Page 62 - Office Practice and Accounting 10

captured by thieves or founder on a rock. The ships and the cargo (i.e., the goods
on board) may be lost in such a case and a tremendous financial loss may be caused
to their owners. Such risks, if not covered, will constitute a great obstacle to the
international trade. It is to safeguard against them that marine insurance has been
devised. Marine insurance was the first type of insurance to make its appearance in
the early days of maritime commerce and was followed by life and fire insurance.
Marine insurance has a colorful history, beginning informally in England during the
17th century. In 1906, the Marine Insurance Act was passed under British law, creating
a standard operating procedure for policies that dictates the world's policies to this
day. The standards set forth by the act are considered reasonable, but due to changes
in technology and social standards, the act is generally seen as obsolete and is being
replaced by more modern legislature.
There are several varieties of insurance that can be taken out by a boat or ship owner.
Marine cargo insurance covers whatever goods the boat is carrying. Inland marine
insurance can be procured for floating vessels that are not ocean-bound, but travel
primarily on lakes, rivers and reservoirs. There are also more general policies that
cover the boat itself and its passengers, liability for damages to other moving vehicles
and liability during an encounter with a non-moving object. These all fall under the
heading of a marine insurance policy.

Motor insurance

A motor insurance policy is a mandatory policy issued by an insurance company as
part of prevention of public liability to protect the general public from any accident
that might take place on the road. It is insurance for a motor vehicle such as a car,
which provides protection against loss in the event of an accident, theft, etc
There are two types of motor insurance - The 'Act only policy' and a 'Comprehensive
policy'. The scope of the 'Act only' policy is to pay compensation for death or any
bodily injuries and for damage to property of third parties. While the insured is
treated as the first party and the insurance company as the second party, all others
would be third parties.

In case the vehicle is purchased under a hire-purchase agreement, the financiers insist
upon a comprehensive policy to take care of their interest as collateral security. The
perils covered under the comprehensive policy are fire or theft or both fire and theft
in combination with the minimum requirements of the act (i.e. third party liability).
Now in Nepal, the law mandates that every owner of a motor vehicle must have one
motor insurance policy.

Aviation insurance
Aviation insurance is insurance against claims and losses arising from the ownership,
maintenance, or use of aircraft, hangars, or airports including damage to aircraft,
personal injury, and property damage.

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