In view of the various
marine perils discussed above, the ship owner and the cargo owners will have to
incur huge amount of the losses. Those losses can be claimed from the insurer
only when the cause of the loss is an insured peril, If otherwise ,
obviously it does not come within the
scope of the policy and the insurer is not liable to make good the loss. In
theory, it seems to be a simple rule that the insurer is liable for losses
caused by insured perils only, but in practice the determination of the actual cause of the loss poses a huge
problem. The main difficulty arises when this loss is caused by the operation of
several contributory causes or a chain
of causes. In such a situation the
principles of cause proxima is applied
for determining the scope of
insurer’s liability. The losses incurred by the ship owners and the cargo owners are summarized in the following .
(1) TOTAL LOSS; The completed destroying or
ruining of the property insured is called
total loss. In order when the subject
matter insured or the goods are totally
lost or completely destroyed , there is total loss. For example id the risk of collision is inured and the ship is totally destroyed the insured can realize the total loss from
the underwriters. According to Section
68 of the Marine insurance Act 1964,
Subject to the provisions of this Act and to any or and to any express
provisions in the policy , where there
is a total loss of the subject matter insured
(1) If the policy is a valued
policy, the measure of indemnity is the
sum fixed by the policy
(2), If the policy be an un valued policy, the
measures of indemnity is the insurable value of the subject matter insured. The
total loss is subdivided into a two groups viz,. deprived of the
possession of the subject matter, it is
called actual total loss.
(1) The
subject matter is completely destroyed
e. g. a ship has sunk in deep
waters and neither the ship nor the cargo on board can be recovered or the ship caught fire in the which
ship and the cargo were damaged beyond
repair.
(2) The subject matter is so damaged as to cease to be a thing of the kind
insured. Here, the subject matter is not
completely destroyed but damaged to such
an extent as the result of the mishap,.
For example a ship might get ashore and
heavy waves might strike against her and
smash her to pieces or where the crockery
or glass ware is reduced to pieces and
is unfit for use a as such.
(4). The subject
matter is lost. For example, where a ship missing for a very long time
and no news of her is received I, e.
nothing is heard about the ship after she left the shore even after due search
an actual total loss is presumed unless there is some other proof to show
against it. In case of actual total loss the insured is entitled to recover full amount of loss.
But after receiving the compensation ,
the title of goods passes on to the insurer. If arrangements are made to send another ship to save and
bring it back and repair it, the total expense
involved will be greater than the value of the ship so damaged . In this
case, the ship may be abandoned and will be deemed as a constructive total loss. The constructive total loss will be there