Explain the basic principles of Marine Insurance.
Or, Discuss the principle of Marine Insurance.
The basic principles of marine insurance are discussed below:
1. Written and stamped agreement:
It is essential that the marine insurance contract be written in a stamped document of reasonable value. This written agreement must specify the content of the insurance, the cost of the insurance, the details of the probable accident, etc.
2. Contract of indemnity:
Marine insurance is a contract of indemnity. The question of compensation arises only if the insured is damaged. The amount of compensation will never exceed the actual loss.
3. Agreement of good faith:
All important information about the content of insurance should be disclosed to both the insurer and the insured at the time of execution of this agreement. If any information is withheld, the contract will be canceled.
4. Insurable interest:
In the case of marine insurance also, it is essential for the insured to have insurable interest on the insured product. Otherwise, the insurance contract will be considered canceled.
5. Direct causes:
Accidents can happen due to various reasons at sea. But in the case of marine insurance, the insurer will be responsible only for direct reasons. The insurer is not obliged to compensate the insured for any indirect loss.
6. Terms of contract:
The terms of the marine insurance contract are fixed in advance. This contract is mainly executed for one year. This period can be extended again later if required.
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