CHAPTER I 

 INTRODUCTION 



This introductory chapter includes a brief statement of the 

 insurance problem, the scope of the study, methods used in con- 

 ducting the studj', a number of qualifications about the study and 

 about this report, and finally, the arrangement of the material 

 presented. Discussion of these points is considered worthwhile 

 for purposes of orienting the reader. 



1. The insiirance problem . From the vessel owner's viewpoint, 

 the insurance problem may be simply stated as substantially rising 

 premium costs for hull and protection and indemnity insurance for 

 the last few years. Since the premium for an insured vessel con- 

 stitutes one of its major cost items for fishing operations, the 

 insurance problem becomes part and parcel of the over- all problem 

 of profitability in the commercial fishing industry. The fact that 

 a considerable number of vessels are not insured for various reasons 

 does not diminish the acuteness of the insurance problem. The risk 

 of irreparable economic loss from accidents is always present and 

 the risk from a suit for personal mishap is always possible, whether 

 these risks are assumed by a risk carrier or shouldered by the 

 vessel owner himself. The problem is equally important to the 

 insurer because rising losses which preceded the rise of the pre- 

 mium have meant no profits for almost all firms, and for some 

 insurers, substantial losses. 



2. Scope of the study . Stating the insurance problem in simple 

 terras does not in any way diminish the complexity of the problem and 

 its many-fold aspects nor simplify the task of studying it. A system- 

 atic analysis of the problem has required a well defined research 

 objective in order to avoid becoming lost in the maze of side issues 

 and superficial thinking. This study was designed to inquire into 

 the insiirance problem as part of the cost of operating a commercial 

 fishing vessel, to verify the presence and extent of such a problem, 

 to discover the factors which have given rise to the problem, to draw 

 a number of conclusions, and to arrive at a number of constructive 

 recommendations which, if implemented, could help the commercial 

 fishing industry obtain adequate insurance protection at reasonable 

 premiums. The five-year period 195^^ through 195^ was selected for 

 the study of insurance experience . Although the sampling of individ- 

 ual policies was confined to this period, collection of information 

 from other sources also covers the years 1955 and 1950- The study 

 was confined to the New England, Gulf and California Areas. 



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