Preliminary

2.    (1)        In this Act unless the context otherwise requires-

(2)        For the purposes of this Act, where there is a reference to

(a)             reasonable time; or

 

(b)            reasonable premium; or

                     (c)           reasonable diligence,     

4.    (1)            A contract of marine insurance may, by its express terms, or by usage of trade, be extended so as to protect the assured against losses on inland waters or on any land risk which may b incidental to any sea voyage.

(2)            Where a ship in course of building, or the launch of a ship, or any adventure analogous to a marine adventure, is covered by a policy in the form of a marine policy, the provisions of this Act, in so far as applicable, shall apply thereto; but, except as by this section provided, nothing in this Act shall alter or affect any rule of law applicable to any contract of insurance other than a contract of marine insurance as defined in section 3 of this Act.

5.     (1)             Subject to the provisions of this Act, every lawful marine adventure may be the subject of a contract of marine insurance.

(2)           In particular there is a marine adventure where-

(a)            any ship goods or other moveables are exposed to maritime perils, such property being referred to in this Act as insurable property;

(b)          the earning or acquisition of any freight, passage money, commission, profit, or other pecuniary benefit, or the security for any advances, loan, or disbursements, is endangered by the exposure of insurable property to maritime perils;

(c)            any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property, by reason of maritime perils.

(3)            For the purposes of this section, "maritime perils" means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind or which may be designated by the policy.

6.     (1)          Every contract of marine insurance by way of gaming or wagering is void.

(2)          A contract of marine insurance shall be deemed to be a gaming or wagering contract-

  (a)          where the assured has not an insurable interest as defined by this Act, and the contract is entered into with no expectation of acquiring such an interest; or

  (b)         where the policy is made "interest or no interest," or "without further proof of interest than the policy itself," or "without benefit of salvage to the insurer," or subject to any other like term:

Provided that, where there is no possibility of salvage, a policy may be effected without benefit of salvage to the insurer.

7.    (1)            Subject to the provisions of this Act every person has an insurable interest who is interested in a marine adventure.

(2)`          In particular a person is interested in a marine adventure where he stands in any legal or equitable relation to the adventure or to any insurable property at risk therein, in consequence of which he may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss, or damage thereto, or by the detention thereof, or may incur liability in respect thereof.

8.     (1)           The assured must be interested in the subject-matter insured at the time of the loss though he need not be interested when the insurance is effected:

(2)            Where the assured has no interest at the time of the loss, he cannot acquire interest by any act or election after he is aware of the loss.

9.    (1)            A defeasible interest shall be insurable, as also shall be a contingent interest.

(2)           In particular, where the buyer of goods has insured them, he has an insurable interest, notwithstanding that he might, at his election, have rejected the goods, or have treated them as at the seller's risk, by reason of the latter's delay in making delivery or otherwise.

16.  (1)          Where the subject-matter insured is mortgaged, the mortgagor has an insurable interest in the full value thereof, and the mortgagee has an insurable interest in respect of any sum due or to become due under the mortgage.

(2)           A mortgagee, consignee, or other person having an interest in the subject-matter insured may insure on behalf and for the benefit of other persons interested as well as for his own benefit.

(3)           The owner of insurable property has an insurable interest in respect of the full value thereof, notwithstanding that some third person may have agreed, or be liable, to indemnify him in case of loss.

17.   (1)            When the assured assigns or otherwise parts with his interest in the subject-matter insured, he shall not thereby transfer to the assignee his rights under the contract of insurance, unless there is an express or implied agreement with the assignee to that effect.

(2)           Nothing in this section shall affect a transmission of interest by operation of law.

(a)            in insurance on ship, the insurable value which, in the case of a steamship, includes also the machinery, boilers, and coals and engine stores if owned by the assured, and, in the case of a ship engaged in a special trade, the ordinary fittings requisite for that trade, is the value, at the commencement of the risk, of the ship, including her outfit, provisions and stores for the officers and crew, money advanced for seamen's wages, and other disbursements (if any) incurred to make the ship fit for the voyage or adventure contemplated by the policy plus the charges of insurance upon the whole;

(b)            in insurance on freight, whether paid in advance or otherwise, the insurable value is the gross amount of the freight at the risk of the assured, plus the charges of insurance;

(c)           in insurance on goods or merchandise, in insurable value is the prime cost of the property insured, plus the expenses of and incidental to shipping and the charges of insurance upon the whole;

(d)           in insurance on any other subject-matter, the insurable value is the amount at the risk of the assured when the policy attaches, plus the charges of insurance.

20.  (1)            Subject to the provision of this section, the assured shall disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured shall be deemed to know every circumstance which, in the ordinary course of business, ought to be known by him. If the assured fails to make such disclosure, the insurer may avoid the contract.

