Barratry in Marine Insurance

Numerous marine perils occur in the oceans, including man-of-war, jettison, pirates, thieves, explosions, restrainments, and commotions. Barratry is one such marine peril.

It involves fraudulent or criminal activities committed by the crew or the captain of the vessel. These activities include the fraudulent sale of a ship or cargo without the shipowner’s or cargo owner’s knowledge, theft by the crew, starting a fire on the ship to destroy the goods, etc.

This can cause significant damage to the ship, cargo, and, consequently, to the shipowners and cargo owners. This intentional damage to the insured goods and services can have a substantial impact on the marine insurance policy. These policies usually provide financial coverage for the loss caused by these abovementioned wrongful and deceitful acts.

Different clauses in the marine cargo insurance policy state rules and regulations regarding raising a claim for loss and damage due to barratry. The policyholders must be aware of all the clauses by reviewing their contracts. This is especially important because there are a few limitations to the coverage along with exclusions.

The captain sails away with the cargo and goods in the vessel for personal purposes and with an intention to steal and sell.

Change in voyage

The intentional and fraudulent sinking of the ship in order to damage the shipowner’s or cargo owner’s property.

Lack of defence

The captain sails the ship to a different place to sell the goods and flees with no intention of joining the vessel or crew again.

All of the above situations are considered as barratry and are legally punishable.

Barratry is a marine peril that has been in existence for an extended period of time now. It can cause a substantial amount of damage and loss to the ship, the crew, the cargo, the ship owner, and the cargo owner. If the goods or the vessel aren’t insured, this discussion has no point. But if those aspects of the trade are covered in a marine insurance policy, the clause for barratry in marine insurance will safeguard your financial situation.

This clause is very essential in order to provide optimal financial support to the cargo and shipowners to stand on their feet again, and begin with the trade once more. Without these clauses in the insurance policy, there would be no protection against losses resulting from intentional misconduct by the crew and the captain. Beyond the financial perspective of the discussion, it is legal or institutional compliance.

There is a small difference between barratry and theft, and let us understand what that is. Theft has a wider scope and context in the world, whereas barratry is limited to the maritime domain. Theft, in the context of marine trading, involves unlawfully taking unauthorised goods and property from the cargo, and anyone can do this. Barratry is unethical and fraudulent criminal acts performed by the crew and captain of the ship itself.

While both theft and barratry negatively impact the financial stability of the shipowner and the cargo owner, barratry is an ancient marine peril, and theft is an ancient criminal act, sometimes referred to as art by some philosophers!

Dealing with import and export trade becomes a safe journey and enterprise with the stability provided by marine cargo insurance. Customise your own cargo insurance policy on Tata AIG’s official website and ensure complete protection before beginning your maritime journey.

After exploring the topic of barratry in marine insurance, we can conclude the blog by understanding its importance. This very prevalent ancient marine peril continues to exist in the modern marine trade as well. This conversation presented a tapestry of complexities and risks that an imports and exports trader has to face on a daily basis.

Barratry encapsulates a vast landscape of unfair and illicit actions that bring misfortune to the vessel and the cargo present in it. Along with the assets, it also puts the financial stability of the shipowners and cargo owners at stake.

The barratry clause in Tata AIG’s marine insurance policy provides a huge relief to the involved parties as it provides a capable shield against financial losses!

How does barratry impact marine policies?

Barratry poses a significant concern to insurance providers since it is commonly found. It can cause huge financial losses to shipowners and cargo owners, impacting the risks insurance providers have to take on.

How can shipowners negate barratry risk?

It is very difficult to negate the risks of barratry. However, they can be minimised. Shipowners can conduct crew training sessions from time to time, hire trustworthy people, and use modern technology to keep an eye on the ship. These can be some of the tips and tricks that the shipowners can implement to avoid barratry during trade.

What is the origin of the word “Barratry”?

The word barratry has its roots in the old French word “Baraterie,” which means deceit or trickery. Barratry was then used in the context of marine insurance to signify unlawful actions that caused loss to the owners.