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(2) 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 : (3) In insurance on goods or merchandise,
the 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: (4) 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 in
Insurance is uberrimae fidei.
Disclosure by assured.
Disclosure and Representations. 17. A contract of marine insurance is a con. tract based upon the utmost good faith, and, if the utmost good faitb be not observed by either party, the contract may be avoided by the other party.
18.—(1) Subject to the provisions of this section, the assured must disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assored, and the assured is deemed to know every circumstance which, in the ordinary course of business, ougbt 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. The insurer is presumed to know matters of common notoriety or knowiedge, and matters which an insurer in the ordinary course of his business, as such, ought to
know; (c) Any circumstance as to which infor
mation is waived by the insurer; (d) Any circumstance which it is superfluous to disclose by reason of any ex
press or implied warranty. (4) Whether any particular circumstance, which is not disclosed, be material or not is, in each case, a question of fact.
(5) The term “ circumstance" includes any communication made to, or information received by, the assured.
19. Subject to the provisions of the preced. ing section as to circumstances which need not be disclosed, where an insurance is effected for
the assured by an agent, the agent must dis- A.D. 1906.
known to himself, and an agent to in-
have been communicated to, him; and
assured is bound to disclose, unless it
municate it to the agent. 20.-(1) Every material representation made Representaby the assured or his agent to the insurer
tions pendduring the negotiations for the contract, and ing negotiabefore the contract is concluded, must be true. tract. If it be 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 a matter of fact is true, if it be substantially correct, that is to say, if the difference between what is repre. sented 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 be made in good faith.
(6) A representation may be withdrawn or corrected before the contract is concluded.
17) Whether a particular representation be material or not is, in each case, a question of fact.
21. A contract of marine insurance is deemed When con. to be concluded when the proposal of the deemed to assured is accepted by the insurer, whether be con the policy be then issued or not; and for the cluded. purpose of showing when the proposal was accepted, reference may be made to the slip or covering note or other customary memorandum of the contract, although it be un. stamped.
The Policy. 22. Subject to the provisions of
any statute, a contract of marine insurance is inailmissible embodied in evidence unless it is embodied in a marine in policy. policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded, or afterwards. 23. A marine policy must specify
What policy (1) The name of the assured, or of some must
person who effects the insurance on his specify.
Contract must be
Disclosure by agent effecting Insurance.
tion of ternis in
(2) The subject matter insured and the
risk insured against : (3) The voyage, or period of time, or both,
as the case may be, covered by the in
(5) The name or names of the insurers. Signature 24.-(1) A marine policy must be gigned by of insurer.
or on behalf of the insurer, provided that in the case of a corporation the corporate seal may be sufficient, but nothing in this section shall be construed as requiring the subscription of a corporation to be under seal.
(2) Where a policy is subscribed by or on behalf of two or more insurers, each subscription, unless the contrary be expressed, consti. tntes a distinct contract with
assured. Voyage 25.-(1) Where the contract is to insure the and time policies.
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. 1 Edw. 7. (2) Sabject to the provisions of section c. 7.
eleven of the Finance Act, 1901, a time policy which is made for any time exceeding twelve
months is invalid. Designation 26.—(1) The subject-matter insured must be of subjecte designated in a marine policy with reasonable
(2) The nature and extent of the interest of the assured in the subject-matter insured need not be specified in the policy.
(3) Where the policy designates the subjectmatter insured in general terms, it shall be construed to apply to the interest intended by the assured to be covered.
(4) In the application of this section regard shall be had to any usage regulating the
designation of the subject-matter insured. Valued
27.—(1) A policy may be either valued or policy.
(2) A valued policy is a policy which specifies the agreed value of the subject matter insured.
(3) Subject to the provisions of this Act, and in the absence of fraudi, the value fixed by the policy is, as between the insurer and assured, conclusive of the insurable value of the sub. ject intended to be insured, whether the loss be total or partial.
(4) Unless the policy otherwise provides. the value fixed by the policy is not conclusive for the purpose of determining whether there
has been a constructive total loss. Unvalued 28. An unvalued policy is a policy which policy.
does not specify the value of the subject-matter insured, but, subject to the limit of the sum
insured, leaves the insurable value to be A.D. 1906. subseqnently ascertained, in the herein-before specifiod.
29.-(1) A floating policy is a policy which Floating describes the insurance in general terms, and policy by leares the name of the ship or ships and other ships. particulars to be defined by subsequent de. claration.
