Marine Insurance Act


Published: 1961

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Marine Insurance Act


1988 Revised Edition






C
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MARINE INSURANCE ACT

Marine Insurance Act CAP. 144 Arrangement of Sections




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C
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MARINE INSURANCE ACT

Arrangement of Sections
Section
1 Short title..........................................................................................................7
MARINE INSURANCE .......................................................................................7
2 Marine insurance defined.................................................................................7
3 Marine adventure and maritime perils defined ................................................8
INSURABLE INTEREST ....................................................................................8
4 Avoidance of wagering or gaming contracts. ..................................................8
5 Insurable interest defined.................................................................................9
6 When interest must attach. ...............................................................................9
7 Defeasible or contingent interests. ...................................................................9
8 Partial interest. .................................................................................................9
9 Re-insurance. ...................................................................................................9
10 Bottomry. .......................................................................................................10
11 Master's and seamen's wages. ........................................................................10
12 Advance freight..............................................................................................10
13 Charges of insurance......................................................................................10
14 Quantum of interest. ......................................................................................10
15 Assignment of interest. ..................................................................................10
INSURABLE VALUE ........................................................................................11
16 Measure of insurable value. ...........................................................................11
DISCLOSURE AND REPRESENTATION........................................................11
17 Insurance is uberrimae fidei...........................................................................11
18 Disclosure assured. ........................................................................................11

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19 Disclosure by agent. effecting insurance........................................................12
20 Representations pending negotiation of contract. ..........................................12
21 When contract is deemed to be concluded. ....................................................13
THE POLICY ....................................................................................................13
22 Contract must be embodied in policy.............................................................13
23 What policy must specify. ..............................................................................13
24 Signature of insurer. .......................................................................................14
25 Voyage and time policies. ..............................................................................14
26 Designation of subject matter.........................................................................14
27 Valued policy. ................................................................................................14
28 Unvalued policy. ............................................................................................15
29 Floating policy by ship or ships. ....................................................................15
30 Construction of terms in policy. .....................................................................15
31 Premium to be arranged. ................................................................................15
32 Double insurance............................................................................................16
WARRANTIES .................................................................................................16
33 Nature of warranty. ........................................................................................16
34 When breach of warranty excused. ................................................................17
35 Express warranties..........................................................................................17
36 Warranty of neutrality. ...................................................................................17
37 No implied warranty, of nationality. ..............................................................17
38 Warranty of good safety. ................................................................................18
39 Warranty of seaworthiness of ship. ................................................................18
40 No implied warranty that goods are seaworthy..............................................18
41 Warranty of legality. ......................................................................................18
THE VOYAGE ..................................................................................................19
42 Implied condition as to commencement of risk. ............................................19
43 Alteration of port of departure. ......................................................................19
44 Sailing for different destination......................................................................19
45 Change of voyage...........................................................................................19
46 Deviation. .......................................................................................................19
47 Several ports of discharge. .............................................................................20
48 Delay in voyage..............................................................................................20
49 Excuses for deviation or delay. ......................................................................20
ASSIGNMENT OF POLICY..............................................................................21
50 When and how policy is assignable. ..............................................................21
51 Assured who has no interest cannot assign. ...................................................21
THE PREMIUM ................................................................................................21
52 When premium payable. ................................................................................21
53 Policy effected through broker. ......................................................................21

