Types Of Marine Insurance Claims.

Hello and welcome to my blog today.
There are various types of marine claims needed to be considered briefly for the purpose of this post. Section 56(1) of the marine insurance Act 1906 defines loss on marine as either partial or total. Total loss is defined by section 56(2) of the marine insurance Act 1906 as either actual or constructive.

Actual Total Loss.
Actual total loss may be considered in one of the three (3) ways:
• Where the subject matter is destroyed for e.g vessel sunk in deep water, ship being destroyed.

• Where the subject matter cease to be a thing of the kind insured. This is also known as loss of specie, for e.g cement so damaged by sea water as to become concrete.

• Where the assured is irretrivably deprived of the subject matter. This means in effect that destruction is not essential to a claim for actual total loss. The assured to have suffered an actual total loss where for instance gold of which the owner, is in a sunken vessel two miles in the ocean , just as much as the owner of the ship itself in which the gold rest. Further, when a ship fails to arrive at her port of destination and no news or is received or available concerning her after a reasonable period of time, she is presumed to have foundered at sea, and the insurers become liable as for loss by peril of the sea.

Constructive total/ commercial total loss.
The marine insurance Act 1906 defined constructive total loss as where the subject matter is reasonably abandoned on account of its actual total loss appearing to be unavoidable or because it could not be preserved from actual total loss without an expenditure had been incurred. The three example given blow may clarify the situation:
• A vessel and/or cargo is captured or seized, although may be released eventually but most likely to be condemned by a prize court.

• Cargo in a vessel which has gone aground remains intact but the cost recovering it would exceed the value when recovered.

• A ship runs ashore, remains in specie but the cost of refloating her would exceed her value when refloated.

The assured may be in the light of the above consider that a total loss is inevitable and could decide to treat the loss as partial or may decide to treat the loss as partial or may abandon his interest in the subject matter on a total loss.

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