Showing posts with label insurance. Show all posts
Showing posts with label insurance. Show all posts

Friday, 21 March 2014

Time Charter in Shipping




Time Charter in Shipping is usually restored to when the charterer desires to operate a vessel for a period of time without undertaking either the financial commitments of ownership or responsibilities of navigation and management of the vessel.

Point of difference between time charter and voyage charter is the basis of calculating hire or freight . In the case of voyage charter freight is paid on the cargo carried and is directly proportionate to the volume of the cargo. In the case of time charter, the volume of cargo has no relation to the charter hire which is fixed on the basis of carrying capacity of the vessel and is directly proportionate to the period of charter .

Followings are the clauses contained in the time charter party usually related to :-

-----  Description of the vessel name, flag, ownership, class, gross and net registered tonnage, cargo capacity, indicated horse power and speed, bunker consumption, etc.

-----  Rate of cahrter hire and mode of payment.

-----  Charter period and redelivery of the vessel.

-----  The charterer's right to direct the vessel in regard to the voyage it shall perform and the cargo it shall carry.

-----  Allocation of operating cost - The owner has to pay running expenses like wages, provisions, insurance, stores etc. and charterer has to pay other expenses like bunker and waters, port charge , canal passing charge etc.

-----  Owner's indemnity against liability incurred under bill of lading.

-----  Liability for damage to the vessel - while the owner is responsible for maintaining the vessel in an efficient  state during the currency of the charter and has therefore to assume responsibility for any damage sustained in connection with navigation, the charterer is to be responsible for any loss or damage caused to the vessel or owners by improper loading or unloading of goods or any negligent act on the part of the charterer or his servant.

-----  Off-hire or suspension of hire during period of inefficiency of the vessel.



Wednesday, 19 March 2014

Bare Boat Charter

 Two container ships pass in San Francisco Bay


Bare Boat Charter is also known as Demise Charter. This is a type of contract under which the owner provides the service of vessel to the Charterer for a period of time in return for charter hire. For all practical purpose, charterer acts as the owner of the vessel during the period of charter but without undertaking the financial commitments of ownership.

The Bare Boat Charter party commonly used is the standard "Barecon" charter party. The charter party usually contains clauses relating to;

1)  Description of vessel - such as size, speed, fuel consumption, loading capacity etc. on which the performance will be depend.

2)  Survey to be carried out on delivery and re-delivery.

3)  Inventories of stores to be taken on delivery and re-delivery.

4)  Charter period - usually a provision of included giving the charterer the option of extending the validity of the charter by a specified period.

5)  Rate of charter hire and mode of payment. This is usually computed on the deadweight tonnage of the vessel per month and is payable every month in advance.

6)  Maintenance and operation during period of charter - The vessel to be at the disposal and under the complete control of the charterer who will be responsible, for supply of crew officers, stores, provisions, bunkers etc. and for all other items of operational costs including insurance. 

Sometimes, Bare Boat Charter serves as "hire/purchase" contract .

Under such a contract , the owner/seller retains formal ownership and thereby security in the vessel until the full purchase price is paid .



Thursday, 6 March 2014

Implied Warranties in Marine Adventure

 Two container ships pass in San Francisco Bay


In order to make the underwriter liable under a contract of marine insurance or cargo insurance , there are certain preliminary essential conditions which must be complied with though not expressed in clear ords . These terms are implied warranties basically these are two :-

A)  -----  Implied warranties of seaworthiness :-
             
                It implies that the ship , by which the particular kind of cargo is transported , is fit to carry the particular cargo . For instance , if is frozen meat , then the refrigerating machinery, holds etc. must be in proper order . Actually for a proper cargo all supporting  machinery and others have to be in a good condition and seaworthy , but there are is not implied warranty that the goods are seaworthy .

b)  -----  Marin adventure in all respect to be lawful activity :-

              It implies that an insurance of unenforceable if it is respect to a marine adventure which has declared illegal according to the law of land where the contract was effected . 

              If any policy has been taken for in any of the cargoes forbidden to be exported from India , the insurance companies are at liberty to avoid the contract on the basis of breach of implied warranty of legality through the trading in the countries of Africa for these items may be legal . 



What Constitutes Material Circumstance

 Two container ships pass in San Francisco Bay


The term "Circumstance" includes any communication made or information received by the assured . Every circumstance is deemed to be material which would influence the judgment of an insurer in determining the risk of fixing the premium . The assured is under obligation to tell every material fact and the change in circumstance , if any , to the insurer . Further if the assured is asked a question whether a material fact or not , by the underwriter , he must answered it truly otherwise it may vitiate the policy . However , the following circumstances need not be disclosed :-

a)  -----  Any circumstance which diminishes the risk .

b)  -----  Any circumstance as to which information has been waived of by the insurer while taking the risk.

c)  -----  Any circumstance which is known or presumed to be known to the insurer in ordinary course of the business ;
    Matters presumed to be known by underwriter are the matters falling in the category of trade usages such as routes being adopted by the ship , methods of loading , discharge, stowage, packing of cargo and general nature of cargo .
    For instance the chemicals are not to be carried as less than container load cargo (LCL) with goods for human consumptions or edible quality . These need not be communicated .

d)  -----  Matters not affecting the risk .

e)  -----  Excessive valuation of cargo must be communicated to the underwriter but an insurance for an excessive sum under the unvalued policy would not be necessary  to be disclosed because in case of loss of the consignment the assured would be entitled to recover only the true value of goods, i.e. the insurable value.



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