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54 Effect of receipt of policy. .............................................................................22
LOSS AND ABANDONMENT ..........................................................................22
55 Included and excluded losses.........................................................................22
56 Partial and total loss. ......................................................................................23
57 Actual total loss. ............................................................................................23
58 Missing ship. ..................................................................................................23
59 Effect of transhipment, etc. ............................................................................23
60 Constructive total loss defined.......................................................................23
61 Effect of constructive total loss......................................................................24
62 Notice of abandonment. .................................................................................24
63 Effect of abandonment...................................................................................25
PARTIAL LOSS (INCLUDING SALVAGE AND GENERAL AVERAGE
AND PARTICULAR CHARGES) ......................................................................25
64 Particular average loss. ..................................................................................25
65 Salvage charges..............................................................................................26
66 General average loss. .....................................................................................26
MEASURE OF INDEMNITY.............................................................................27
67 Extent of liability of insurer for loss. .............................................................27
68 Total loss........................................................................................................27
69 Partial loss of ship..........................................................................................27
70 Partial loss of freight......................................................................................28
71 Partial loss of goods, merchandise, etc. .........................................................28
72 Appointment of valuation. .............................................................................28
73 General average contributions and salvage charges. .....................................29
74 Liabilities to third parties. ..............................................................................29
75 General provisions as to measure of indemnity. ............................................29
76 Particular average warranties. ........................................................................30
77 Successive losses. ..........................................................................................30
78 Suing and labouring clause. ...........................................................................30
79 Right of subrogation. .....................................................................................31
80 Right of contribution......................................................................................31
81 Effect of under insurance. ..............................................................................31
82 Enforcement of return. ...................................................................................32
83 Return by agreement. .....................................................................................32
84 Return for failure of consideration.................................................................32
MUTUAL INSURANCE.....................................................................................33
85 Modification of act in case of mutual insurance. ...........................................33
SUPPLEMENTAL.............................................................................................33
86 Ratification by assured...................................................................................33
87 Implied obligations varied by agreement or usage. .......................................33

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88 Reasonable time, etc., a Question of fact .......................................................34
89 Slips as evidence. ...........................................................................................34
90 Interpretation of terms. ...................................................................................34
91 Savings. ..........................................................................................................34
92 Prohibition of gambling on loss by maritime perils .......................................34


SCHEDULE 36


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C
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MARINE INSURANCE ACT

Act No. 6 of 1961

AN ACT TO DECLARE THE LAW RELATING TO
MARINE INSURANCE

Commencement [2nd November, 1961]

1 Short title.
This Act may be cited as the Marine Insurance Act.

MARINE INSURANCE

2 Marine insurance defined.
(1) A contract of marine insurance is a contract whereby the insurer

undertakes to indemnify the assured, in manner and to the extent thereby
agreed, against marine losses, that is to say, the losses incident to
marine adventure.

(2) 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 be incidental to any sea voyage.

(3) Where a ship in course of building, or the launch of a ship, or any
adventure analogues 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

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Act shall alter or affect any rule of law applicable to any contract of
insurance other than a contract of marine insurance as by this Act defined.

3 Marine adventure and maritime perils defined
(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 is in this Act referred to as “insurance 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.

“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.

INSURABLE INTEREST

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

(2) A contract of marine insurance is 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.

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5 Insurable interest defined.
(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 by damage thereto, or by the detention thereof, or may incur
liability in respect thereof.

6 When interest must attach.
(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:

Provided that where the subject-matter is insured “lost or not lost”, the
assured may recover although he may not have acquired his interest until
after the loss, unless at the time of effecting the contract of insurance the
assured was aware of the loss, and the insurer was not.

(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.

7 Defeasible or contingent interests.
(1) A defeasible interest is insurable, as also is 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 the seller's risk, by reason of
the latter's delay in making delivery or otherwise.

8 Partial interest.
A partial interest of any nature is insurable.

9 Re-insurance.
(1) The insurer under a contract of marine insurance has an insurable interest

in his risk, and may re-insure in respect of it.

(2) Unless the policy otherwise provides, the original assured has no right or
interest in respect of such re-insurance.

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10 Bottomry.
The lender of money on bottomry or respondentia has an insurable interest in
respect of the loan.

11 Master's and seamen's wages.
The master or any member of the crew of a ship has an insurable interest in
respect of his wages.

12 Advance freight.
In the case of advance freight, the person advancing the freight has an insurable
interest, in so far as such freight is not repayable in case of loss.

