Double insurance is quite distinct from reinsurance. Here, the assured affects more than one insurance. If he does without any fraudulent intent, he can recover on all the policies. If the total amount of all the policies taken together comes to more than the actual value of the subject matter insured, the insured can only recover the actual value.
He can recover the full value on the original policies till his total loss is made up. If, for example, a merchant not knowing the actual value of his goods, insures them for an approximate amount, and then thinking that amount is not sufficient to cover the risk effects a second insurance, he can do so. Now, when the loss occurs, he may recover as much of it as he can, from the first policy, and if that does not satisfy his claim, he may proceed to recover the balance on the other policy. The underwriters may, thereafter, adjust their contributions among themselves.
How Marine Insurance is Affected
In England, besides the large marine insurance companies with which we are quite familiar in India, there are private underwriters who are members of the well- known corporation of Lloyd’s who do a great proportion of the business of marine insurance.
ADVERTISEMENTS:
Where insurance is to be effected on Lloyd’s it is usually done through an insurance broker. It is a contract mainly between the insured and the underwriter. When the broker effects insurance with the private underwriter on Lloyd’s he gets a temporary document made out, known as the ‘Slip,’ which consists of a simple statement as to the name of the ship, date, description of the risk, the sum or sums insured and the rate of premiums.
The underwriters who undertake the risk as mentioned in the slip initial it each for the sum he thinks proper to underwrite, until the whole amount is subscribed. As a ‘slip,’ is not stamped, it would not be a valid contract of insurance in English law. On Lloyd’s, however, a slip initialed by a member of Lloyd’s would be binding on the member according to the rules of Lloyd’s. Where a stamped policy has been made out and executed after a slip, the slip may be consulted for the purpose of ascertaining the intention of the parties to the policy.
It has, however, been held that if the contract of insurance is made in a country where the policy does not require to be stamped an action may be maintained upon an agreement to issue a policy and a specific performance of it may be ordered.
Salvage
ADVERTISEMENTS:
Salvage is a charge made by the owner of a ship or its captain and by way of reward or compensation for saving the cargo contained in a ship at sea in accidents.