(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 must be made in the order of dispatch or shipment. They must, in the case of goods, comprise all consignments within the terms of the policy, and the value of the goods or other property must be honestly stated, but an omission or erroneous declaration may be rectified even after logs or arrival, provided the omission or declaration was made in good faith.
(4) Unless the policy otherwise prorides, where a declaration of value is not made until after notice of loss or arrival, the policy must be treated as an unvalued policy as regards the subject-matter of that declaration.
30.—(1) A policy may be in the form in the ConstrucFirst Schedule to this Act.
(2) Subject to the provisions of this Act, and policy. 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. 31. — (1) Where an insurance is effected at Premium to
be arranged. a premium to be arranged, and no arrangement is made, a reasonable premium is payable.
(2) Where an insurance is effected 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 is payable.
Double Insurance. 32.-(1) Where two or more policies are Double effected by or on behalf of the assured on the insurance. 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
provides, may claim payment from the
by this Act;
claims is a valued policy, the assured must
A.D. 1906. 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 must give credit, as against the full insurable value, for any sum received by him under
ang other policy; (d) Where the assured receives any sum in
excess of the indemnity allowed by this Act, he is deemed to hold sach sum in trust for the insurers, according to their right of contribution among themselves.
Warranties, &c. Nature of 33.-(1) A warranty, in the following sections Farranty. relating to warranties, 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 conditions shall be fulfilled, or whereby he afbrms or negatives the existence of a par. ticular state of facts.
(2) A warranty may be express or implied. (3) A warranty, as above defined, is a condition which must be exactly complied with, whether it be material to the risk or not. If it be not so complied with, then, subject to any express provision in the policy, the insurer is discharged from liability as from the date of the breach of warranty, but with. out prejudice to any liability incurred by him before that date.
34.-(1) Non-compliance with a warranty is breach of warranty
excused when, by reason of a change of circumExcused. stances, 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 assured cannot avail himself of the defence that the breach has been remedied, and the warranty complied with, before loss.
(3) A breach of warranty may be waived by
ihe insurer. Bxpress 35.-(1) An express warranty may be in any warranties. form of words from which the intention to
warrant is to be inferred.
(2) An express warranty must be included in, or written upon, the policy, or must be contained in some document incorporated by reference into the policy.
(3) An express warranty does not exclude an implied warranty, unless it be inconsistent
therewith, Warranty of 36.-(1) Where insurable property, whether neutrality. ship or goods, is expressly warranted neutral,
mencement of the risk, and that, so far as A.D. 1906. the assured can control the matter, its neutral character shall be preserved during the risk.
(2) Where a ship is expressly warranted “neutra) 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.
37. There is no implied warranty as to the No implied nationality of a ship, or that her nationality warranty of shall not be changed during the risk.
nationality. 38. Where the subject-matter insured is Warranty of warranted “well” or “in good safety
good safety. particular day, it is sufficient if it be safe at any time during that day.
39.-(1) In a voyage policy there is an im- Warranty of plied warranty that at the commencement of seaworthi:
ness of ship. tbe 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 pur. poses 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 sbip 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 unseaworthi.
40.-(1) Iu a policy on goods or othor No implied moveables there is no implied warranty that warranty
that goods the goods or moveables are seaworthy.
(2) In a voyage policy on goods or other worthy. 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.
41. There is an implied warranty that the Warranty of adventure insured is a lawful one, and that, so legality,
there is an implied condition that the property shall have a neutral character at the com
as to com
A.D. 1906. far as the assured can control the matter, the
adventure shall be carried out in a lawful manner.
The Voyage. Implied 42.-(1) Where the subject-matter is insured condition
by a voyage policy “at and from” or “ from mencement a particular place, it is not necessary that the of risk.
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.
(2) The implied condition may be negatived by showing that the delay was caused by circumstances known to the insurer before tbe contract was concluded, or by showing that he
waived the condition. Alteration 43. Where the place of departure is specified of port of
by the policy, and the ship instead of sailing departure,
from that place sails from any other place, the
risk does not attach. Sailing for 44. Where the destination is specified in the different destination.
policy, and the ship, instead of sailing for that destination, sails for any other destination,
the risk does not attach. Change of 45.-(1) Where, after the commencement of voyage, the risk, the destination of the ship is volun.
tarily 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 contem
plated by the policy when the loss occurs. Deviation. 46.—(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(a) Where the course of the voyage is specifically designated by the policy, and
that course is departed from ; or (6) Where the course of the voyage is not specifically designated by the policy, but the usual and customary course is departed
from. (3) The intention to deviate is immaterial; there must be a deviation in fact to discharge the insurer from his liability under the contract.
