Posts Tagged ‘Globe’
The difference between a bottomry bond and a respondentia bond in ancient ocean marine insurance – Part 1
During those days when communication facilities did not exist, ships were heard or seen only on return from the voyage. The Masters of the ship had ultimate responsibilities of the ship.
A ship may require extraordinary expenditures in the course of its voyage. These expenses may be for repairs or just for sailing and maintainance. In order to raise money for these expenses, the master of the ship has to either take a loan on the Ship itself or on the cargo of the ship.There are 2 kinds of bonds availabe :
1.Bottomry Bond : The bond between the lender and borrower(master) where the ship’s bottom(aka the physical structure of ship) is given as security against money lended. Under this agreement, if the ship reaches ashore with no damages then the borrower has to pay fixed premiums every month to payoff the loan taken. But if the ship sinks then the loan is completely weaved off.
2.Respondentia bond : Loan taken against the Cargo of the ship as security.
Well, in todays world of communication, these bonds almost never exist, the master of the ship can obtain funds across the globe with a simple international bank transfer within minimal time.
Good old days!