13 Charges of insurance.
The assured has an insurable interest in the charges of any insurance which he
may effect.

14 Quantum of interest.
(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.

15 Assignment of interest.
Where the assured assigns or otherwise parts with his interest in the subject-
matter insured, he does not thereby transfer to the assignee his rights under the
contract of insurance, unless there be an express or implied agreement with the
assignee to that effect.

But the provisions of this section do not affect a transmission of interest by
operation of law.

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INSURABLE VALUE

16 Measure of insurable value.
Subject to any express provision or valuation in the policy, the insurable value of
the subject-matter insured must be ascertained as follows —

(1) In insurance on ship, the insurable value 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;

The insurable value, 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;

(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
insurance.

DISCLOSURE AND REPRESENTATION

17 Insurance is uberrimae fidei.
A contract of marine insurance is a contract based upon the utmost good faith,
and, if the utmost good faith be not observed by either party, the contract may be
avoided by the other party.

18 Disclosure assured.
(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 assured, and the assured is 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 void the contract.

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(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 circumstances 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 knowledge, and 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 it is superfluous to disclose by reason of

any express or implied warranty.

(4) Whether any particular circumstances, 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 Disclosure by agent effecting insurance.
Subject to the provisions of the preceding section of this Act as to the
circumstances which need not be disclosed, where an insurance is effected for
the assured by an agent, the agent must disclose to the insurer —

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

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

20 Representations pending negotiation of contract.
(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, must be true. 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.

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(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 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 be made
in good faith.

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

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

21 When contract is deemed to be concluded.
A contract of marine insurance is deemed to be concluded when the proposal of
the assured is accepted by the insurer, whether the policy be then issued or not;
and, for the 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.

THE POLICY

22 Contract must be embodied in policy.
Subject to the provisions of any Act, a contract of marine insurance is
inadmissible in evidence unless it is embodied in a marine 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 What policy must specify.
A marine policy must specify —

(a) the name of the assured or of some person who effects the
insurance on his behalf;

(b) the subject-matter insured and the risk insured against;
(c) the voyage, or period of time, or both, as the case may be, covered

by the insurance;
(d) the sum or sums insured; and
(e) the name or names of the insurers.

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24 Signature of insurer.
(1) A marine policy must be signed by 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, constitutes a distinct
contract with the assured.

25 Voyage and time policies.
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.

26 Designation of subject matter.
(1) The subject-matter insured must be designated in a marine policy with

reasonable certainty.

(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 subject-matter 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.

27 Valued policy.
(1) A policy may be either valued or unvalued.

(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 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
be total or partial.

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(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.

28 Unvalued policy.
An unvalued policy is a policy which 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 subsequently ascertained, in the manner hereinbefore specified.

29 Floating policy by ship or ships.
(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 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 loss or arrival, provided the
omission of 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 must be treated as an
unvalued policy as regards the subject-matter of that declaration.

30 Construction of terms in policy.
(1) A policy may be in the form in the Schedule to this Act.

(2) Subject to the provisions of this Act, and unless the context of the policy
otherwise requires, the terms and expressions mentioned in the Schedule
to this Act shall be construed as having the scope and meaning in that
schedule assigned to them.

31 Premium to be arranged.
(1) Where an insurance is effected at a premium to be arranged, and no

arrangement is made, a reasonable premium is payable.

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(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 is payable.

32 Double insurance.
(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 is not entitled to receive any sum in excess of the
indemnity allowed by this Act;

(b) where the policy under which the assured claims is a valued policy,
the assured must 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 any other policy;

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

WARRANTIES

33 Nature of warranty.
(1) A warranty, in the following sections 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 condition shall be fulfilled, or whereby he affirms or negatives the
existence of a particular 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 without prejudice to any liability incurred by him before that
date.

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34 When breach of warranty excused.
(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 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 the insurer.

35 Express warranties.
(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 must be included in, or written upon, the policy, or
must be contained in some document incorporated by reference to the
policy.

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

36 Warranty of neutrality.
(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.

37 No implied warranty, of nationality.
There is no implied warranty as to the nationality of a ship, or that her
nationality shall not be changed during the risk.