: 47.-(1) Where several ports of discharge A.D. 1906. are specified by the policy, the ship may pro- Several ceed to all or any of them, but, in the absence ports of of any usage or sufficient cause to the contrary, discharge. she must proceed to them, or such of them as she goes to, in the order designated by the policy. If she does not there is a deviation.
(2) Where the policy is to “ports of discharge,” within a given area, which are not named, the ship must, 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. If she does not there is a deviation.
48. In the case of a voyage policy, the Delay in adventure insured must be prosecuted through- voyage. out its course with reasonable despatch, and, if without lawful excuse it is not so prosecuted, the insurer is discharged from liability as from the time when the delay becaine unreasonable.
49.—(1) Deviation or delay in prosecuting Excuses for the voyage contemplated by the policy is
delay. excused(a) Where authorised by any special term in
the policy ; or (6) Where caused by circumstances beyond
the control of the master and his employer; or (0) Where reasonably necessary in order to comply with an express or implied war.
ranty ; or (d) Where reasonably necessary for the
safety of the ship or sabject-matter
insured; or (e) 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 sbip; or (g) Where caused by the barratrous conduct of the master or crew, if barratry be one of
the perils insured against. (2) When the cause excusing the deviation or delay ceases to operate, the ship must resume her course, and prosecute her voyage, with reasonable despatch.
Assignment of Policy. 50.-(1) A marine policy is assignable unless When and it contains terms expressly prohibiting assign
is assignment. It may be assigned either before or able. after loss.
(2) Where a marire policy has been assigned so as to pass the beneficial interest in such policy, the assignee of the policy is entitled to sue thereon in his own name; and the defendant is entitled to make any defence arising out of the contract which he would have been entitled to make if the action had
A.D. 1906. been brought in the name of the person by or the assured, but, unless the policy other. JA.D. 1906. on behalf of whom the policy was effected.
wise provides, he is liable for any loss (3) A marine policy may be assigned by proximately caused by a peril insured indorsement thereon or in other customary against, even though the loss would
not have happened but for the misdeured 51. Where the assured has parted with or
conduct or negligence of the master who has no lost his interest in the subject matter insured,
or crew; not assign. and has not, before or at the time of so doing,
(6) Unless the policy otherwise provides, expressly or impliedly agreed to assign the
the insurer on ship or goods is not liable policy, any subsequent assignment of the policy for any loss proximately caused by delay, is inoperative;
although the delay be caused by a peril Provided tbat nothing in this section affects
insured against; the assignment of a policy after loss.
(c) Unless the policy otherwise provides,
the insurer is not liable for ordinary The Premium.
wear and tear, ordinary leakage and 52. Unless otherwise agreed, the duty of
breakage, inherent vice or nature of the nium pay. the assured or his agent to pay the premium,
subject matter insured, or for any loss and the duty of the insurer to issue the policy
proximately caused by rats or vermin, to the assured or his agent, are concurrent con
or for any injury to machinery not ditions, and the insurer is not bound to issue
proximately caused by maritime perils. the policy until payment or tender of the
56.-—(1) A loss may be either total or partial. Partial and premium.
Any loss other than a total loss, as hereinafter total loss. Poliey 53.-(1) Unless otherwise agreed, where a defined, is a partial loss. edected through
marine policy is effected on behalf of the (2) A total loss may be either an actual total broker, assured by a broker, the broker is directly logs, or a constructive total loss.
responsible to the insurer for the premium, (3) Unless a different intention appears from
(4) Where the assured brings an action for
a total loss and the evidence proves only a
57.-(1) Where the subject matter insured is Actual total had reason to believe that such person was only
destroyed, or so damaged as to cease to be a loss.
thivg of the kind insured, or where the assured an agent.
is irretrievably deprived thereof, there is an
of the assured by a broker acknowledges the (2) In the case of an actual total logs no
58. Where the ship concerned in the adven- Missing as between the insurer and broker.
ture is missing, and after the lapse of a
ship. reasonable time no news of her has been Loss and Abandonment.
received, an actual total loss may be presumed. Ineladed 55.-(1) Subject to the provisions of this 59. Where, by a peril insured against, the Effect of and er eluded
Act, and unless the policy otherwise provides voyage is interrupted at an intermediate port ment, &e.
or in transhipping them, and sending them on
to their destination, the liability of the insurer
attributable to the wilful misconduct of transhipment.
VOL. LXXXVI.-Law Jour. Stat.