TYPES OF MARINE INSURANCE

   (1) HULL INSURANCE: The term “HULL” refers to the frame or body of the ship or vessel and its machinery  . As the ship/ vessel/ hull moves from the one part to mother and it may be subject to marine perils, hence  insurance is effected against the risks. There are a number of classification  of vessel  such as a ocean steamers, sailing vessel etc. The  hull  insurance policies are generally issued  for 12 months . The hull policies provide the cover for the hull and machinery  as well as in report of materials and outfit and stores and provision  for the officers and crew . In addition, cover for liabilities is included. The hull policy consists of the basic policy form to which clauses are  attached. The clauses are a known as “ Institute clauses” and are drafted by the institute of London Underwrites which is an association  representing the marine  insurance companies  and Lloyds” underwriting  operating  in London. These clauses  are adopted by the General Insurance Industry in India. The cover is provided by the Institute Times Clauses (Hull) and the risk covered are maritime perils such as fire collision stranding Etc., 

 Additional perils not of a maritime nature are also covered. Some examples are damage to hull caused by latent defect in machinery  accidents in loading or discharging cargo etc., The Institute  Time clauses (Hull ) includes a clauses  known as Running Down Clauses which extends the hull policy  to provide cover to the shipowner in respect of his liability  for damage caused to the another ship in a  collision as a consequence of negligent navigation.  Hull policies are also available to cover (1) loss of freight I.e.,  earnings derivable by a  shipowner for the employment of his a  ship and (2) disbursements I. e , amount spent by him in fitting out the vessel including provisions   and a stores. Hull policies are also issued to cover vessels in course of constructions . These policies are taken by the ship builder . The vessels are insured from the laying of the keel until completion of trails leading to the delivery  of the ship to its owners.  Hull  insurance also includes the following insurances: (1) Inland vessels such as a barges launches, passengers, vessels etc., (2) Dredgers ( merchandised or non-mechanised) .

3) Fishing   vessels  ( merchandised or non-mechanised) . (4) Sailing vessels ( merchandised or

non-merchandised) . (5) Jetties and wharves.    2.   CARGO INSURANCE: Cargo means the good or merchandise  commodities carried in a ship in the course of shipment. When the goods or cargo transported  from the port of the departure of the port of destination, forms the subject  matter of  insurance. This policy  may be arranged for the duration of a voyage or as time policies or open policies or on other basis. As in hull  insurance, the basic cover (I.e . in respect  of maritime perils) is provided by the Standard marine policy. In practice the cover is much the Institute Cargo clauses attached to the policy. However from 31st march 1983, the Lloyd’s  S.G. Policy form the  has been replaced by the a new simplified policy which  contains particulars such as a name of the insured, details of vessels , voyage,  goods insured sum insured,  premium etc.,

 The risks covered under the cargo is  policies  an  are incorporated in the revised institute Cargo clauses (A), (B), and  ( C ).    (1)  INSTITUTE CARGO CLAUSE ( C ): This cover is provided for loss or damage to cargo due to  (a) Fire or explosion, (b) Standing  grounding  sinking of the vessel or craft: ( c )  Overturning or derailment of vehicle . (d) Collision or contract of vessel or conveyance  with an external object  (e) discharge of cargo at port of distress: (f) General average and Salvage charges and  (g) Jettisoning.  (2). institute cargo clauses (B): In additional to the losses covered under clauses ( C ) Sling loss

I, e, total of any package lost or dropped during loading or unloading and (d) entry of sea, lake or river water.  (3)  INSTITUTE CARGO CLAUSE (A): The cover is on a All risks basis and thus covers all physical loss or

SETTLEMENTS OF CLAIMS UNDER MOTOR INSURANCE

 The claims arise under motos insurance are divided  into two classes i.e. claim for own damages  and claims for third liability.  (A) CLAIMS FOR OWN DAMAGES: Own Damages arise which damage to the vehicle  is caused by the insured. These damaged  are generally caused by collision or over running of the vehicle. The settlement of claims for own damage is done in three phases, namely preliminary scrutiny  assessment of loss and settlement.  

 (a) PRELIMINARY SCRUTINY:  Immediately on occurrences of any accident or loss of or  a damage to the vehicle, the  insured has to serve a notice of a loss of the insurer. On receiving  the notice, the insurer will check his records to find out whether policy is in force or discontinued . Later, the loss is entered in claims  register and a claims form is sent to the insured to be filled up by him and to be returned  to the insurer. The insured is asked to give all  relevant   particulars in the claim form such as a date and time of accident cause of accident extent of damage to the vehicle  etc. The insured is also required to submit a detailed  estimate of repairs from any repairer of his choice. The insurer generally accepts the estimates. But at times he  asks for another estimate , Insurer does with this when it doubts the competence  moral hazard or business integrity of repairer first chosen.

