Imo international Maritime Law Institute

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Overview of Marine Insurance Law
IMO International Maritime Law Institute

Malta, 7th – 10th January 2013
Professor Dr. Marko Pavliha

“There is no time for playing around.

You have been retained as counsel for the unhappy.

You have promised to bring help to the shipwrecked,

the imprisoned, the sick, the needy, to those whose

heads are under the poised axe. Where are you deflecting

your attention? What are you doing?”
Lucius Annaeus Seneca (4 BC – AD 65)


  • Mutual introduction of students and the lecturer: Professor Pavliha studied law in Ljubljana (Slovenia), Split (Croatia) and Montreal (Canada) where he obtained his doctorate at McGill under the supervision of Professor William Tetley. He practiced law for over ten years in a law firm, shipping and reinsurance business. He has been Full Professor of Commercial, Transport and Insurance Law at the University of Ljubljana since 2004 and he also taught law in Belgium, Luxemburg and Australia. Prof. Pavliha has been a Visiting Fellow at the IMO IMLI (Malta) since 1998/99 where he is also an external examiner, as well as a member of the Board of Governors and member of the Academic Board. In 2003 he was elected as Secretary General of the Comité Maritime International, until he has been invited to the Slovenian Government as Minister of Transport (2004). Later he has been elected as Deputy Speaker of the Parliament of the Republic of Slovenia (2004-2007). He was chosen ten times by the Ius Software Poll as one of the Ten Most Influential Slovenian Lawyers and won the 2001 Lawyer of the Year Award granted by the Slovenian Federation of Lawyers’ Associations. In 2002, he was the Slovenian candidate for a judge at ITLOS. He participated in drafting most of the Slovenian transport and insurance legislation after its independence. Prof. Pavliha was also a longstanding President of the Maritime Law Association of Slovenia. He is author and co-author of 23 books and over 500 articles and scientific papers. He lives with his wife and two children in a small village Nova vas nearby the Slovenian Adriatic coast.

  • Scope of lectures: see this course outline.

  • First exercise: on Thursday morning, 10th January 13, 2013, we will be discussing the Institute Cargo Clauses 1982 and 2009 (see sections 22 and 23 of this course outline). Please make copies of the A, B and C clauses, read them in advance and compare both versions.

  • Second exercise: please study and prepare the case study (see Appendix I at the end of this course outline), split into three groups (the insured, the underwriters and the arbitrators or the judges) and present the case during the last lecture on marine insurance law on Thursday, 10th January, 2013.

  • Basic course material: available at the IMO IMLI library (M. Pavliha: Lectures on Marine Insurance, IMO IMLI, Malta, 2000, 334 pages). See also the Suggested Bibliography and Interesting Websites at the end of this course outline.


  • Introduction to risk management: (1) identification of risks, (2) evaluation of risks, (3) control of risks, (4) finance the risks: insurance, bank deposits, captives, other.

  • What is insurance: the primary function of insurance is risk transference and distribution. By effecting insurance, the insured transfers the risk of economic losses to the insurer, who in turn redistributes the risk through investment and reinsurance arrangements Contract of insurance is a contract under which one person (the insurer) is legally bound to pay a sum of money or its equivalent to another person (the insured), upon the happening of a specified event involving some element of uncertainty as to time or likelihood of occurrence, which affects the insured’s interest in the subject-matter of the insurance (F. Marks & A. Balla). The insured is actually buying his “peace of mind”, the “invisible product”.

  • Non-marine insurance:

  • insurance of persons: it deals with the life, physical integrity or health of the insured and is divided into individual insurance and group insurance.

  • damage insurance: property insurance and liability insurance.

  • Marine insurance: the object is to indemnify the insured against losses incident to marine adventure.

  • Identical division of insurance in continental markets and civil codes (e.g. France, Italy).

  • Another possible division of insurance (e.g. under the EU directives): life insurance and non-life insurance (including marine insurance).

  • World insurance in 2011: the worldwide insurance premiums have increased 6% over 2010 to USD 4.597 billion (57% life insurance and 43% non-life). See .

  • Highlights of global marine insurance market: Lower premium volumes, investment income sharply reduced, P & I rates rise again, other rates firming, abundant capacity. Total reported premium in 2009 amounted to USD 22.9 billion (51.5% cargo, 29% hull, 12.9% offshore/energy and 6.6% liability). For more information see ;

df; .

  • Lloyd's of London: Lloyd’s is the world’s leading insurance market (it is not a company!) with a capacity to write about £15.95 billion in 2008. It is a society of members, both corporate and individual, who underwrite in syndicates on whose behalf professional underwriters accept risks, including marine. Supporting capital is provided by investment institutions, specialist investors, international insurance companies and individuals. Currently Lloyd’s is home to over 50 managing agents and over 80 syndicates. There are over 180 firms of brokers working at Lloyd's, many of whom specialize in particular risk categories. Lloyd’s is regulated by the Financial Services Authority. Those bringing capital to the Lloyd’s market include 1017 corporate members (private companies) and 1124 individual members (within this number are those with unlimited liability “Names” and individuals underwriting via limited liability companies). Lloyd’s is licensed to conduct business in over 200 countries and territories in accordance with local laws and regulation. See

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