GN Ltd. is engaged in the manufacture and sale of metalized and coated films and papers. Company is planning to start new manufacturing facility for which project planning has already begun. Project team is working day a
CS Professional · Insurance - Law and Practice · PYQS · December 2021
GN Ltd. is engaged in the manufacture and sale of metalized and coated films and papers. Company is planning to start new manufacturing facility for which project planning has already begun. Project team is working day and night to procure land, financial arrangements, procuring orders and procurement of machinery from various places, storing machineries purchased and delivered etc. The company agreed to purchase one Machinery from M/s VG Limited, England for a total value of £5 lakh. The machinery purchased was to be installed at the company's Plant at Jammu and in order to ensure, secured and safe delivery, the company took a marine cargo (Specific Voyage Policy) for a total assured sum of ₹500 lakh against any loss/damage occurring to the machinery during transit from Port to Jammu. The company paid the insurance premium due, to complete the contract. GN Ltd. bought the same policy from other insurer also for the same sum insured and on almost the same terms and conditions. The machinery had arrived at Mumbai Port and was delivered at the petitioner's warehouse at Jammu. However, on opening the packed cases, it transpired that the machinery had got damaged during the course of transit. Both the diffusion pumps of the vacuum metallizer had cracked and the elbow of one of the pumps had bent and was damaged beyond repair. Consequently, insurers were informed about the damage and also sought for conducting a survey for assessment of loss estimated at ₹50 lakhs. Answer the following questions considering the above: Is it possible that GN Ltd. can take multiple marine insurance policies for the same cargo? In insurance terminology, what do we call GN Ltd. ?
Answer & Explanation:
It is possible that the Policyholder can take multiple marine insurance policies for the same cargo or freight with different insurers. Under such circumstances, where two or more policies are effected by or on behalf of the same assured on the same adventure and interest or any part thereof, and the sums insured exceed the indemnity allowed by Marine Insurance Act, 1963, the assured is said to be over-insured by double insurance. GN Ltd. called as insured as GN Ltd. procures the policy or becomes the beneficiary through the insurance contract.
Topics: Marine Insurance