  (b) ASSESSMENT: The insurer employs independent  automobile surveyors  to ascertain the cause of the accident and extent of loss sustained by the insured. The surveyors  are supplied a copy of a the policy , the claim form and repairer’s  estimate. They inspect the damage vehicle, discuss the cost of the repair or replacement with repairer and submit their survey report. In case of minor damage claims independent   surveyors is not appointed. The officials  of insurance company or its engineer inspect  and finalise the claim  report. 

 ( C ) SETTLEMENT: The surveyors  report is taken as a basis for settlements of claims. The report is examined  thoroughly  and settlements is made according to the recommendations  in the report. The usual practice is to authorize repairer. The repair receives a later from the insurer. The repairer will be given payment after completion  of repairs. The insured has go to give a satisfactions  note or voucher that he is hundred  percent satisfied with the repairs. In case the cost of repair paid by the insured, the latter can recover the amount from the insurer. For reimbursement of cost of the repair the insured has to produce  the letter receive from the repairer  with the insurer as an evidence for payment of cost of repair. Finally the insurer will pay the claim for cost of repair.

  (B)  CLAIMS  FOR THIRD PARTY LIABILITY: The third party liability arises  when a motor vehicle hurts a third party so as to cause damage to his property or his death or a personal  injury  to him. For settlement claims for third party liability the following procedure is generally adopted:  (1) ENTRY OF NOTICE:  As soon as the notice of claim is received  from any: the insured the third party, or the Motor Accidents Claims Tribunal (MACT)  the same will be entered in Claims Register. Date of intimation, claim number , Policy number data of accident. Vehicle number . MACT  number . Name of Insured, Driver and claimant, amount claimed etc are entered in the Claim Register. Separate sections are maintained in the register for fatal claims and bodily injury  claims

RISK MANAGEMENT AND ITS EVOLUTION

These techniques range from carrying a talisman or a lucky dollar to fortune tellers and star readers and ultimately to the multinational  financial  behemoths of insurance companies. Most business  in the past centuries have transformed some of their risks to insurance companies in exchange for a premium. Insurance companies in their search for  more business and more profits have hired  agents and brokers to sell more of their products  to more clients in exchange for a sizeable commission. It is only when business owners realized that the coast  of this distribution system and its inherent conflict  of interest did not work to their  advantage that the discipline  of risk management  came into its own right. The conflict  of interest comes from the fact that agents and brokers are paid by the insurance companies  to produce sales. Consequently they only solve risk problems through more insurance sales and  then only solve those that are problems.  that fit the available  products  of the insurance company ( ies ) they represent.    Risk management  as a discipline  is an objective look at all the risks a  business faces, evaluating  them, prioritizing them and solving them . For example providing protective footwear to your employees may be a much more practical  and cost effective manner to solve your problem than buying insurance for such risk.

With this realization and the ever increasing  demands from better educate  consumers and employees the business brought the management of their risk In house. They hired and trained professionals  who were on the payroll of the company rather than commission   driven marketing people to handle all aspects of their risks. When the broker industry saw their  business disappear they reacted by consolidating  ferociously  and repositioning  themselves  very often as risk consultants A professional  risk manager should be completely  independent from the insurance industry in order to be able to provide advice  and solutions which are in the best interest  of those they serve. This can be obtained by either bringing  the service  In house or hiring  consultants on a fee for service basis. Any risk manager worth their “Cup Of Tea”  should be able to earth this fee back for their employer client in a short time by improved protection and lower insurance costs.  The risk and insurance management Society based in New York is one of the most prestigious international organizations  in this field advocating the above principles. It celebrated its 50th Anniversary  this year. Their annual convention gathers some 15,000 people active in the international risk management business.

  DEFINATION OF RISK MANAGEMENT:  (1) CUMBRIA COUNTY COUNCIL: “Risk management is a continuous process involving there current cycle of identifying   hazards and that lead to the risks occuring analyzing  the risk of an event and its profiling the risk in a respect of likelihood and impact controlling  the risk through action planning outcomes and monitoring the effectiveness of the control measures.  (ESSENTIALS OF RISK MANAGEMENT: The above definitions have brought to light a few essentials of an effective risk management . They are as a following:  (1) Risk must be identified before they can be measured and only after their impact  has been evaluated  can we decide on the most effective method of control. (2) The method of risk control should be economic . There are is no in spending Rs. 1,00,000 to control a risk which can only cost rs. 50,000, There will always be a point where spending on risk  control has to stop,  (3) The assets of the organization can be physical or human they are both important and risk management  must be seen to have a part to play in a  both . However risks do not strike at a sets but also play earning capacity of the enterprise.  (4) The principle of risk management  are just as applicable in the services sector as they are in the manufacturing  sector
and are of the equal  importance in the public and private sectors of the economy.

