Tomislav Skračić, MA Undergraduate English Course for MARI TIME MANAGERS 6th Semester

1. Tomislav Skračić, MAUndergraduate English Course forMARITIME MANAGERS6th Semester Essential reading: • T. Skračić, Waypoint – English Textbook for Maritime Students, Pomorski fakultet, Split 2010, Units 29-33 • T. Trappe & G. Tullis, Intelligent Business, Longman 2005

2. MARINE INSURANCE UNIT 33

3. Glossary: • maritime peril (hazard or risk at sea), insurer / insurance company, shipowner, policy / cover (n.), premium, liability, Lloyd's, underwriters, Protection and Indemnity Clubs (P&I), levy, indemnity, collision, grounding / stranding, total loss, general / particular average, specialist policy, adventure, condition and warranty, salvage and prizes Unit 33

4. Origins of marine insurance • Marine insurance is the oldest type of insurance.The growth of the British Empire, the establishment of Lloyd's of London and competitor insurance companies, as well as a developing infrastructure of specialists such as shipbrokers, admiralty lawyers, and bankers, gave English law a prominence in this area which it largely maintains and forms the basis of almost all modern practice. The growth of the London insurance market led to the standardisation of policies. In 1906 the Marine Insurance Act was passed which codified the previous common law. Unit 33

5. Although the title of the Act refers to marine insurance, the general principles have been applied to all non-life insurance. The Marine Insurance Act included a standard policy (known as the "SG form"). Because each term in the policy had been tested through at least two centuries of practice, the policy was extremely thorough. In 1991, the London market produced a new standard policy known as the MAR 91 form. Unit 33

6. Practice • Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or property by which cargo is transferred, acquired, or held between the points of origin and final destination. Sub-branches of Marine insurance include Cargo insurance, Onshore and Offshore exposed property (container terminals, ports, oil platforms, pipelines); Hull; Marine Casualty; and Marine Liability. Unit 33

7. Insurance of the vessels is generally known as "Hull and Machinery" (H&M). A more restricted form of cover is "Total Loss Only" (TLO), generally used as a reinsurance, which only covers the total loss of the vessel and not any partial loss. Cover may be on either a "voyage" or "time" basis. The "voyage" basis covers transit between the ports set out in the policy; the "time" basis covers a period of time, typically one year, and is more common. Unit 33

8. Protection and Indemnity Clubs • A marine policy typically covered only three-quarter of the insured's liabilities towards third parties. The typical liabilities arise in respect of collision with another ship, and wreck removal (a wreck may serve to block a harbour, for example). In the 19th century, shipowners banded together in mutual underwriting clubs known as Protection and Indemnity Clubs (P&I), to insure the remaining one-quarter liability amongst themselves. Unit 33

9. Protection and Indemnity Clubs • These Clubs are still in existence today and have become the model for other specialised and uncommercial marine and non-marine insurances, for example in relation to oil pollution and nuclear risks. Clubs work on the basis of agreeing to accept a shipowner as a member and levying an initial "call" (premium). Unit 33

10. This type of insurance covers: • Loss of life; • Injury to crew members and others; • Hospitalisation of crewmembers in foreign ports; • Expenses incurred in repatriating crew members who have been hospitalised in foreign ports; • Repatriation of crew members of stranded or lost vessel; • Loss or damage to cargo; • Liabilities for damage to docks, cables (submerged or other), shore installations, navigation aids, bridges and other fixed or movable properties, damage to property of any kind caused by excessive speed in harbour; • Certain types of fines and penalties, and practically all risks not covered by marine insurance companies. Unit 33

11. Marine insurance companies and P&I, known as underwriters, indemnify the shipowner only for damage and losses specified in the policy after the shipowner proves that such damage or loss has occurred. This is determined by surveys, entries in the log, reports and statements submitted by the master. Unit 33

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16. Exercises • Answer the following questions: • What is the Insurance Policy? • What does marine insurance cover? • What are the risks covered by marine insurance? • Explain the difference between "time" and "voyage" covers. • Who are the Underwriters? • What is covered by the P&I Clubs? • Explain the terms hospitalisation and repatriation. • How does the owner prove that the damage or loss has occurred? • Who makes use of reports or statements on the accidents, injuries, etc.? Unit 33

17. Translate into English • Polica osiguranja (insurance policy) je pisani ugovor kojim (whereby) se osiguravatelj, na temelju dogovorene svote (payment) koju nazivamo premija, obvezuje osiguranoj strani nadoknaditi (make good to the insured) svaki gubitak ili štetu nad imovinom obuhvaćenom policom (specified therein). • Velik postotak zahtjeva za odštetu tereta (cargo claims) posljedica je nedostatka ili neadekvatne drvene separacije (dunnage). • Časnik mora napisati izjavu i sačiniti izviješće (make a report) navodeći pravi uzrok štete. Unit 33

18. Država je dopustila privatizaciju brodara (ship operators / shipping companies) poput Jadranskog pomorskog servisa i Brodospasa, ali je Obalna straža s njima sklopila ugovor o javno-privatnom partnerstvu (public-private partnership). • Šteta je bila prouzročena slanom vodom (salt water). • Izjava časnika je izazvala (gave rise to) velike prepirke (disputes). • Sjećate li se havarije (accident) turskog ro-ro broda? • Mučno je bilo gledati kaos i nesnalaženje (disorientation / clumsiness) hrvatskih pomorskih vlasti i nadležnih (competent) ministara u toj kriznoj situaciji. • Luka spasa (port of refuge) je zaklonište. To ne mora biti luka s operativnom obalom (quay) i lukobranom, ali mora biti opremljena sredstvima za prihvat (facilities for accommodation) broda u izvanrednim situacijama. Unit 33

19. Choose some of the elements and make your own sentences • vessel in distress • be appointed by • refer to • be known as • place a claim • without delay • cover the loss • the basis of Unit 33

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