Answer
The principles of marine insurance are the fundamental rules on which a marine insurance contract is based.
For MEO Class 1 oral, remember these 6 main principles:
- Utmost Good Faith – Uberrimae Fidei
Both insurer and insured must disclose all material facts honestly. Any material concealment or misrepresentation can affect the insurance contract. - Insurable Interest
The insured must have a financial or legal interest in the subject matter insured and must stand to suffer a loss if it is damaged or lost.
Example: shipowner has insurable interest in the ship; cargo owner in cargo. - Indemnity
Marine insurance aims to put the insured, as far as money can, in the same financial position as before the loss. It is not meant to provide profit from a casualty. - Subrogation
After paying the insured loss, the insurer acquires the insured's right to recover from a third party responsible for that loss.
Example: cargo damaged because of a terminal contractor's negligence; insurer pays cargo owner and may recover from the contractor. - Contribution
If the same interest and risk are insured with more than one insurer, the insurers share the loss in their proper proportions. The insured cannot recover more than the actual loss. - Proximate Cause – Causa Proxima
The insurer determines the dominant, effective cause of the loss to decide whether the loss resulted from an insured peril.
It does not simply mean the last event in time.