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1. Define Marine Insurance

Marine Insurance is an insurance against risks connected with
navigation, to which a
ship, cargo, freightage, profits, or other insurable interests
in movable property, may be
exposed during a certain voyage or a fixed period
of time.
Marine Insurance is a contract whereby, for a consideration stipulated
to be pain by one interested in a ship, freight or cargo subject to marine risks,
another undertakes to indemnify
him against some or all those risks during a
certain period or voyage. (as defined by American authorities)
2. Is Marine Insurance always a perfect contract of indemnity?
NO. For example, under an unvalued policy on goods, in the ordinary
form, and without any special clause, the assured would probably receive an
amount less than his real loss, while a valued policy he may receive an amount
which either exceeds or falls short of his real loss. It is
on the form of policies
3. What properties are covered by Marine Insurance?
Our present law cover any property interest that may become subject
to the perils of
the sea, barring illegality of the venture.
4. What are the different kinds of Marine Policies?
Ans: The following are the different kinds of Marine policies:
a. Interest and Wager policies
Interest policy- is one in which the insured has a real substantial
interest in the thing
Wager policy- is one which the insured has no such interest
b. Valued and Open Policies
Valued marine policy- is one in which the parties have agreed on the
value of the
subject matter of the insurance
Open or Unvalued Policy- is one which the parties have stated no sum
as the value of
the interest, but have left the amount to be
proved in the event of a loss
c. Voyage, Time, and Mixed Policies
Voyage Policy- is one which covers loss on a trip between designated
Time Policy- limits the risks to a specified period of time
Mixed Policy- has elements of both voyage and time policy
d. Floating or Running Policies (Open Policy)
- a contract whereby the underwriter agrees to insure property of the
insured the
particulars of which are to be subsequently determined in
accordance with stipulations
contained in the policy

5. What are risks insured against in marine insurance?

The law includes not only all risks connected with navigation or
transportation but also
those connected while being assembled, packed, or
prepared for shipment, or during delays
storage, transhipment, including war
risks, marine builders risks, and all personal property
floater risks inclusive of
third-party liability.
6. Distinguish Perils of the Sea and Perils of the ship
Perils of the Sea is defined as referring only to the fortuitous
accidents or casualties of the seas and not to the ordinary action of the winds and
The following are the requisites:
a. The violence must be unusual or unexpected; and
b. the peril must be connected with navigation or maritime in character.
Peril of the Ship is a loss which, in the ordinary course of events,
results from the
natural and inevitable action of the sea, from ordinary wear and
tear of the ship, or from the
negligent failure of the ships owner to provide the
vessel with proper equipment to convey the cargo under ordinary conditions.
7. What is a Free of Capture and Seizure clause?
Ans: A clause contained in an ordinary marine policy eliminating many risks of
warlike operation.
8. To be covered by a marine insurance policy, what does the term arrests, etc. of
kings, princes and peoples means?
The term arrests, etc. of kings, princes and peoples refers to political
or executive acts and does not include a loss caused by riot or by ordinary judicial
9. Define Barratry
It is a wilful misconduct on the part of masters or crew, in pursuance of
some unlawful
or fraudulent purpose, without the consent of the owners, and to
the prejudice of the owners;
interest. (e.g. selling or running away with the ship,
burning or scuttling the ship, unlawful selling
of cargo, and making away with
the proceeds of the cargo)
10. What is Jettison?
Jettison is the intentional casting overboard of any part of a venture
exposed to peril, whether it be of the cargo, or of the ships furniture or tackle, in
the hope of saving the rest of
the venture.
11. What is an Inchmaree clause in marine insurance?
It is a clause in a policy providing that the insurance shall cover loss of,
or damage to, the hull or machinery through negligence of the master, charterers,
mariners, engineers or pilots, or
through explosions, bursting of boilers,

breakage of shafts, or through any latent defect in the

resulting from want of diligence.

machinery or hull not

It does not dispense with the requirement that the vessel be seaworthy
at the inception
of the voyage
12. When does insurable interest in marine insurance exist?
The assured in a marine insurance contract need not have an insurable
interest at the
time the insurance is effected but he must have reasonable
interest expectation of acquiring
such interest and he must have an interest
at the time of loss.
13. Under the Insurance Code, what is freightage?
Ordinarily, freightage is defined as the total capacity of a ship available
for the carriage
of cargo.
However, under the Insurance Code, it refers to all benefits derived by
the owner either
from the chartering of the ship or its employment for the
carriage of his own goods or those of others.
14. When does the insurable interest in freightage exist?
a. in a charter party, the insurable interest on the expected freightage
commences when the ship commences the voyage agreed upon.
b. If there is no charter party, insurable interest on expected freightage
exists from the
time that the goods are actually on board. And if there is some
contract for putting goods on
board, the insurable interest on expected
freightage exists form the time both ship and goods
specified voyage.
15. Define Concealment
Concealment is the neglect to communicate that which a party knows
or ought to communicate
Concealment in the law of Marine Insurance, is failure t disclose any
material fact or circumstances in relation to the subject matter f the contract
which may increase the liability for loss or affect the risk or obligation
assumed, and which is, in fact or law, within, or ought to be within, the
knowledge of on party, and of which the other party has no actual or
presumptive knowledge.
16: What are the requisites of Concealment?
The following are the four requisites:
a. the party concealing must have knowledge of the fact concealed;
b. the fact concealed must be material to risk;
c. the party concealing makes no warranty as to the fact concealed; and
d. the other has not the means of ascertaining.

Section 28 of the Insurance Code provides that each
party of insurance must communicate to the other, in good faith, al facts
within his knowledge which are, material to contract and as to which he
makes no warranty, and which in other has not the means of ascertaining.
The contract if founded on utmost good faith or under the principle of
uberrimae fidie; and if it be not observed by the party the contract may be
Also, it is prerequisite to the liability of the underwriter, under
any of the clauses, that the loss be proximately caused by the peril insured
against and claimed under.
17. What is an insurable interest?
Insurable interest is one the most basic of all requirements in
insurance. In general, a person is deemed to have insurable interest in the
subject matter insured where he ha a relation or connection with or concern
in it that he will derive pecuniary benefit or advantage from its preservation
and will suffer pecuniary loss or damage from its destruction, termination or
injury by the happening of the event insured against.
Section 10. Every person has an insurable interest in the life and
(a) Of himself, of his spouse and of his children;
(b) Of any person on whom he depends wholly in part for education or support, or in
whom he has a pecuniary interest;
(c) Of any person under a legal obligation to him for the payment of money, or
respecting property or services, Of which death or illness might delay or
prevent the performance; and
(d) Of any person upon whose life any estate or interest vested in him depends.
18. Distinguish Actual and Constructive loss
Actual Total loss is one where the subject matter is wholly annihilated
or has ceased to remain in specie or where the subject matter, although
remaining in specie, I irretrievably lost to insured and underwriter. (See
Section 130)
Constructive Total loss (Technical Total loss) is where the loss, although
not actually total, is of such a character that insured is entitled, to treat it as
total by abandonment.
19. Distinguish General average and Particular average
General Average
Particular Average is the liability attaching to a Marine Insurance policy
in respect of damage or partial loss accidentally and immediately caused by
some of the perils insured against, to some particular interest.

20. What is Deviation?

Deviation is a departure from the course of the voyage insured,
mentioned in the last two sections, or an unreasonable delay in pursuing the
voyage or the commencement of an entirely different voyage.(Section 123)