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38 Warranty of good safety.
Where the subject-matter insured is warranted “well” or “in good safety” on a
particular day, it is sufficient if it be safe at any time during that day.

39 Warranty of seaworthiness of ship.
(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.

40 No implied warranty that goods are seaworthy.
(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.

41 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.

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THE VOYAGE

42 Implied condition as to commencement of risk.
(1) Where the subject-matter is measured 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.

(2) The implied conditions 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.

43 Alteration of port of departure.
Where the place of departure is specified by the policy, and the ship instead of
sailing from that place sails from any other place, the risk does not attach.

44 Sailing for different destination.
Where the destination is specified in the policy, and the ship, instead of sailing
for that destination, sails for any other destination, the risk does not attach.

45 Change of voyage.
(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 loss occurs.

46 Deviation.
(1) Where a ship, without lawful excuse, deviates from the voyages

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 —

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(a) where the course of the voyage is specifically designated by the
policy, and that course is departed from; or

(b) 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 Several ports of discharge.
(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 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 Delay in voyage.
In the case of a voyage policy, the adventure insured must be prosecuted
throughout its course with reasonable dispatch, and if without lawful excuse it is
not so prosecuted, the insurer is discharged from liability as from the time when
the delay became unreasonable.

49 Excuses for deviation or delay.
(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
(d) where reasonably necessary for the safety of the ship or subject-

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 ship; or

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(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
dispatch.

ASSIGNMENT OF POLICY

50 When and how policy is assignable.
(1) A marine policy is assignable unless it contains terms expressly

prohibiting assignment. It may be assigned either before or after loss.

(2) Where a marine 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 been brought in the name of the person by or on behalf of
whom the policy was effected.

(3) A marine policy may be assigned by indorsement thereon or in other
customary manner.

51 Assured who has no interest cannot assign.
Where the assured has parted with or lost his interest in the subject-matter
insured, and has not, before or at the time of so doing, expressly or impliedly
agreed to assign the policy, any subsequent assignment of the policy
is inoperative:

Provided that nothing in this section affects the assignment of a policy after loss.

THE PREMIUM

52 When premium payable.
Unless otherwise agreed, the duty of the assured or his agent to pay the
premium, and the duty of the insurer to issue the policy to the assured or his
agent, are concurrent conditions, and the insurer is not bound to issue the policy
until payment or tender of the premium.

53 Policy effected through broker.
(1) Unless otherwise agreed, where a marine policy is effected on behalf of

the assured by a broker, the broker is directly responsible to the insurer for
the premium, and the insurer is directly responsible to the assured for the

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amount which may be payable in respect of losses, or in respect of
returnable premium.

(2) Unless otherwise agreed, the broker has, as against the assured, a lien
upon the policy for the amount of the premium and his charges in respect
of effecting the policy; and, where he has dealt with the person who
employs him as a principal, he has also a lien on the policy in respect of
any balance on any insurance account which may be due to him from such
person, unless when the debt was incurred he had reason to believe that
such person was only an agent.

54 Effect of receipt of policy.
Where a marine policy effected on behalf of the assured by a broker
acknowledges the receipt of the premium, such acknowledgment is, in the
absence of fraud, conclusive as between the insurer and the assured, but not as
between the insurer and broker.

LOSS AND ABANDONMENT

55 Included and excluded losses.
(1) Subject to the provisions of this Act, and unless the policy otherwise

provides, the insurer is liable for any loss proximately caused by peril
insured against, but, subject as aforesaid, he is not liable for any loss
which is not proximately caused by a peril insured against.

