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The main function of marine insurance is to compansate the 'insured' for loss or damage caused by the risk insured against. in many case the 'compansation' by the insurers takes the form of 'indemnity'. what do you understand - Essay Example

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It dates back to the 19th Century when the Llyods of London hired the services of private individuals who would underwrite their voyages and compensate them in case of losses or damages during their marine adventures. In the…
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The main function of marine insurance is to compansate the insured for loss or damage caused by the risk insured against. in many case the compansation by the insurers takes the form of indemnity. what do you understand
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Extract of sample "The main function of marine insurance is to compansate the 'insured' for loss or damage caused by the risk insured against. in many case the 'compansation' by the insurers takes the form of 'indemnity'. what do you understand"

Download file to see previous pages Despite the drawbacks in marine insurance, it still remains an important form of insurance and this paper evaluates its function and application in the modern world and critically evaluates the forms of indemnity applicable.
In the period around 215 B.C., Noussia (2008) notes that the Llyods of London had developed measures to protect their interests as they ship their cargo for trade to West Indies. They would cooperate with their fellow merchants to assume some portion of the risk involved such that in the event of a loss, they would share. As time passed by, individuals with no interest in such maritime adventures started insuring these adventures. In this case, the merchants would pay premiums to these individuals and transfer the risks in these adventures to them.
Insurance Information Institute (2010) acknowledges that the main function of marine insurance has been to compensate the insured in case of losses suffered as a consequence of the insured risk. The owner of the vessel would have the insurable interest on the vessel covered against damages or losses. Liability against third party would also be covered. Similarly, the owner of the cargo in the vessel would be compensated in case of a loss. The crew would also have their interest in payment protected by marine insurance.
Marine insurance covers losses and damages due to loss or physical damage on the insured vessel as a whole, the hull or leased equipment. These would include navigation instruments, annexes, the propulsion, power generators, installations and equipment. If the stores and bunkers would not have been insured separately, they would also be covered against damages or loss. Kingston (2005) also identifies compensation for losses due to the vessels colliding with fixed or floating objects, which is known as collision liability. Not only would such losses be caused by the vessel but also due to collision with hawsers, chains, anchors and annexes. However, losses resulting from delays of ...Download file to see next pagesRead More
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