The structure of marine insurance

Marine insurance is the way to cover vessels or cargoes in case of loss or damage from the port of origin until the destination. Marine insurance is a kind of insurance developed in maritime sector. The first types of marine insurance contracts were born in Genoa and other countries of Italy around the XVI century.

During the 19th century Lloyd’s London and the Institute of London have developed standard clauses to use in marine insurance also called the Institute Clauses. Marine insurance is often grouped with Aviation and Transit risks, and known with the acronym MAT. The Marine Insurance Act includes a standard policy called SG. In 1991, the London market produced a new kind of standard policy called Mar 91 with the Institute Clauses. The MAR 91 form is a general statement of insurance; the Institute Clauses are used to set out the detail of the insurance cover.

Lloyd’s of London is composed from names that are making their own wealth at risk to underwrite insurance cover. They provide cover for vessels, platforms and aircraft. Hull and Machinery policy is a kind of limited cover in case of explosion, fire contact with land conveyances, aircraft, salvage, general average, constructive total loss, total loss, partial collision liability and with additional premium limited cover for bursting of boilers and braking of shafts. All forms of hull cover have to be decided from an insurance broker.

Protection and indemnity association provide a cover to loss of life, pollution and the risk of cargo for ship-owners.

In other forms of insurance to cover vessels can be included war risk Strike and Freight defense. The underwriters are all liable together, but only for their proportion of the risk. If one underwriter should default, the others are not responsible to pick his share of the claim. Cover could be based for voyages and time.

Definition of a P&I club

This is an association of ship-owners who are together to insure each other on a mutual non- profit-making basis, for their third-party liabilities.

Mutual association

The P&L club is formed from ship-owners which are competitors in the business but they understood that it was more advantageous to cooperate together for insurance purposes. Currently the members of P&L are international and different languages culture religion won’t divided their cooperation because they are sharing the same risks and liabilities. In other words they are different people but with the same status and same objectives. Moreover would be better if all the members of the P&L club have the same type of ship, same size, age, cargoes, involved in the same trade, with the same crew. Every ship