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Warranties in Marine Insurance

Warranties in Marine Insurance

A Warranty means a stipulation or term, the breach of which entitles the insures to avoid the policy altogether and this is so even though the breach arises through circumstances beyond the control of the warrantor. The following types of warranties are recognized under the Marine Insurance Act:

(a) Warranty of neutrality - where insurable property, whether ship or goods, is expressly warranted neutral, there is an implied condition that the property insured shall have a neutral character at the commencement of the risk, and that, so far as the assured can control the matter, its neutral character shall be preserved during the risk.

(b) Warranty of good safety – the warranty that the subject-matter insured is warranted "well" or "in good safety"

(c) Warranty of seaworthiness of ship - in a voyage policy there is an implied warranty that at the commencement of the voyage the ship shall be seaworthy for the purpose of the particular adventure insured. Where the policy attaches while the ship is in port, there is also an implied warranty that she shall, at the commencement of the risk, be reasonably fit to encounter the ordinary perils of the port.

(d) Where the policy relates to a voyage which is performed in different stages, during which the ship requires different kinds of or further preparation or equipment, there is an implied warranty that at the commencement of each stage the ship is seaworthy in respect of such preparation or equipment for the purposes of that stage.

(e) A ship is deemed to be seaworthy when she is reasonably fit in all respect to encounter the ordinary perils of the seas of the adventure insured.

(f) In a time policy there is no implied warranty that the ship shall be seaworthy at any stage of the adventure, but where, with the privity of the assured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness

(g) In a voyage policy on goods or other movables there is an implied warranty that at the commencement of the voyage the ship is not only seaworthy as a ship, but also that she is reasonably fit to carry the goods or other movables to the destination contemplated by the policy.

(h) Warranty of legality.- There is an implied warranty that the adventure insured is a lawful one, and that, so far as the assured can control the matter, the adventure shall be carried out in a lawful manner.

Insurance
[Post Image Courtesy of PetroleumMan1 at FreeDigitalPhotos.net]

Implied condition as to commencement of risk

Where the subject-matter is insured by a voyage policy "at and from" or "from" a particular place, it is not necessary that the ship should be at that place when the contract is concluded, but there is an implied condition that the adventure shall be commenced within a reasonable time, and that if the adventure be not so commenced the insurer may avoid the contract.

The implied condition may be negatived by showing that the delay was caused by circumstances known to the insurer before the contract was concluded, or by showing that he waived the condition.

Alteration of Port of departure or deviation in the course of voyage

Where the ship departs from a Port other than the one place specified in the Policy, the risk is not covered. Where the ship deviates from the voyage contemplated in the policy, without any lawful excuse, the insurer is discharged from his liability. It is immaterial whether ultimately the course was regained or not.

Condonation of deviation or delay

Deviation or delay in prosecuting the voyage contemplated by the policy is condoned under the following circumstances:

(a) where such deviation or delay is authorised by any special term in the policy; or

(b) where it is caused caused by circumstances beyond the control of the master and his employer; or

(c) where the deviation or delay was reasonably necessary in order to comply with an express or implied warranty; or

(d) where reasonably necessary, delay of deviation happened for the safety of the ship or subject-matter insured; or

(e) if it was for the purpose of saving human life or aiding a ship in distress where human life may be in danger; or

(f) where reasonably necessary for the purpose of obtaining medical or surgical aid for any person on board the ship; or

(g) where it was caused caused by the barratrous conduct of the master or crew, if barratry be one of the perils insured against every wrongful act wilfully committed by the master or crew to the prejudice of the owner, or, as the case may be, the charterer.

When the cause excusing the deviation or delay ceases to operate, the ship must resume her course, and prosecute her voyage, with reasonable despatch.

Principle of Causa Proxima

This principle is based on the maxim in jure non remota cause, sed proxima spectator, which means in law the immediate and not the remote cause is to be considred in measuring the damages. Where a loss is brought by several causes in succession to one another, the proximate or nearest cause of loss must be taken into account. If the proximate cause is covered by the policy, only then the insurance company will be liable to compensate the insured.

Insurance Law And Practice - ICSI

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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