A policy of marine insurance is usually obtained from private underwriters, through an insurance broker, who acts for the underwriter’s account.
The party wishing to insure fills up a memorandum containing the particulars of the insurance he proposes to the underwriters, together with such warranties as may influence the decision of the insurer in undertaking the risk or calculating’ the premium.
The memorandum is handed over to the broker, who finds out the paryty or parties willing to accept the risk and negotiates the premium, then draws up a provisional document called the slip, and gets it signed by them.
The contract of insurance is then considered as executed, and the drawing up of the policy takes place at the parties’ convenience, the slip remaining in the broker’s hands till delivery of the policy.
ADVERTISEMENTS:
With companies the insurance is effected sometimes in a different way, without the intermission of a broker. The person intending to get some property or interest insured goes direct to the company’s office and fills up a request note, by which he proposes the insurance, giving the necessary particulars of the risk, or such, at least, as he possesses at the time.
The usual conditions once settled with the manager, or any other qualified agent of the company, he receives a cowering note (also cover note), in which it is stated that the insurance has been regularly effected, and that the policy shall be delivered in due course.
Most companies have adopted a policy of their own, slightly altering the original form of Lloyd’s.
Though not binding in law, both the slip and the covering note are considered, in practice, as binding upon the parties, and having the force of an interim policy, pending the execution of the formal instrument.
ADVERTISEMENTS:
A policy is construed by the law of the place where it is made.
The payment of premium is to take place within a fixed number of days after the delivery of the policy.
It is very seldom that the whole risk of an adventure is taken up by a single underwriter, sometimes not even by a single company.
Many underwriters work in groups, either of whom has authority to underwrite for the rest; both the slip and the policy are then executed by the several parties, each accepting a part of the risk, the amount respectively insured being set down opposite to each underwriter’s signature, as:
ADVERTISEMENTS:
The entering of each party’s name in the instrument, completing his part of the risk, is described as: to take a line in a policy.