the limit of the policy coverage.
  • APPLICATION: It prevents the insured from profiting from the insurance contract and encourages the restoration of the insured property to its pre-loss condition.
  1. ⚖️ PROXIMATE CAUSE
  • DESCRIPTION: Proximate cause refers to the primary or most direct cause of loss or damage in marine insurance, determining whether the loss is covered under the insurance policy.
  • APPLICATION: It helps in determining liability and coverage under the insurance contract by identifying the event that set off the chain of events leading to the loss.
  1. 🤝 CONTRIBUTION
  • DESCRIPTION: Contribution in marine insurance allows multiple insurance policies covering the same property to share the financial burden of a loss proportionally, ensuring fair distribution among insurers.
  • APPLICATION: It prevents overcompensation of the insured and promotes cooperation among insurers in settling claims efficiently.
  1. 🔄 SUBROGATION
  • DESCRIPTION: Subrogation in marine insurance grants the insurer the right to step into the shoes of the insured and pursue legal action against third parties responsible for the loss, after indemnifying the insured.
  • APPLICATION: It enables insurers to recover the costs of claim payments from negligent parties, reducing the financial burden on the insurance company and maintaining premium affordability.
  1. 🌊 AVERAGE CLAUSE
  • DESCRIPTION: The average clause in marine insurance applies when the insured property is underinsured, requiring the insured to bear a proportionate share of the loss based on the level of underinsurance.
  • APPLICATION: It encourages insured parties to adequately insure their property to avoid partial loss settlements and ensures equitable treatment of policyholders.
  1. 📜 JURISDICTION AND LAW
  • DESCRIPTION: Marine insurance contracts are subject to the jurisdiction and laws of the country where the policy is issued or where disputes are resolved, providing a legal framework for interpreting and enforcing insurance agreements.
  • APPLICATION: It establishes legal clarity and consistency in resolving disputes and enforcing contractual obligations between insurers and insured parties.
See also  MARINE INSURANCE

KEYWORDS: Principles, Marine Insurance, Utmost Good Faith, Insurable Interest, Indemnity, Proximate Cause, Contribution, Subrogation, Average Clause, Jurisdiction and Law.

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