A Guide for Marine Insurance Terms
Usually, legal terms are so hard to understand that you tell yourself not to bother with insurance topics. But hey, everyone needs insurance; it is for your own safety, for your family and for your properties. It is an obligation that you must follow, because some insurance laws are state required. For example, you own a boat or a ship, and then you are required to purchase insurance because owning such a big property can be a big liability for you. And if something happens to your property or if your property can cause damage, then an insurance would be a really great help for you. To help you understand the terms in your insurance policies, below are some terms for your use.
Abandonment is a term in marine insurance which describes the right of the owner of the property to demand full settlement from his insurer even though he has abandoned damaged or lost property.
Act of God means incidents that happen as a result of natural occurrences like a typhoon or earthquake. And for that matter, big storms can do a lot of damage to your vessels.
Additional Perils which is also sometimes termed as Special Perils involve losses as a result to explosion, aircraft, storm, earthquake, malicious damage, or burst water pipes. These are considered as extensions which broaden the scope of the policy on basic fire insurance.
An agent is different from an insurance broker because unlike brokers, an agent seldom has high amount of professional expertise or passage to markets worldwide. They only represent insurance companies and they do little to help you in major claims.
An All Risks is coverage for insurance utilized for important items. In marine insurance, this term is called as Institute Cargo Clauses.
Average for marine insurance describes the loss, while particular average describes partial loss. General Average, on the other hand, refers to a claim that is made by owners of a cargo that might be included in a loss to owners of vessels that happens to ship that particular cargo.
Your broker is the one who represents your interests during insurance claims. Standards of profession vary in different countries and if you really want true professional advice, choose a broker whose level of experience and expertise is high.
A Builder’s Risk refers to a policy in marine insurance that covers a vessel in the event of its construction until it is passed to the owners.
A Constructive Total Loss refers to a partial loss of great importance that the price of repairing the damaged vessel exceeds the vessel's true value after it is repaired.
A Demurrage refers to the loss of usage of an owner of a vessel if his ship is limited to the port due to the ship's damage or due to the delays in unloading or loading of cargo.
Free of Particular Average refers to the exclusion of total loss or of partial losses. This is a set of insurance conditions on marine cargo which provides narrow coverage. This has been replaced by the Institute Cargo Clauses.
by Maria-Goldsmith 19 years ago