What is Insurance?
There are many definitions of Insurance, they are:
1) Insurance is a method of sharing the financial loss of a few by many who are equally exposed to the same loss.
2) Insurance is a method of spreading the risk of an individual over a group of individuals.
3) From perspective of Insured, Insurance is an exchange of a Probable Big Loss (Accident) by a Small fixed Loss (Premium)
Insurance covers only Fortuitous losses and not the ones that are bound to occur.
Marine Insurance
As defined in MIA 1963:
“A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the insured, in the manner and to extent thereby agreed, against marine losses, that is to say, the losses incidental to marine adventure”
In simple words: Marine Insurance is a contract where the Insurer Indemnifies (covers the loss) the Insured for the losses to subject matter caused by Insured peril up to the limit agreed against a payment of premium.