The Principle of Indemnity in Marine Insurance and an Analysis of Its Status in Iranian Law

Abstract

Marine insurance constitutes one of the most significant institutions and mechanisms within maritime transportation law. The purpose of marine insurance is to ensure the safest possible maritime voyages and to guarantee compensation for recoverable losses incurred during maritime transportation. In marine insurance, whenever a risk covered by the insurance contract materializes, it generally causes damage to the subject matter of the insurance contract. The objective of marine insurance is to restore the insured party, as far as possible, to the position they occupied prior to the occurrence of the insured risk. On the other hand, the possibility of abuse and misuse of marine insurance and related insurance policies has always existed. Accordingly, it is necessary to establish legislative and legal regulatory frameworks governing marine insurance and marine insurance policies. In this regard, the most important principle governing marine insurance and marine insurance policies is the principle of indemnity. In fact, this principle is aligned with the principal and fundamental objective pursued by insurance contracts. The legal system of Iran has introduced certain mechanisms to ensure and guarantee the implementation of the principle of indemnity in maritime transportation law through marine insurance and marine insurance policies. Furthermore, this principle also serves as the basis for the formulation of legal rules governing marine insurance and marine insurance policies in several other jurisdictions and legal systems. England represents a prominent example of such jurisdictions and legal systems. In England, noteworthy legal rules have likewise been enacted in this respect. Moreover, the judicial approaches adopted in both countries regarding this matter may also be examined. In the present study, while analyzing the nature of marine insurance and the concept, functions, and characteristics of marine insurance policies, we investigate the status and functions of the principle of indemnity in marine insurance and marine insurance policies and examine the approaches adopted by the legal systems of Iran and England toward these issues.