Impact of Policy Wordings on Imposition of Liability in Marine Insurance in India

Specific clauses used in marine insurance policies and the wordings thereof have an impact on the imposition of liability on the insurer. Such an impact can be proved by establishing that there is a statistically significant relationship between the two variables, and the extent of influence can be measured by examining the correlation between them. This paper limits the scope of such an examination to marine insurance claims in India regarding breach of warranties, representation, and disclosure requirements. The authors have selected the marine hull policies of public insurance companies that have been subject to such litigation and have used Fisher’s Exact Test to determine whether there is a statistically significant relationship between imposition of liability on the insurer and the policy used. Upon finding a statistically significant relationship, the policies and cases arising therefrom were examined in detail. The comprehensiveness of certain clauses of some policies, as well as the absence of these clauses in other policies, has directly contributed to the imposition of liability on the insurer in certain cases, leading to the conclusion that modification of certain clauses and addition of others could reduce rates of imposition of liability on the insurer.