  (2)          Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium, or determining whether he will take the risk.

  (3)          In the absence of inquiry the following circumstances need not be disclosed, namely-

(a)            any circumstance which diminishes the risk;

(b)            any circumstance which is known or presumed to be known to the insurer, and for the purposes of this paragraph, the    presumption shall extend and apply to matters of common notoriety or knowledge, and to matters which an insurer in the ordinary course of his business, as such, ought to know;

(c)            any circumstance as to which information is waived by the insurer;

(d)           any circumstance which is superfluous to disclose by reason of any express or implied warranty

(4)            For the purposes of this section, "circumstance" includes any communication made to, or information received by, the assured; and whether any particular  circumstance which is not disclosed, is material or not is, in each case a question of fact.

 21.          Subject to the provisions of section 20 of this Act, (which refers to circumstances not requiring to be disclosed by an assured),   where an insurance is effected for the assured by an agent, the agent shall disclose to the insurer-

(a)            every material circumstance which is known to the agent, who shall be deemed to know every circumstance which, in the ordinary course of business, ought to be known by or to have been communicated to the agent; and

(b)           every material circumstance which the assured is bound to disclose unless it comes to the knowledge of the assured too late to communicate it to the agent.

22.   (1)           Every material representation made by the assured or his agent to the insurer during the negotiations for the contract, and before the contract is concluded shall be true; and if untrue the insurer may avoid the contract.

(2)            A representation is material which would influence the judgment of a prudent insurer in fixing the premium, or determining whether he will take the risk.

(3)            A representation may be either a representation as to a matter of fact, or as to a matter of expectation or belief.

(4)            A representation as to matter of fact is true, if it is substantially correct, that is to say, if the difference between what is represented and what is actually correct would not be considered material by a prudent insurer.

(5)          A representation as to a matter of expectation or belief is true if it is made in good faith.

(6)         A representation may be withdrawn or corrected before the contract is concluded.

(7)          Whether a particular representation is material or not is, in each case, a question of fact.

24.  (1)           Subject to the provisions of any statute, a contract of marine insurance shall not be admissible in evidence unless it is embodied in a marine policy in accordance with the form in the First Schedule to this Act or to the like effect.

(2)           The policy may be executed and issued either at the time when the contract is concluded, or afterwards; and subject to the provisions of this Act and unless the context of the policy otherwise requires, the terms and expressions mentioned in the First Schedule to this Act shall be construed as having the scope and meaning in that Schedule assigned to them.

(3)            Nothing in this section shall affect the operation of a contract for such insurance as is mentioned in section 368 of the Merchant Shipping Act.

25.           A marine policy shall specify the name of the insured, or of some person who effects the insurance on his behalf.

26.   (1)            A marine policy shall be signed by or on behalf of the insurer, or if the insurer is a corporation, the corporate seal may be sufficient.

(2)           Where a policy is subscribed by or on behalf of two or more insurers, each subscription, unless the contrary is expressed, shall constitute a distinct contract with the assured.

(3)           Nothing in this section shall be construed as requiring the subscription of a corporation to be under seal.

27.          Where the contract is to insure the subject-matter "at and from," or from one place to another or others, the policy is called a voyage policy; and where the contract is to insure the subject-matter for a definite period of time the policy is called a time policy. A contract for both voyage and time may be included in the same policy.

28.  (1)            The subject-matter insured shall be designated in a marine policy with reasonable certainty; but the nature and extent of the interest of the assured in the subject-matter insured need not be specified in the policy.

(2)           Where the policy designates the subject-matter insured in general terms, it shall be construed to apply to the interest intended by the assured to be covered.

(3)            In the application of this section, regard shall be had to any usage regulating the designation of the subject-matter insured.

29.  (1)            A policy may be either valued or unvalued, and for the purposes of this section, a valued policy is a policy which specifies the agreed value of the subject-matter insured.

(2)            Subject to the provisions of this Act, and in the absence of fraud, the value fixed by the policy is, as between the insurer and assured, conclusive of the insurable value of the subject intended to be insured, whether the loss is total or partial.

(3)           Unless the policy otherwise provides, the value fixed by the policy is not conclusive for the purposes of determining whether there has been a constructive total loss.

31.  (1)            A floating policy is a policy which describes the insurance in general terms, and leaves the name of the ship or ships and other particulars to be defined by subsequent declaration.

(2)           The subsequent declaration or declarations may be made by indorsement on the policy, or in other customary manner.

(3)            Unless the policy otherwise provides, the declarations shall be made in the order of dispatch or shipment. In the case of goods they shall comprise all consignments within the terms of the policy, and the value of the goods or other property shall be honestly stated; but any omission or erroneous declaration may be rectified even after loss or arrival, provided the omission or declaration was made in good faith.

