Reasons You Need Marine Hull Insurance Exporting Next Consignment via Water
Marine incidents are unforeseeable. They may occur at any moment. In addition, a ship generally. exports goods or products to another nation. Therefore, it is important to subscribe to marine hull insurance for exporting the next consignment via water. The insurance covers the insured against several types of loss and damages.Read more
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Marine Hull Insurance for Exporting Next Consignment via Water
Generally, people purchase marine cargo insurance in order to secure goods or products. However, a marine owner must care about the vessel and its machinery. The hull is pivotal for exporting goods. Therefore, the insured must purchase marine hull insurance for exporting the next consignment via Water.
Let us understand the importance of marine hull insurance for exporting the next consignment via Water.
The damages to machinery or marine hull can be substantial. The repairing cost of the body of the ship and its machinery may incur a significant amount. Therefore shipping companies, ship owners, and builders must purchase marine hull policies. The policy shall cover the risk or damages to the body of the ship.
Whenever an individual purchases a car or home on loan, the financial institution or bank interrogates the insurance policies for the same. Similarly, while purchasing a ship on a loan from the bank, the financial institution requires the ship owner to ensure the marine hull against any damage. Therefore, in case of any loss to the marine hull, the insurance company shall compensate the bank.
The marine hull insurance for exporting the next consignment via Water consists of a crucial clause of the collision. Ship collisions are common. It may occur at any moment in the sea arena.
As a result, the collision is likely to give a rise to a third-party claim. It may further give rise to legal liability and involve the filing of lawsuits for the coverage of damages.
The owner of the ship may incur a heavy loss due to the collision. Therefore, the ship owner must delegate this responsibility to the insurer by subscribing to the marine hull insurance policy. The insurer shall bear the third-party claim and indemnify the insured against several losses.
Marine insurance offers coverage against the following risks:
- The insurer shall bear the cost of the hull along with its machinery and equipment.
- Damage to the hull due to fire or theft shall be compensated by the insurance company.
- Accidental damages caused due to earthquake or flood shall be reimbursed.
- Damage caused to the third party shall be borne by the insurer.
The policyholder may worry about the existence of an insurance contract upon non-payment of the premium.
Let us understand the validity of the contract by interpreting the following case law.
Dominion Insurance Ltd v Westpac Banking Corporation
The plaintiffs owned an insured vessel. The bank was the mortgagee of the ship. The insured was the defendant in the lawsuit.
The plaintiffs purchased the insurance policy from the defendant (insurer) in 1990 and renewed the policy three times in October 1991, October 1991, and October 1993, respectively. In March 1994, the ship was damaged. The insurer denied the coverage on the ground of non-payment of the premium.
Whether the non-payment of premiums affects the existence of an insurance contract?
The court interprets the history of dealing with the parties under the said circumstance. Further, the court also analyses the renewal notice. The court in its finding discovered that when the insurer demands the payment for the renewal, it does not expressly or impliedly states the cancellation of coverage due to non-payment of premium.
Therefore, it is the practice of the insurer to renew the insurance without receiving the payment. Hence, the insurance contract shall be valid.
Marine insurance acts as a safety belt and provides coverage against damages and losses caused to the marine hull. The insured may further subscribe to the add-on cover in order to enhance the scope of the marine hull insurance against war, terrorism, etc.