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96 BUSINESS  STUDIES example, if a person has insured a certain sum of money is paid by his house for ` 4,00,000 the the insured in consideration for the insurer is not necessarily liable guarantee/protection he gets. Marine to pay that amount, although insurance is slightly different from the house may have been totally other types. There are three things destroyed by fire; but he will pay involved i.e., ship or hull, cargo or the actual loss after deducting goods, and freight. depreciation within the maximum (a) Ship or hull insurance: Since the limit of` 4,00,000. The purpose ship is exposed to many dangers being that a person should not be at sea, the insurance policy is for allowed to gain by insurance. indemnifying the insured for losses (iv) Theinsurerisliabletocompensate caused by damage to the ship. only when fire is the proximate (b) Cargo insurance: The cargo while cause of damage or loss. being transported by ship is subject to many risks. These may be at M arine Insurance port i.e., risk of theft, lost goods or A marine insurance contract is an on voyage etc. Thus, an insurance policy can be issued to cover agreement whereby the insurer against such risks to cargo. undertakes to indemnify the insured in (c) Freight insurance: If the cargo the manner and to the extent thereby agreed against marine losses. Marine does not reach the destination due to damage or loss in transit, insurance provides protection against the shipping company is not paid loss by marine perils or perils of the freight charges. Freight insurance sea. Marine perils are collision of ship with the rock, or ship attacked by the is for reimbursing the loss of freight to the shipping company i.e., the enemies, fire and captured by pirates insured. and actions of the captains and crew The fundamental principles of of the ship. These perils cause damage, marine insurance are the same as the destruction or disappearance of the general principles. The main elements ship and cargo and non-payment of of a marine insurance contract are: freight. So, marine insurance insures (i) Unlike life insurance, the contract shiphull,cargoandfreight.Thus,itisa of marine insurance is a contract device wherein the insurer undertakes of indemnity. The insured can, to compensate the owner of a ship or in the event of loss recover the cargo for complete or partial loss at sea. actual amount of loss from the Theinsurerguranteestomakegoodthe insurer. Under no circumstances, losses due to damage to the ship or the insured is allowed to make cargo arising out of the risks incidental profit out of the marine insurance to sea voyages. The insurer in this contract. But cargo policies case is known as the underwriter and provide commercial indemnity Reprint 2026-27