The value of many shipments depends upon fluctuations in the currency rates, freight, handling charges, and other expenses. By means of insurance protection will be provided to goods from any uncontrollable variables. A contract of Marine Insurance is defined by section 7 of the Marine Insurance Act of 1909 as: "A contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure." The purpose of marine insurance is to provide protection against financial loss for an amount, which is as close as possible to the actual loss recognized. Marine insurance is a contract by which one party for a specified consideration promises to pay another party a sum of money on the loss of goods that are subject to marine transport. Therefore marine insurance is a contract of indemnity, which is a contract of reimbursement, and the amount redeemable is measured by the extent of the assured's or the insured's financial loss. The terms and conditions of the contract entered into with the insurer determine the amount of reimbursement that is to be received by the insured.
A contract of marine insurance is embodied in a policy, which specifies:
"1- The name of the insured, or of some person who effects the insurance on his behalf.
2- The subject matter insured and the risk insured against.
3- The voyage, or period of time, or both, as the case may be, covered by the insurance.
4- The sum or sums insured.
5- The names of the insurers."
The promissor in an insurance contract is called the insurer or underwriter, the person to whom the promise is made is the insured, assured or the policyholder and finally the contract is referred as the policy.
In order to avoid these situations marine cargo insurance has different coverage for different purposes....