Force majeure circumstances and insurance

force majeure is a force against which one cannot act or fight. Natural disasters such as earthquake, flood, fire, etc. it can also list such contingencies as war, embargo, sanctions. Political: hostilities, invasions and wars (including civil wars), riots, insurrections and other civil unrests, terrorist activities and crimes, embargo.There are some other circumstances beyond the sellers’ control. The seller may find himself in a situation when he cannot fulfil his obligation under the contract. It may happen if there is a general strike in the country. Production may be suspended if there is a shortage of the energy supply. In case of a contingency the seller must notify the buyers of a force majeure. Prove: Externality (The defendant must have nothing to do with the event's happening.), Unpredictability (If the event could be foreseen, the defendant is obligated to have prepared for it. Being unprepared for a foreseeable event leaves the defendant culpable. This standard is very strictly applied.), Irresistibility (The consequences of the event must have been unpreventable.)

The idea of insurance is to obtain indemnity in case of damage or loss. Kinds of insurance contract, all of which fall within one or other of the four main classes: Accident insurance includes a wide variety of polices dealing mainly with loss of property other than by fire and lightning and with property other than ships and their cargoes. Fire insurance includes a number of risks as well as fire. Life insurance or assurance: a) includes all insurances that relate to an inevitable event, that is one that must happen at some time, such as person’s death, or the date he reaches a certain age; b) a way of providing for money to be paid by an insurance company or society either to oneself at some fixed date, Marine insurance is the oldest of the four main classes of insurance, dealing with a variety of polices that give cover to owners of ships, their cargoes, and of other marine property against damage or loss caused by maritime perils. Principles of insurance: Utmost good faith- someone fills out a form applying to take out insurance, he is obliged to tell the truth about the value and condition of the goods to be insured and also to mention anything which might increase the risk of the goods being stolen or damaged. Insurable interest. -you can take out insurance for your own property, but not for someone else’s. Indemnity: if the insured suffers a loss, he has to be paid sufficient compensation to bring him back to the same financial condition as he was in before the loss – not more and not less (this does not apply to life or personal accident insurance). This prevents people over-insuring their goods in the hope of making a profit. Subrogation. Once the insurer has compensated the insured for his loss, he has the right to recover the amount in question from the party responsible for the loss (for example, if the insurer can prove that the ship was not seaworthy, he can take legal steps against the ship owner). Marine insurance: Voyage policy covers the ship and/or cargo for one voyage only. Time policy covers all shipments made within a certain period of time.. Mixed policy is a combination of the voyage and time policies. Floating policy is issued for a lump sum and the individual shipments are written off until the policy is exhausted and has to be renewed. Open policy givescover either for a fixed period, usually 12 months, after which it expires automatically, or for an indefinite period until 30 days’ notice has been given. Hull policies cover the ship itself, but not the goods being carried. Cargo policies cover the goods carried on board the ship, but not the ship itself. Losses: total loss and partial loss. Total loss can either be actual total loss where vessels or cargo are totally and irretrievably lost, or constructive total loss in a case where the ship or the goods have been abandoned because the cost of salvage or recovery would have been out of proportion to the value. Partial loss If a particular cargo is damaged by any cause, e.g. sea water or fire, the damage is called particular average and the loss must be borne by the owner of this individual consignment. “General average ” is of an entirely different character. It applies to a loss intentionally incurred in the general interest of the shipowner and the owners of the various cargoes, i.e. general average occurs when the object insured is sacrificed in order to prevent a total loss