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INTRODUCTION TO MARINE INSURANCE Professor Proshanto K. Mukherjee Lund Universirty

INTRODUCTION TO MARINE INSURANCE Professor Proshanto K. Mukherjee Lund Universirty World Maritime University 17 November 2008. Historical Origin. Origin “veiled in antiquity and lost in obscurity”

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INTRODUCTION TO MARINE INSURANCE Professor Proshanto K. Mukherjee Lund Universirty

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  1. INTRODUCTION TO MARINE INSURANCE Professor Proshanto K. Mukherjee Lund Universirty World Maritime University 17 November 2008

  2. Historical Origin • Origin “veiled in antiquity and lost in obscurity” • Bottomry – originally a kind of marine insurance, first practiced by ancient Babylonians and Indians. • Roman era – 215 B.C. Documented evidence of fraudulent marine insurance claims. • By 50 B.C. – Major principles of marine insurance law established i.e., • insurable interest; • spreading of risk; • premium as consideration • By 13th century, marine insurance practiced by the Lombards and Hanseaticmerchants. • Early 17th Century – Rise of Lloyds.

  3. Marine Insurance Institutions • Association of Lloyd’s Underwriters • Institute of London Underwriters • International Group of Protection & Indemnity Clubs • International Union of Marine Insurers (IUMI)

  4. Marine Insurance Business & Practice • Lloyds’ S.G. Form • Lloyds’ MAR Form • Role of the Broker • Hull & Machinery Coverage • P & I coverage • Third Party Risks • Omnibus Rule • No limitation on coverage

  5. Principles of Marine Insurance • Doctrine of uberrimaefidei • Requirement of full disclosure of material facts by assured. • Carter v. Boehm (1766), 3 Burr. 1905 • James YachtsLtd v. Thames & Mersey Mar. Ins. Co. Ltd.[1976]LL.L.R. 2591 • InsurableInterest • reasonable expectation of acquiring an interest • distinguishable from wagering or gambling • “that which amounts to a moral certainty” • “benefit from its existence, prejudice from its destruction” • Lucena v. Crauford (1806), 127 E.R. 630 (H.L.)

  6. Principles of Marine Insurance • Indemnity • Compensation limited to extent of pecuniary loss • Compensation limited to contractual limit of indemnity • If unvalued policy – “to full extent of insurable value” – • Valued and Unvalued Policies • The Borre(1923), 15 LL.L.R. 175 • Subrogation • “to step into the shoes of the assured” • Castellinav. Preston (1883), 11 Q.B. 388 • Windfall • Burand v. Rodocanachi (1882) 7 A.C. 333 • Yorkshire Insurance v. Nisbet Shipping (1961), 2 AU E.R. 487

  7. Principles of Marine Insurance • Constructive Total Loss • Unique to marine insurance • Moore v. Evans (1918) A.C. 185 • Distinction with actual total loss: irretrievable deprivation or loss in species • George Cohen Sons & Co. v. Standard Mar. Ins. Co. Ltd. (1925) 21 LL.L. Rep 30. • 2 types of CTL • Unlikelihood of Recovery • Cost in excess of value of recovered property • Abandonment • Notice of Abandonment • Where CTL claimed in respect of a partial loss • Distinguished from “subrogation” • A.G. v. Glen Line Ltd et al. (1939) H.L.

  8. Marine Insurance Legislation & Contracts • The Marine Insurance Act 1906 • Institute Clauses • International Hull Clauses 2003

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