by Loss and abandonment refer to the circumstances under which the policyholder can claim compensation for the loss of the subject matter of the insurance policy.
Loss:
Loss is the damage or destruction of the subject matter of the policy, such as the cargo or the vessel. In marine insurance, the policyholder can claim compensation for the loss of the subject matter of the policy if the loss is due to a peril or risk that is covered under the policy. The policyholder must provide proof of the loss, including the cause and extent of the damage, in order to make a claim.
Abandonment:
Abandonment is the act of surrendering the subject matter of the policy to the insurer in exchange for a total loss settlement. In marine insurance, the policyholder can abandon the subject matter of the policy if it is damaged to the extent that it is no longer economically viable to repair or salvage it. The policyholder must provide proof of the damage and the estimated cost of repair or salvage in order to make an abandonment claim.
The following are some of the common types of losses and abandonment in marine insurance:
- Total Loss: A total loss occurs when the subject matter of the policy is completely destroyed or lost, such as a vessel sinking or a cargo being destroyed by fire. In this case, the policyholder can claim for the full value of the subject matter of the policy.
- Constructive Total Loss: A constructive total loss occurs when the subject matter of the policy is damaged to the extent that it is no longer economically viable to repair or salvage it. In this case, the policyholder can abandon the subject matter of the policy and claim for the full value of the subject matter, minus any salvage value.
- Partial Loss: A partial loss occurs when the subject matter of the policy is damaged but not completely destroyed, such as a vessel being damaged by a storm or a cargo being partially damaged by water. In this case, the policyholder can claim for the cost of repairs or the reduction in value of the subject matter.
- Salvage: Salvage refers to the recovery of the subject matter of the policy after a loss has occurred. Salvage can be either voluntary or contractual, depending on the circumstances of the loss. The policyholder may be entitled to a portion of the salvage value if the subject matter of the policy is recovered.
In all cases of loss or abandonment, the policyholder must provide proof of the damage or loss and must follow the procedures and requirements set out in the policy in order to make a valid claim. The insurer will then evaluate the claim and determine the appropriate compensation to be paid to the policyholder.
Marine losses can be minimized by taking certain precautionary measures. Here are some ways to minimize the risk of marine losses:
- Proper maintenance of vessels: Regular maintenance of vessels can help prevent breakdowns, malfunctions, and accidents that can result in losses. Vessels should be inspected and repaired on a regular basis, and safety equipment should be checked and maintained to ensure that it is in good working order.
- Training and certification of crew members: Crew members should be properly trained and certified to operate vessels and handle cargo. This can help prevent accidents and reduce the risk of losses.
- Proper packing and handling of cargo: Cargo should be properly packed and handled to minimize the risk of damage or loss. Cargo should be loaded and secured properly to prevent shifting or damage during transit.
- Compliance with safety regulations: Vessels should comply with safety regulations and international standards to ensure safe navigation and prevent accidents.
- Purchase of adequate insurance coverage: Marine insurance coverage can help mitigate the financial impact of losses. Policyholders should purchase adequate insurance coverage that provides comprehensive protection against various types of marine losses.
There are several insurance providers in India that offer marine insurance policies. Some of the popular marine insurance providers in India include:
- The New India Assurance Co. Ltd.
- National Insurance Company Ltd.
- United India Insurance Company Ltd.
- Oriental Insurance Company Ltd.
- HDFC Ergo General Insurance Co. Ltd.
- ICICI Lombard General Insurance Co. Ltd.
- Bajaj Allianz General Insurance Co. Ltd.
- Tata AIG General Insurance Co. Ltd.
- IFFCO Tokio General Insurance Co. Ltd.
- SBI General Insurance Co. Ltd.
These insurance providers offer various types of marine insurance policies, such as hull insurance, cargo insurance, liability insurance, and marine contractors insurance, among others. Policyholders can choose the policy that suits their specific requirements and purchase the insurance coverage from their preferred provider.
