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Marine Insurance: Law and Practice

CHAPTER 1

THE NATURE OF MARINE INSURANCE1

I INTRODUCTION

1.1 Activity often combines opportunity of advantage with risk of loss. Thus, the financial rewards of international trade have to be offset against the numerous risks involved in transporting goods, particularly in the potentially dangerous environment of the sea. A person engaged in international commerce could bear its risks himself, with legal recourse for compensation against anyone who has caused him a loss by breach of contract or tort, but otherwise relying on his own resources. However, the adverse risks of a particular adventure or type of trade are a disincentive to participation in commerce. This is not only against the interests of individual traders but also against the public interest in promoting and benefiting from trade.

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