Effecting Marine Insurance market

The usual method of effecting marine insurance is for the proposer to approach the insurance company either directly or through an intermediary who could either be an insurance agent or a broker.

Both of them have a duty to disclose all material facts to the insurer and failure to do so would enable the insurer to avoid the contract.  The intermediary is remunerated by way of commission on premium, the maximum of which is prescribed in the Insurance Act.

 The parties to the contract are the assured and the assurer, while the policy is the document that evidences the contract. In marine insurance before the policy is issued, detail of the proposed insurance is obtained from the proposer in a form called the Declaration form.

However, if full details of the shipment are not immediately available, a temporary cover may be issued pending the ultimate issue of a policy when the full details of shipment become available.

A contract of sale involves mainly a seller and a buyer apart from other associated parties like carriers, banks, clearing and forwarding agents. The question as to who is responsible for effecting insurance on the goods, which are subject for sale, depends on the terms of the sale agreement. The principle types of sale contracts, in so far as marine insurance is directly concerned are the subject of the international contracts of sale(INCOTERMS)