BENEFITS OFRISK MANAGEMENT: The following are some of the key gains from risk management “ (1) Reduces losses and costs due to risks. (2) Helps in anticipating problems before they impact a business . (3) Enhance profits.  (4) Eases out uncertainty by proactive systematic methods. (5) Ensures stability and target achievements. (6) Avoids litigation by taking preventive steps. (7) Improves efficiency in the organizations  by weeding out unplanned events and consequent loss of time and money.  (8) Improves  decision  making by understanding and systematic study of volatility and the opportunities  there from.  RISK MANAGEMENT PROCESS: The process risk management  can be broken into five steps, namely:  (1) Setting the objectives of risk management . (2) Risk Identification. (3( Risk Impact analysis-evaluation or estimation (4) Risk Strategy
(a) Risk Reduction and avoidance. (b) Risk transfer. ( C ) Risk retention

PERSONAL PACKAGE INSURANCE

1. HOUSE HOLDER’S INSURANCE: The house holder’s  insurance is a package cover designed to meet various  insurance  requirements of a house holder by combining  under a single  policy a number of contingencies generally  encountered by house holder. This  insurance providers protection for property and interests of the insured and his family members  who permanently reside with the insured. Generally properties like building household goods, jewellery & valuable domestic, electric appliances etc.,.  are covered by this policy. This minimum premium under this policy is Rs. 100.    

  2. PEDAL CYCLE INSURANCE: This  insurance is intended to cover loss of a or a damage to the cycle by fire, lighting , explosion  burglary house breaking theft and accident external means. It also covers the insured’s  legal liability  for bodily  injury to third parties subject to a specified  limit, say Rs. 15,000 . Any loss of a or a damage to rubber tyres , lamps, tools and accessories is covered only if they are lost or damaged in the same accident in which  the insured pedal cycle is also damaged. This policy can be extended to cover personal accident  insurance benefits on payment of additional premium.  

 3. MOBILE PHONE INSURANCE: Under this  insurance the insurer will indemnify  the insured for the loss of or a damage to cellular phone by theft, and burglary, fire, explosion , malicious or accidental damage due to external means, earthquake, flood, storm, electrical, and mechanical breakdown. On payment of additional premium, the cover can be extended  to indemnify insured against fradulent  use of the cellular  phone, following the physical loss of damage to the cellular phone, where such loss is total loss for a time limit of 24 hours, from the time of recording by the cellular operator of first fradulent call subject to a  maximum limit of Rs. 5,000 for any loss or any series of loss in any one period of  insurance. The premium for this extension is normally  charged @ Rs. 50 for any one period of  insurance.   

 4.  BAGGAGE INSURANCE:  This  insurance is damaged  to cover accompanied  baggage during specified journey, which includes  air, sea, rail or travel undertaken by the insured. The risks  covered are burglary  , theft or damage by accidental means. The route of the journey is specified in the policy and the cover is operative only when the insured is travelling  by an accepted mode of the travel on the specified  route. proposal form should be fully completed  as regards description  contents and value of each package. Further, if jewellery, valuable  and items listed in the exclusions  clause are to be covered then full description  and individual  value should be noted.  

 5.  ALL RISKS INSURANCE:  This  insurance grant very wide cover in respect of valuable property  and is normally issued  only to very good clients . Barring a  few perils like Earthquake, War, etc.,  the cover offers very comprehensive  protection  to the insured propertyagainst many perils such a as fire, Riot, & Strike. Terrorist Activity, burglary house breaking , theft, accidental  loss or damage. The following are the special features of this  : (a) The cover is strictly restricted  to personal  jewellery ornaments and other such valuable  which should be specified and separate  value declared against each.  (b) Declaration of full value should be a insisted upon but valued policies should not be a be agreed to.  ( C ) All articles  should be a sufficiently  in detail to permit identification. (d) In case of jewellery studded with pearls, diamond, or other precious , stones, valuation certificate of jewellery with number and detailed  description of the stone’s  should be obtained.  (e) furs and similar costly items, personal belongings  can also be included but articles like fountain  pens, spectacles, clothing  musical, instruments, and silver utensils etc., are not covered under this policy. However if an All Risk policy holder  insists  on coverage for clothing silver articles and the like, this may be agreed to but the policy should be endorsed restricting the cover on such items to Fire & Theft risks only.