A Study On The Compensation Liability Of Marine Insurers

In property insurance, compensation liability means when the insurer and the insured sign the insurance contract the insured transmit specific risk to the insurer. When the loss occurred, the insurer should pay the total loss of the insured on the contract items. The insurance basic principles (Insurable Interest, Utmost Good Faith, Principle of Proximate Cause, Abandonment, Right of Subrogation) are important aspect of the insurance law, especially of marine insurance law. It is in relation to the effect of the insurance contracts and lots of problems in compensation after the occurrence of the insurance risk. So it becomes the controversy focus of both the insurer and the insured in practice. There is only principle provisions in the Insurance Law of the P.R.C. and Chinese Maritime Code, but they are insufficient and always result in conflicts in practice.In respect of marine insurance, the existence of insurable interest is a necessary pre-condition for the insured to make a claim. In general speaking, marine insurance is a kind of contract based on the Utmost Good Faith Principle. The Principle of Proximate Cause should be applied when the insurer needs to judge what insured exposure should be liable for the damage to the insured subjects. In some certain circumstances, when loss happens, the insured could apply for abandonment. And, if there is any third party that should be liable for the loss, the right of subrogation then becomes available for the insurer after the claim has been paid.Based on the discussion of the marine insurance practice in China, the marine insurance laws of UK and other countries and the basic principles of insurance, this thesis is going to help the marine insurers in analyzing the losses suffered in respect of how to judge the insurance liability, when and how the claim should be paid and some key points of claim settling.