(4)           Unless the policy otherwise provides, where a declaration of value is not made until after notice of loss or arrival, the policy shall be treated as an unvalued policy as regards the subject-matter of that declaration.

32.  (1)           Where an insurance is effected at a premium to, and no arrangement is made, a reasonable premium shall be payable.

(2)            Where an insurance is effected on the terms that an additional premium is to be arranged in a given event, and that event happens but no arrangement is made, then a reasonable additional premium shall be payable.

33.   (1)            Where two or more policies are effected by or on behalf of the assured on the same adventure and interest or any part thereof, and the sums insured exceed the indemnity allowed by this Act, the assured is said to be over-insured by double insurance.

(2)           Where the assured is over-insured by double insurance-

(a)           the assured, unless the policy otherwise provides, may claim payment from the insurers in such order as he may think fit, provided that he shall not be entitled to receive any sum m excess of the indemnity allowed by this Act;

 

(b)            where the policy under which the assured claims is a valued policy, the assured shall give credit as against the valuation for any sum received by him under any other policy without regard to the actual value of the subject-matter insured;

 

(c)            where the policy under which the assured claims is an unvalued policy he shall give credit, as against the full insurable value, for any sum received by him under any other policy;

 

(d)           where the assured receives any sum in excess of the indemnity allowed by this Act, he shall be deemed to hold such sum in trust for the insurers, according to their right of contribution among themselves.

 

34.   (1)           For the purposes of this section and of sections 35 to 42 of this Act (which relate to warranties) a warranty means a promissory warranty, that is to say, a warranty by which the assured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby he affirms or negatives the existence of a particular state of facts.

(2)            A warranty within the meaning of this section may be express or implied, and is a condition which shall be exactly complied with, whether it is material to the risk or not. If it is not so complied with, then, subject to any express provision in the policy, the insurer shall be discharged from liability as from the date of the breach of warranty, but without prejudice to any liability incurred by him before that date.

35.   (1)           Non-compliance with a warranty is excused when, by reason of a change of circumstances, the warranty ceases to be applicable to the circumstances of the contract, or when compliance with the warranty is rendered unlawful by any subsequent law.

(2)           Where a warranty is broken, the fact that the breach has been remedied and the warranty complied with before loss shall be no defence to the assured; but a breach of warranty may be waived by the insurer.

36.  (1)            An express warranty may be in any form of words from which the intention to warrant is to be inferred.

(2)            An express warranty shall be included in or written upon the policy, or be contained in some document incorporated by reference into the policy.

(3)           An express warranty shall not exclude an implied warranty, unless it is inconsistent therewith.

37.   (1)           Where insurable property, whether ship or goods, is expressly warranted neutral, there is an implied condition that the property 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.

(2)           Where a ship is expressly warranted "neutral" there is also an implied condition that, so far as the assured can control the matter, she shall be properly documented, that is to say, that she shall carry the necessary papers to establish her neutrality, and that she shall not falsify or suppress her papers, or use simulated papers. If any loss occurs through breach of this condition, the insurer may avoid the contract.

40.  (1)           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.

(2)            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.

(3)            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.

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

(5)            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.

41.   (1)            In a policy on goods or other moveables there is no implied warranty that the goods or moveables are seaworthy.

(2)            In a voyage policy on goods or other moveables 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 moveables to the destination contemplated by the policy.

43.   (1)           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 is not commenced the insurer may avoid the contract.

(2)            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.

46.          (1)    Where, after the commencement of the risk, the destination of the ship is voluntarily changed from the destination contemplated by the policy, there is said to be a change of voyage.

        (2)     Unless the policy otherwise provides, where there is a change of voyage, the insurer is discharged from liability as from the time of change, that is to say, as from the time when the determination to change it is manifested and it is immaterial that the ship may not in fact have left the course of voyage contemplated by the policy when the loss occurs.

47.   (1)           Where a ship, without lawful excuse, deviates from the voyage contemplated by the policy, the insurer is discharged from liability as from the time of deviation, and it is immaterial that the ship may have regained her route before any loss occurs.

(2)          There is a deviation from the voyage contemplated by the policy-

  48.  (1)           Where several ports of discharge are specified by the policy, the ship may proceed to all or any of them, but, in the absence of any usage or sufficient cause to the contrary, she shall proceed to them or such of them as she goes to, in the order designated by the policy; and if she does not, there is a deviation.

(2)            Where the policy is to "ports of discharge" within a given area and they are not named, the ship shall, in the absence of any usage or sufficient cause to the contrary, proceed to them or such of them as she goes to, in their geographical order; and if she does not, there is a deviation.

50.   (1)           Deviation or delay in prosecuting the voyage contemplated by the policy is excused-

(a)             where authorised by any special term in the policy; or

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

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