Marine Insurance

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The Marine Insurance covers the loss the policy holder might incur due to the damage of Cargo, ships, terminals by which the property  acquired and transferred and some times held between the points of origin and destination. The Cargo Insurance is a sub branch of Marine Insurance, and some times both are used interchangeably, irrespective of the fact that even the Marine Insurance includes Onshore and Offshore exposed property, Marine Liability and some times Marine Casualty as well. However when goods are Transported by mail or courier Shipping Insurance is used instead of Marine Insurance.

The Marine Insurance is one of the most ancient and earliest developed Insurance policies. In the olden days rich merchants used to provide the guarantees of the safety of the goods transported by the poor merchants by asking them to pay a small sum of money in return for the Guarantee given.After that marine Insurance typically covered only 3/4th of the liability of the policy holder towards the third party. The liabilities might arise due to collusion between two ships and sometimes even because of the wreck removal.

With the beginning of the 19th century the ship owners started a club named Mutual Under writing claims in order to protect themselves from the 1/4th portion of the risk which wasn't covered. These clubs were also called as the protection Indemnity clubs. The amazing thing about these clubs is that these are still in existence and these clubs have acted as a model for some specialised and other non commercial marine Insurance policies.

These clubs agree to accept a ship owner as a member of the club and levy an initial call on him. This call is similar to the premium which is charged by the Insurance companies. With the accumulated fund reinsurance will be purchased. In case the loss experience is unfavourable to the interests of the club and its members subsequent calls will be made. This is just like any additional premium charged by the Insurance companies, However this practise of charging extra premium by the Insurance companies is not adopted anymore by them