What kind of contract is a contract of marine insurance under section 3 of the Marine Insurance Act,…
Section 3 of the Marine Insurance Act, 1963 defines marine insurance as an agreement to indemnify the assured, in the manner and to the extent agreed, against losses…
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What kind of contract is a contract of marine insurance under section 3 of the Marine Insurance Act, 1963?
Answer and explanation
Correct answer B
Section 3 of the Marine Insurance Act, 1963 defines marine insurance as an agreement to indemnify the assured, in the manner and to the extent agreed, against losses incidental to a marine adventure.
A guarantee answers for another person’s default. Agency concerns acting on another person’s behalf, while bailment concerns delivery of goods for a purpose with an obligation to return or deal with them as directed.
Option feedback
Option A
A guarantee addresses the default of a third person. Marine insurance covers agreed losses of the assured.
Option B
The insurer agrees to indemnify the assured against marine losses to the agreed extent.
Option C
The insurer undertakes to cover the assured’s agreed losses. It does not undertake to act on the assured’s behalf.
Option D
Marine insurance does not require delivery of the goods to the insurer under a bailment.
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