Daily Archives: June 16, 2017

Which Parties Are Affected By The Insurance


Marine cargo insurance is associated to the risk factors in transportation of goods by the sea which is covered by an insurance policy. As insurance has become a major factor to compensate risk for cargo as well as life, new and improved policies are made to help traders cover every aspect of the trade. As there are different parties involved in the policy, each is affected in their own way due to which a well-drafted contract is essential.


1)    The insured is the person who purchases the insurance in order to safeguard his cargo and have financial backing when losses are incurred. He is also called the beneficiary as the compensation claim is given to him.


2)    The insurance company that promises to compensate the liabilities when losses are incurred by the businessman is called an underwriter. Certain businesses are very complex and may require a more elaborate policy, in such cases more than one underwriter can be appointed to carry out specific work that will be mentioned in the policy. Unexpected accidents like storms, ship sinking, robbery, cyclone, bad weather, and collision are all threats at sea which are covered by the underwriter. Compensation, when pirates capture ships and destroy cargo, is also covered by the underwriter. Damages incurred due to a fire caused by faulty operation of the ship are compensated too. In the case of a sudden war break out, if the cargo or the ship is damaged in any way, the underwriter provides financial payment to cover the losses. The underwriter is also known as the insurer. In a general understanding, the insurance company is given these terms. But in reality, depending on the policy which is taken and the size of the business, other agents and middlemen intervene in the insurance procedures. Such individuals are:


  • Insurance Broker – He works on behalf of the insured and fulfills the formalities that the insured is unable to spare time for. He is generally paid on a commission basis. Some also take up the responsibility of collecting the insurance premium from the insured.
  • Loss Adjusters – They work for the underwriter. They conduct surveys to evaluate and negotiate claims. They participate actively in settlement of claims.
  • Surveyors – They engage in carrying out surveys to inspect cargo, transport facilities and the situation surrounding the claim. The insurer is provided a survey report.
  • Loss Assessors and Claim Consultants are requested to help present and negotiate claims.
  • Settling Agents and Managing Agents – the underwriters appoint agents in cities around the world who settle claims when the insurance involves that city.


The more global the business, the more middlemen are required to help with the documentation of insurance policies. Though digital documentation is the most accepted form of paper trail, yet the involvement of middlemen for large – scale businesses is the way to go.