Marine insurance has been defined as a contract between the insurer and insured in which insurer agrees to pay an agreed amount to the insured against marine losses. Marine insurance covers transportation of goods by ship, rail, road, air & couriers.

 ‘peril of the sea’ covers damages to ship during the voyage by the Acts of God. It includes those accidents or casualties which do not happen due to the free will of a human being. Even if we talk about natural perils, it will not include the natural and ordinary action of wind. 

Perils of the Sea refers to extraordinary forces of nature that maritime ventures might encounter in the course of a voyage. The term ‘perils of the sea’ used in marine policy do not include every casualty, which may occur to the subject matter of the insurance on the sea. It means perils of the sea include those accidents or casualties which do not happen due to the free will of a human being. Some examples of these perils include stranding, sinking, collision, heavy wave action, and high windsBroadly speaking, ‘peril of the sea’ is defined to cover everything that happens to ship during the voyage by the Acts of God. To sum up, perils of the sea mean everything which happens to the vessel during the voyage by the Act of God without any intervention of a human.

Further, ‘perils of the sea’ in marine insurance comprise of losses only to goods which are on board that happens due to some irresistible force or natural cause or from the overwhelming power which is beyond the human skill and prudence. It includes only the casualties that result from the violent action of the elements as distinguished from the silent natural and gradual action of the elements upon the vessel itself. Thus the insurer will be liable only if the loss or damage is the proximate result of the fortuitous accident of the sea, e.g., the action of storm, cyclone, and waves, etc. Here are some of the instances which are covered under perils of the sea are-

• Foundering at Sea: If a ship is found to be missing for a duration of time and there is no news about the missing ship, it would be considered as foundering at sea. Here, the loss would be assumed as caused by the perils of the sea.
• Ship wreckage: In a case where the ship collides against a hill or rock and is driven to the shore by the violent winds, it would be considered as a shipwreck.
• Stranding: In a situation where a ship got out of action after an accident and struck up in a shallow region of sands, it would be called stranding.
• Collision: In a case, where the ship collides with another ship, it will be considered as a collision.

OTHER PERILS INSURED IN A MARINE POLICY.

1. Perils of Sea

Under the perils of the sea, the ordinary action of the winds and waves, ordinary wear and tear to the vessel, the inherent risk of the cargo is not included. The underwriter may be liable for losses caused by Perils of the sea; he is not necessarily liable for perils on the sea.

Perils of the sea refer to fortuitous accidents or casualties of the sea. Suppose the loss arising out of any of the perils of the sea insured is attributable to the fraud or willful misconduct of the assured. In that case, the underwriter is acquitted from the liability under the policy.

2. Fire

In olden times fire was the biggest maritime peril, but recently it has been under control to a greater extent. Damage resulting from fire and smoke is included under fire-peril. The water used for extinguishing a fire may cause damage to the insured goods. So, this peril is also insurable. The damage due to spontaneous combustion may be maritime peril and be insured against.

Damage was done due to the lightning, explosion, and fire originating from the negligence of the crew are recoverable from underwriters. The losses which are not included in the standard policy can be covered by having special clauses and paying an extra premium.

3. Man-of-War

This is the vessel that is authorized by nations for the purpose of defense or attack in the event of hostilities. Any damage to the goods or ships arising out of collision against a man-of-war is insurable.

4. Enemies

Tile ships belonging to the foe (enemy) may cause loss to the insured and is re-underwritten by the marine policy. This policy extends to all the persons of the enemy country and to their hostile acts provided such acts form part of the enemy’s actions.

5. Pirates, Rovers, Thieves

The perils on account of pirates, rovers, and thieves were common in olden times, but they have been reduced considerably. These acts are generally committed to pursuing individual gain by persons beyond the jurisdiction of a state. The ter’ ‘thiev’s’ does not mean clandestine theft or theft committed by any crew, officers, or passengers.

6. Jettison

Jettison means voluntary throwing away of the cargo or part of vevessel’s equipment for lightning or relieving the ship for the common safety.

• The aim of intentionally throwing away the goods or property is to relieve the vessel from some imminent peril.
• The accidental falling of things does not constitute a jettison.
• Own inherent-vice of cargo is also not included in the jettison.

7. Barratry

Barratry includes every wrongful act willfully committed by the master or crew the prejudice of the owner. The act of barratry must be committed without the knowledge of the owner.

The theft, then setting fire to ship, fraudulent selling of vessel and cargo without the connivance of the ship-owner are the various examples of the barratry. The insurer, if barratry insured, is liable for losses arising out of barratry.

8. Restraints and Detainments

The preventions free use of a port by the government of the country is called restraints. It may cause interruption and possible loss of voyages involving such ports and sacrifice of cargo.

The te’m ‘detainme’ts’ covers losses resulting from the detention of a vessel and its cargo by blockage or possibly quarantine regulation or other interference by the police power of a nation while a vessel is in port. It does not cover losses that result merely from delay or interruption of the voyage, or loss of market or some other remote result.

9. The Free of Capture and Seizure Clause (F.C. & S. Clause)

The policy generally covers war perils. But, to include the perils of the sudden declaration of war, the war clause or free of capture and seizure clause is added to relieve war perils. By deletion of this clause, the policy is automatically restored to its original condition and adequate premiums are charged for the purpose.

10. Explosion

The risk of the explosion has greatly increased. The explosion on board a vessel damaging hull or cargo or both could be constructed as peril on the sea, and an explosion onshore might damage a ship or its cargo.

Marine cargo policies were amended to include the risk of explosions not clearly caused by war perils. In case of hull policies, the explosion ‘on shipboard or elsewhere’ is covered in the amended “Inchmaree or Negligence clause”.

11. Strikes, Riots, and Civil Commotion Clause

The marine insurance on cargo is extended to cover from warehouse to warehouse or otherwise insures the goods on shore prior to shipment and after discharge; the danger of underwriters being held liable for losses, resulting from the unlawful acts of strikers from riots or civil commotions is materially enhanced. The insurers are unwilling to assume liability for losses due to unlawful acts.

12. All Other Perils

The loss occurred by the saltwater of the sea, action of worms on timber, cattle dying due to wanting of fodder as a result of lengthy voyage constitute sea perils. Other damages may be due to oil, sweat, and heat, which are insured under other perils.

CONCLUSION

perils that are peculiar to the sea but are of such an extraordinary nature and power that one cannot guard against them using ordinary skill and prudence the insurance company denied that such waves in that region were perils of the sea.Some examples of these perils include stranding, sinking, collision, heavy wave action, and high winds.