What is pbl in marine insurance?

A marine cargo open policy is the agreement between a merchant and an insurance company to insure all goods in transit falling within that agreement for an agreed period or even indefinitely until the agreement is cancelled by either party. The countries or places to or from which the goods will be insured.

The policy does not have any specific sum insured but can be issued by the SCL or PBL along with the terms and conditions of the cover. “Limit of

A Per Bottom Limit: This is the maximum anticipated value of cargo on a ship/air. A Location Limit: It used to be common for the Location

Bill of Lading. PBL / PSL. Per Bottom Limit / Per Sending Limit.

Answers: 1 out of 1: made in the policy, insured will be self insurer and for partial losses condition of average will be applicable at time of claim. Need for marine.

Dear Insured,. As per terms and condition of Marine Open Policy you are required to furnish declaration for each and every transit to us by 5th of every month for.

All of us are familiar with the concept of per sending limit or per bottom limit (PSL/PBL) in marine insurance

What happens when the value of a single consignment exceeds the PBL/PSL? Sec 81 of the Marine insurance act 1963 says this

“ 81. Effect of under insurance.—Where the assured is insured for an amount less than the insurable value, or, in the case of valued policy, for an amount less than the policy valuation, he is deemed to be his own insurer in respect of the uninsured balance.”

If the PBL is INR 5 million and the actual value is say INR 10 million, in case of a total loss, the insured would get INR 5 million only.

How will a claim for a partial loss, say INR 6 million be treated? My view is that the insured should get INR 5 million since there is no mention of “shall bear a rateable proportion of the loss accordingly” in the act.

However some insurers apply the standard under insurance clause and pay only a rateable proportion of the loss. In the above example, I would get only 60% of my loss ie INR 3.6 mn and not 5mn.The policy condition of a leading private insurer reads like this:

“Limit per Sending (PSL): Shipment values exceeding this limit, unless prior notice is given to the company & suitable amendments have been made in the policy, insured will be self insurer and for partial losses condition of average will be applicable at time of claim” (Trust these are IRDAI approved wordings!)

The condition of average is applied in other lines of business where the insured saves premium by declaring a lower value. In case of marine, the actual value of the consignment is declared for payment of premium. So there is no incentive for declaring a lower sum insured.

PBL/PSL is for the insurer to know his exposure and generally does not have any premium impact. In the Indian market, limits of INR 500 million are easily available and with major insurance companies, this can go up to INR 1 billion.