How Come Marine Cargo Underwriters End Up Paying More Than the Sum Insured or `Agreed Value' Under Marine Voyage Policy, at Times? Cargo consignments moving on high seas encounter series of casualties. The accumulated liability might eventually add on to the amount payable under the policy and hence the liability of marine insurers, in few cases exceeds the sum assured of the policy or the `agreed value' unlike in other classes of insurance.

During the course of a national seminar on Marine Insurance, the above interesting question emerged for discussion when Hari Prasad,^# the Representative Executive of one of the leading public sector non-life insurers,^# while making passing reference to peculiar features of marine contracts, cited few live cases to prove his point on the issue.

Goods whilst in transit or whilst in the custody of any carrier (ship/rail/road vehicle/aircraft) from one place to other, within a country or across the countries, are prone to physical loss or damage due to any unforeseen, sudden, fortuitous and accidental occurrence, thereby causing financial loss to the owner of the goods. Thus, the need for insurance protection for goods/cargo in transit arises.

A contract of marine insurance is a contract whereby an insurer undertakes to indemnify the insured losses that are incidental to a marine adventure, including losses arising from a land or air peril, incidental to such an adventure, if they are provided for in the contract. The scope of cover granted under marine cargo policy is specified in the printed clauses attached to the policy, such as Institute Cargo clauses, in case of consignments moving on overseas voyage. Under various sub-clauses, such as general average clause, forwarding charges clause and duty of assured clause, that are incorporated in the said main clauses—attached to and forming part of the policy—conditional and supplementary contractual liability is created on the marine underwriters.

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