Marine insurance in India protects ships, cargo, and marine property against financial losses. While it was originally based on UK law from 1906, India first created its own Marine Insurance Act in 1963. This was later updated to the Marine Insurance Act 2015 to match modern maritime needs better.
The 2015 Act outlines what is covered, what is not covered, and how it affects everyone involved in maritime operations. Let’s learn about marine insurance policy legislation in detail.
The Marine Insurance Act 1963
This foundational act established the first structured framework for managing marine insurance in India. Its provisions cover the formation and interpretation of marine insurance policies, the duties of the parties involved, and the handling of claims.
India trades approximately 95% by volume and around 70% by value via maritime transport. Hence, the Government aims to offer support to businesses with such insurance acts & regulations.
Insurance providers like Tata AIG have been helping businesses and traders with a seamless experience from purchasing the policy to final claiming. The new act also helps the insurance providers as well.
What is the Marine Insurance Act 2015?
Since the Marine Insurance Act 1963 was based on the British Act and India has witnessed a huge progression in trading, the Govt. of India introduced the Marine Insurance Act 2015. This revamped act has numerous changes and critical updates to enhance the law. The new act meets international standards and supports the trading industry. These amendments include:
Introduction of Electronic Commerce
The 2015 changes make it easier to handle marine insurance online. Now, you can manage documents and communicate through the Internet. This speeds up how quickly insurance claims and policies are processed and fits well with how businesses work today.
Clarification on Constructive Total Loss
These changes make it clearer when you can claim a total loss for your insured items like ships or cargo. This reduces disagreements by clearly outlining under what situations and how the calculations are made to decide if something is a total loss.
Streamlined Claims Process
The amendments set clear deadlines for when claims need to be filed and resolved. This makes the whole process faster, which means quicker payouts and less hassle for both the insurance companies and the people insured.
Increased Transparency in Policy Terms
The new rules require that all the details in the insurance policy be clear and easy to understand. This way, there’s less confusion and fewer legal problems. It spells out everything about what’s covered, what’s not, and what everyone involved is supposed to do.
Regulatory Enhancements
The act strengthens the regulatory framework by giving more powers to the Insurance Regulatory and Development Authority of India (IRDAI). This ensures that all the insurance companies in India are following the policies and that their practices are fair & helpful to customers.
<h3>Technological Incorporation
The updated rules in the 2015 Act accept digital records and communication as official for marine insurance. This means you can manage insurance matters online legally.
Exclusions in Marine Insurance Policies
Marine insurance policy does not cover everything. There are specific exclusions in marine insurance to reduce risks for insurers, such as:
Natural Wear and Tear
If a ship or cargo naturally gets old or worn out is not covered.
Wilful Misconduct
If damage is caused on purpose by the insured person, it won’t be covered.
War and Nuclear Risks
Losses from war or nuclear problems are usually not covered unless the policy specifically says otherwise.
Important Marine Insurance Clauses
Marine insurance policies have detailed clauses that explain what’s covered and what’s not. Following are some of the key components.
Institute Cargo Clauses
These are standard rules for cargo insurance that explain what losses are covered.
Hull and Machinery (H&M) Clauses
These cover damage to the ship itself and are essential for shipowners.
Protection and Indemnity (P&I) Clauses
These clauses cover the costs when someone sues the shipowner for causing damage or injuries.
Implications for the Maritime Industry
The Maritime Insurance Act offers easy & clear guidelines that help everyone involved in the trade to understand their roles and limitations. India’s maritime sector depends heavily on shipping for international trade. The implication helps in the stability and growth of this sector.
Conclusion
If you are a trader or a business person who deals in the maritime industry, it is important to understand the Marine Insurance Acts of 1963 and 2015. These are crucial for supporting your business as well as India’s maritime industry.
They provide essential protection against losses and help make international trade smoother. As global trade and maritime activities grow, these laws help manage and reduce the risks associated with sea transport.
