Marine Insurance Policies for Cargo and Vessels
A marine insurance contract is not considered legally valid evidence of insurance coverage unless its terms and conditions are incorporated into a formal marine insurance policy. This incorporation may occur at the time the contract is concluded or subsequently. A valid marine insurance policy must contain essential details, including the name of the insurer, the subject matter insured, the type of insurance coverage, the insured amount, and the identity of the policyholder or the person acting on behalf of the policyholder in concluding the insurance contract.
General and Specific Conditions in Marine Insurance Policies
Execution and Signature of the Insurance Policy
A marine insurance policy must be signed by the insurer or by a duly authorized representative acting on behalf of the insurer. In certain jurisdictions, the insurer’s official corporate seal may be accepted as sufficient authorization.
Where insurance coverage is jointly provided by two or more insurers, each insurance agreement is generally considered a separate contract between the insured party and each participating insurer unless otherwise agreed. In marine insurance policies issued through Lloyd’s underwriting market, a single policy document may cover all participating insurers. Such policies list all participating insurers, together with their respective coverage percentages.
Insurance companies that are members of the London insurance market often follow administrative procedures similar to Lloyd’s underwriting practices. Policies executed through these associations are circulated among participating insurers on a regular basis. In some cases, where an insurance broker determines that the entire risk is covered by a specific insurer, the policy may be issued on the insurer’s documentation. For insurers that are not members of such associations, policies are typically issued independently using the insurer’s own documentation.
Stamp Duties and Legal Validity of Marine Insurance Policies
Historically, marine insurance policies were required to include tax stamp duties as a condition of legal validity. The value of such stamp duties was calculated based on the insured amount. However, legislative reforms in certain jurisdictions, including the United Kingdom under the Finance Act of 1959, eliminated mandatory stamp duty for most insurance policies, except life insurance. As a result, the primary legal requirement for the validity of marine insurance policies is compliance with applicable marine insurance legislation rather than payment of stamp duties.
Assignment of Marine Insurance Interests
Assignment of rights and benefits arising from marine insurance policies is an important legal concept. An assignment may occur when the insured property or associated financial interest is transferred to another party, either through commercial transactions or legal processes. In such cases, the rights under the insurance policy may also be transferred to the new beneficiary, subject to the policy’s terms and applicable law. This issue frequently arises in relationships involving policyholders, insurers, financial institutions, cargo owners, and third-party beneficiaries.
Frequently Asked Questions About Marine Insurance Policies for Cargo and Vessels
A marine insurance policy is a formal legal document that confirms insurance coverage for cargo or vessels. It must include the name of the insurer, subject of insurance, type of coverage, insured amount, and identification of the policyholder or authorized representative.
Marine insurance policies must be signed by the insurer or by a legally authorized representative acting on the insurer’s behalf. In some jurisdictions, a corporate seal may satisfy this requirement.
When multiple insurers share insurance coverage, each insurer typically enters into a separate contractual relationship with the insured party. In Lloyd’s market practices, a single insurance policy may cover all participating insurers, with each insurer’s share of coverage specified.
Stamp duty was historically required in certain jurisdictions, but legislative reforms have eliminated this requirement in many countries. Legal validity of marine insurance policies now depends primarily on compliance with applicable insurance laws.
Assignment refers to the transfer of rights or benefits arising from a marine insurance policy to another party. This transfer may occur through commercial transactions or legal processes and affects the relationship between insurers, insured parties, and third-party beneficiaries. What is a marine insurance policy, and what information must it include?
Who is authorized to sign a marine insurance policy?
How are joint marine insurance policies issued?
Is stamp duty required for marine insurance policies?
What does assignment mean in marine insurance?
