What is the concept of marine insurance under Admiralty Law?

Marine insurance is a concept within Admiralty Law, which governs maritime activities. Marine insurance is designed to protect the owners of ships and the cargo they carry from acts of nature, theft, or other perils at sea. Under Admiralty Law, marine insurance is a contract of indemnity. That is, the insurer will pay the policyholder a set amount in case of a loss. This amount is predetermined, and it is called the "sum insured" or "coverage limit." The insurer will examine the risks of the voyage and, as a result, determine the amount of coverage needed. Marine insurance can also protect from third-party liabilities, such as liability for damages to property or litigation costs in the event of an accident. Such coverage is important for the safety of the crew, passengers, and those persons who are affected by the ship’s activities at sea. In California, the California Insurance Code covers marine insurance. This code requires insurers to provide coverage for any vessel, cargo, freight, or voyage that is within the state and part of the insured’s business or trade. Additionally, the code dictates that the policyholder be provided with a description of the coverage and its limit of liability. Additionally, a policyholder must be provided with proof of coverage, such as a certificate of marine insurance.

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What is the concept of marine insurance under Admiralty Law?

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