In marine insurance business, losses arise due to various marine perils. Some perils are insured while some perils are not insured. Before we discuss the different types of marine losses, let us first understand the meaning of the term marine perils.
What are Marine Perils?
Marine perils are defined as
the perils consequent on or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils (enemies), pirates, rovers, thieves, captures, seizures, restraints and detainment of princess and peoples, jettison, barratry and other perils, either of the like kind or which may be designed by the policy.
The above said definition discloses the various types of marine perils. They are as follows:
1. Perils of the Sea
They refer to all risks, perils and dangers peculiar to the sea. They include accidents, capture of the ship or its cargo by pirates, losses by collision, etc. A point to note here is that losses caused by perils of the sea cannot be prevented by any reasonable care, skill and diligence on the part of human beings.
Thus, if a ship hits a sunken rock and sinks or collides with another ship and suffers a loss, it is a case of loss by perils of the sea.
Other examples of such loss are:
1. Loss of cargo as a result of sea water entering the ship through a hole made by rats in the bottom of the ship.
2. Loss resulting from negligent navigation, provided it was caused by a peril of the sea.
3. Loss of cargo due to heat produced by the closing of ventilators to prevent the entry of sea water on rough weather.
Fire is one of the most common perils of the sea and the underwriter is liable for loss caused by it. Though every type of fire is not covered by the policy, damage caused by smoke or by the heat of fire or damage by water used to put out or prevent the spread of fire or fire resulting from lightning, spontaneous combustion, explosion, negligence of the master or crew etc., are covered by the policy.
If the loss is caused by the wilful misconduct of the insured or the fire takes place on account of the inherent vice or nature of the subject matter insured, the insurer is not responsible. It is to be remembered that certain losses on account of perils of fire not covered by the standard form can be covered by having special clauses and paying the extra charges.
Enemy literally means
one who tries or wishes to harm or attack or one who has ill feeling or hatred towards another.
It includes all damages or losses sustained owing to the hostile acts of an enemy. Enemies include all types of ships belonging to the foe or enemy countries and to their hostile acts, provided such acts formed part of the enemy campaign.
Jettisoning is the voluntary and intentional throwing overboard or away a part of the cargo or part of vessel’s equipment for the purpose of lightening or relieving the ship in case of necessity or emergency to have a safe adventure or voyage.
If the cargo or any other thing is thrown overboard accidentally or fortuitously, then it does not constitute jettison. It should, however, be remembered that no jettison of cargo owing to its inherent vice is covered by the policy.
For example, the jettison of fruits which have become rotten on account of delay or of hemp shipped in an improper condition which as a result has become dangerously heated, is not covered.
It refers to every wrongful act willfully committed by the master or crew to the prejudice of the owner without the connivance of the owner.
L.J.Scruttion defines barratry as
any wilful act or wrong doing by the master against ship and goods even though with the intention of benefiting shipowner. Barratry of marines include fraud or crime causing loss or damage to goods committed under circumstances that would not be prevented with the shipowner. Negligence even amounting to recklessness or carelessness will not consistent barratry: there must be an intention to injure vessel or goods
Instances of barratry include running or making away with the ship, willfully carrying her out of the nominated course, sinking or deserting her, embezzling the cargo, smuggling or any other act by which vessel or cargo is subjected to arrest, detention, loss or forfeiture. In the case of ‘Scuttling’, connivance of the owner does not constitute barratry.
It refers to vessels authorized and maintained by nations for the purpose of defense or attack in the event of hostilities and the loss arising out of collision against a man-of-war is covered in a policy.
7. Pirates, Rovers, Thieves
In the olden days, when means of communications and transport were not so developed, the perils on account of pirates (it means sea robbers but it includes passengers of the ship who rise in revolt or those who attack the ship from the shore), rovers (wanderers and pirates on the high seas), and thieves (robbers using force for violence and not clandestine thieves or pilferers or pickpockets from among the passengers or crew) were very common.
The acts by those persons are committed for the pursuit of private ends by robbery or marauders plundering indiscriminately in places beyond the jurisdiction of a state. In the modern time, however these cases are rare.
The prevention to free use of a port by the government of the country is known as restraint. It may cause interruption and possible loss of voyages involving such ports and sacrifice of cargo.
It covers losses due to detention of a vessel and its cargo by blockage or possibly quarantine regulation or other interference by the police of a nation while a vessel is in port. It does not cover losses which are the result merely of delay or interruption of the voyage or loss of market or some other remote result.
It means forcibly taking away of the vessel and refers to political or executive acts.
11. Letter of Mart
It means power granted by a state government to individual citizen who undertakes to attack an enemies merchant ship in revenge for losses where they had themselves suffered.
12. Letter of counter mart
It refers to the power granted by the opposing nation to other persons to resist and retaliate such attacks.
13. Taking at sea
It refers to stopping and taking into port a ship for examination in the event of any suspicion of carrying contraband goods.
14. All other perils
The term by the principle of ejusdem generis is intended to include perils of a like nature. The term does not mean all risks or even all marine risks. Smoke will be ejusdem generis with fire; sweat arising out of heavy weather would be peril of the seas and hence ice formed from sea water is ejusdem generis with it and damage caused by contact with it will be covered.
Fresh water is not a peril of the seas and so neither rain nor fresh water, condensation as a proximate cause of loss are perils embraced within the standard basic policy. If condensation is as sequel to closure of hatches forced by heavy seas, then it would become a peril of the seas.