The Essence of the Marine Insurance Contract
Under the contract of marine insurance, the insurer, in return for the appropriate consideration — the insurance premium — undertakes the obligation to compensate the insured, or another person in whose favour the contract has been concluded, for loss when the peril or event indicated in the contract occurs — the insured event. This definition reflects two fundamental elements of marine insurance: on the one hand, the insurer answers only for the peril or event named in the contract, not for every contingency; on the other, compensation belongs both to the insured and to a benefiting third party — the beneficiary. Marine insurance thus differs from general insurance in that its subject-matter consists of the specific risks connected with navigation, and the space of those risks is defined precisely by the Code and by the contract.