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What are the types of insurable interest in marine insurance

QuestionsCategory: Directors & Officers Liability InsuranceWhat are the types of insurable interest in marine insurance
default avatarPlan Cover Staff asked 2 years ago
1 Answers

Best Answer

default avatarSrinivasan Mahadevan answered 2 years ago
Insurable Interest is one the most important principles in any contract or policy of Insurance. The Nature and the time at which the Marine Insurance has to be present in order for the insured to successfully claim his insurance depends on the principle of insurable interest. 
The insurable interest principle requires that the person who holds an insurance policy have some significant interest in the continued existence of the person or property insured by the policy.  In other words, one cannot take out a life insurance policy for a stranger, nor can anyone take out a fire insurance policy for someone else’s house or property.  Only if a person has ownership over a particular subject matter, will he be said to have interest over that subject matter and thereby be able to take out insurance on it. 
Marine Transit Insurance covers the accidental damage or theft of goods transported by various mode including: sea, air, or by land. The coverage under this insurance policy typically includes loss of or damage to goods caused by fire, theft, sinking, or any natural disasters (Act of God perils). 
The nature of the insurable interest in marine insurance must be such that the interest must be a right in property which is the subject matter of the marine insurance which can include the vessel at sea, the cargo on board and the passengers in transit. 
In marine insurance, there must be a physical object exposed to any perils and that the insured must have a valid legal relationship to the object ( cargo), and upon any loss or damage happening to the object, the insured will suffer a loss/liability. Hence the insurable interest in marine insurance should exist at the time of loss, although it may not have existed when the insurance was affected.  If the assured had no interest at the time of the loss, he cannot acquire interest.  Whereas in fire and accident insurance an insurable interest must exist both at inception of the contract and at the time of loss.