Transcript Marine insurance

Tomislav Skračić, MA
Undergraduate English
Course for
MARITIME MANAGERS
6th Semester
Essential reading:
 T. Skračić, Waypoint – English Textbook
for Maritime Students, Pomorski fakultet,
Split 2010, Units 29-33
• T. Trappe & G. Tullis, Intelligent Business,
Longman 2005
MARINE INSURANCE
UNIT 33
Glossary:
 maritime peril (hazard or risk at sea), insurer /
insurance company, shipowner, policy / cover (n.),
premium, liability, Lloyd's, underwriters, Protection
and Indemnity Clubs (P&I), levy, indemnity, collision,
grounding / stranding, total loss, general / particular
average, specialist policy, adventure, condition and
warranty, salvage and prizes
Unit 33
Origins of marine insurance
 Marine insurance is the oldest type of insurance. The
growth of the British Empire, the establishment of
Lloyd's of London and competitor insurance companies,
as well as a developing infrastructure of specialists such
as shipbrokers, admiralty lawyers, and bankers, gave
English law a prominence in this area which it largely
maintains and forms the basis of almost all modern
practice. The growth of the London insurance market
led to the standardisation of policies. In 1906 the
Marine Insurance Act was passed which codified the
previous common law.
Unit 33
 Although the title of the Act
refers to marine insurance, the
general principles have been
applied to all non-life
insurance. The Marine
Insurance Act included a
standard policy (known as the
"SG form"). Because each term
in the policy had been tested
through at least two centuries
of practice, the policy was
extremely thorough. In 1991,
the London market produced a
new standard policy known as
the MAR 91 form.
Unit 33
Practice
 Marine insurance covers
the loss or damage of
ships, cargo, terminals,
and any transport or
property by which cargo is
transferred, acquired, or held between the points of
origin and final destination. Sub-branches of Marine
insurance include Cargo insurance, Onshore and
Offshore exposed property (container terminals, ports,
oil platforms, pipelines); Hull; Marine Casualty; and
Marine Liability.
Unit 33
 Insurance of the vessels is generally known as "Hull
and Machinery" (H&M). A more restricted form of
cover is "Total Loss Only" (TLO), generally used as a
reinsurance, which only covers the total loss of the
vessel and not any partial loss. Cover may be on either
a "voyage" or "time" basis. The "voyage" basis covers
transit between the ports set out in the policy; the
"time" basis covers a period of time, typically one year,
and is more common.
Unit 33
Protection and Indemnity Clubs
 A marine policy typically covered only three-quarter of
the insured's liabilities towards third parties. The
typical liabilities arise in respect of collision with
another ship, and wreck removal (a wreck may serve to
block a harbour, for example). In the 19th century,
shipowners banded together in mutual underwriting
clubs known as Protection and Indemnity Clubs (P&I),
to insure the remaining one-quarter liability amongst
themselves.
Unit 33
Protection and Indemnity Clubs
 These Clubs are still in existence today and have
become the model for other specialised and
uncommercial marine and non-marine insurances, for
example in relation to oil pollution and nuclear risks.
Clubs work on the basis of agreeing to accept a
shipowner as a member and levying an initial "call"
(premium).
Unit 33
This type of insurance covers:
 Loss of life;
 Injury to crew members and others;
 Hospitalisation of crewmembers in foreign ports;
 Expenses incurred in repatriating crew members who have
been hospitalised in foreign ports;
 Repatriation of crew members of stranded or lost vessel;
 Loss or damage to cargo;
 Liabilities for damage to docks, cables (submerged or
other), shore installations, navigation aids, bridges and
other fixed or movable properties, damage to property of
any kind caused by excessive speed in harbour;
 Certain types of fines and penalties, and practically all risks
not covered by marine insurance companies.
Unit 33
 Marine insurance companies and P&I, known as
underwriters, indemnify the shipowner only for
damage and losses specified in the policy after the
shipowner proves that such damage or loss has
occurred. This is determined by surveys, entries in the
log, reports and statements submitted by the master.
Unit 33
Unit 33
Unit 33
Unit 33
Unit 33
Exercises
 Answer the following questions:
a) What is the Insurance Policy?
b) What does marine insurance cover?
c) What are the risks covered by marine insurance?
d) Explain the difference between "time" and "voyage" covers.
e) Who are the Underwriters?
f) What is covered by the P&I Clubs?
g) Explain the terms hospitalisation and repatriation.
h) How does the owner prove that the damage or loss has
occurred?
i) Who makes use of reports or statements on the accidents,
injuries, etc.?
Unit 33

Translate into English
1.
Polica osiguranja (insurance policy) je pisani ugovor kojim
(whereby) se osiguravatelj, na temelju dogovorene svote
(payment) koju nazivamo premija, obvezuje osiguranoj
strani nadoknaditi (make good to the insured) svaki
gubitak ili štetu nad imovinom obuhvaćenom policom
(specified therein).
2. Velik postotak zahtjeva za odštetu tereta (cargo claims)
posljedica je nedostatka ili neadekvatne drvene separacije
(dunnage).
3. Časnik mora napisati izjavu i sačiniti izviješće (make a
report) navodeći pravi uzrok štete.
Unit 33
4. Država je dopustila privatizaciju brodara (ship operators /
shipping companies) poput Jadranskog pomorskog servisa
i Brodospasa, ali je Obalna straža s njima sklopila ugovor o
javno-privatnom partnerstvu (public-private partnership).
5. Šteta je bila prouzročena slanom vodom (salt water).
6. Izjava časnika je izazvala (gave rise to) velike prepirke
(disputes).
7. Sjećate li se havarije (accident) turskog ro-ro broda?
8. Mučno je bilo gledati kaos i nesnalaženje (disorientation /
clumsiness) hrvatskih pomorskih vlasti i nadležnih
(competent) ministara u toj kriznoj situaciji.
9. Luka spasa (port of refuge) je zaklonište. To ne mora biti
luka s operativnom obalom (quay) i lukobranom, ali mora
biti opremljena sredstvima za prihvat (facilities for
accommodation) broda u izvanrednim situacijama.
Unit 33
 Choose some of the elements and make your own
sentences
o vessel in distress
o be appointed by
o refer to
o be known as
o place a claim
o without delay
o cover the loss
o the basis of
Unit 33
Unit 33