Insurable Interest of Insured in
(like
Marine Insurance (Sec 102-108)
Marine insurance is invalid unless supported by
an insurable interest
A. INSURABLE INTEREST OF OWNER OF A SHIP
A1. In the vessel: The insurable Interest is
commonly possessed by the owner, and also if
money has been borrowed, by one who hold
mortgage on the vessel. One who lesses a vessel
may agree to assume responsibility for its
insurance, in which he has an insurable interest.
A2. In the Freightage:
Freightage (also called freight) signifies all
the benefits derived by the power either from the
chartering of the ship or its employment for the
carriage of his own goods it those of others
(sec104).
Sources of Freightage:
1. The chartering of the ship
2. Its employment for the carriageof his
own goods and
3. Its employment for the carriage o the
goods of others
B. INSURABLE INTEREST OF THE SHIPPER OF
CONSIGNEE:
His interest over the goods is based on the
perfected contract of sale between him and the
shipper of the goods which operates to vest in him
an equitable title even before delivery or before he
performed the conditions of the sale.
Common terms of Sale:
FOB (Free on Board)
FOB factory- The buyer assumes responsibility
when the goods leave the factory
FOB point of destination- The buyer does not
assume responsibility until the goods are
received from the carrier
CIF ( cost, insurance and freight)- The seller
assumes complete responsibility for
securing all necessary insurance; and
C and F( cost and freight)- The buyer
procures his own insurance
C. INSURABLE INTEREST IN EXPECTED PROFITS:
One who has an interest in the thing from
which profits are expected to proceed has an
insurable interest in the profits (sec107)
C1. Interest in the thing involved based on
some legal right- The owner of the cargo
to be carried on a trading voyage has an
insurable interest not only on the value of
the cargo but also on the expected profits
from the sale off the cargo which is liable
to be affected by the perils of the sea.
the commission to an agent or consignee)
C2. Interest in the thing involved based on
a valuable consideration- The insured has
sufficient interest if it is based on a
valuable consideration paid.
D. INSURABLE INTEREST OF THE CHARTERER :
One who charters a vessel, with a
stipulation to pay its value in case of loss has
an insurable interest to the extent of its value
Also, in the profits he expects to earn
by carrying the goods in excess of the amount
he agreed pay for the charterer of the vessel.
Charter Party is a contract by which an
entire ship or some principal part thereof is
lent by the owner to another person for a
specified time or use.
Types of Charter Parties:
1. Bareboat or demise charter: The
charterer becomes the owner of the
vessel for the voyage or service
stipulated, subject to liability for
damages caused by negligence.
2. Contract of Affreightment: The owner
of the vessel leases part or all of its
space to haul goods for others. It is a
contract of special service to be
rendered by the owner of the vessel
who retains the possession, command
and navigation of the ship, the
charterer or freighter merely having
use of the space in the vessel in return
for the payment.
2a. Voyage charter or trip charter- A
contract for the carriage of goods, from
one or more ports of loading to one or
more ports of unloading, on one or on
a series of voyages. The master and
crew remain in the employ of the
owner of the vessel
2b. Time charter- Use of the vessel for
a specified period, the owner of the
vessel retains possession and control
through the master and crew who
remains his employees.