(2) In particular —
(a) the insurer is not liable for any loss attributable to the wilful

misconduct of the assured, but, unless the policy otherwise
provides, he is liable for any loss proximately caused by a peril
insured against, even though the loss would not have happened but
for the misconduct or negligence of the master or crew;

(b) unless the policy otherwise provides, the insurer on ship or goods is
not liable for any loss proximately caused by delay, although the
delay be caused by a peril insured against;

(c) unless the policy otherwise provides, the insurer is not liable for
ordinary wear and tear, ordinary leakage and breakage, inherent
vice or nature of the subject-matter insured, or for any loss
proximately caused by rats or vermin, or for any injury to
machinery not proximately caused by maritime perils.

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56 Partial and total loss.
(1) A loss be either total or partial. Any loss other than a total loss, as

hereinafter defined, is a partial loss.

(2) A total loss may be either an actual total loss, or a constructive total loss.

(3) Unless a different intention appears from the terms of the policy, an
insurance against total loss includes a constructive, as well as an actual
loss, total loss.

(4) Where the assured brings an action for a total loss and the evidence proves
only a partial loss, he may, unless the policy otherwise provides, recover
for a partial loss.

(5) Where goods reach their destination in specie, but by reason of
obliteration of marks, or otherwise, they are incapable of identification,
the loss, if any, is partial, and not total.

57 Actual total loss.
(1) Where the subject-matter insured is destroyed, or so damaged as to cease

to be a thing of the kind insured, or where the assured is irretrievably
deprived thereof, there is an actual total loss.

(2) In the case of an actual loss no notice of abandonment need be given.

58 Missing ship.
Where the ship concerned in the adventure is missing, and after the lapse of a
reasonable time no news of her has been received, an actual total loss may be
presumed.

59 Effect of transhipment, etc.
Where, by a peril insured against, the voyage is interrupted at an intermediate
port or place, under such circumstances as, apart from any special stipulation in
the contract of affreightment, to justify the master in landing and re-shipping the
goods or other moveables, or in transhipping them, and sending them on to their
destination, the liability of the insurer continues notwithstanding the landing or
transhipment.

60 Constructive total loss defined.
(1) Subject to any express provision in the policy, there is a constructive total

loss where the subject-matter insured is reasonably abandoned on account
of its actual total loss appearing to be unavoidable, or because it could not

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be preserved from actual total loss without an expenditure which would
exceed its value when the expenditure has been incurred.

(2) In particular, there is a constructive total loss —
(a) where the assured is deprived of the possession of the ship or goods

by a peril insured against, and (i) it is unlikely that he can recover
the ship or goods, as the case may be, or (ii) the cost of recovering
the ship or goods, as the case may be, would exceed their value
when recovered; or

(b) in the case of damage to a ship, where she is so damaged by a peril
insured against that the total repairing the damage would exceed the
value of the ship when repaired.
In estimating the cost of repairs, no deduction is to be made in
respect of general average contributions to those repairs payable by
other interests, but account is to be taken of the expenses of future
salvage operations and of any future general average contributions
to which the ship would be liable if repaired; or

(c) in the case of damage to goods, where the cost of repairing the
damage and forwarding the goods to their destination would exceed
their value on arrival.

61 Effect of constructive total loss.
Where there is a constructive total loss the assured may either treat the loss as a
partial loss, or abandon the subject-matter insured to the insurer and treat the
loss as if it were an actual total loss.

62 Notice of abandonment.
(1) Subject to the provisions of this section, where the assured elects to

abandon the subject-matter insured to the insurer, he must give notice of
abandonment. If he fails to do so the loss can only be treated as a partial
loss.

(2) Notice of abandonment may be given in writing, or by word of mouth, or
partly in writing and partly by word of mouth, and may be given in any
terms which indicate the intention of the assured to abandon his insured
interest in the subject-matter insured unconditionally to the insurer.

(3) Notice of abandonment must be given with reasonable diligence after the
receipt of reliable information of the loss, but where the information is of
a doubtful character the assured is entitled to a reasonable time to make
inquiry.

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(4) Where notice of abandonment is properly given, the rights of the assured
are not prejudiced by the fact that the insurer refuses to accept the
abandonment.

(5) The acceptance of an abandonment may be either express or implied from
the conduct of the insurer. The mere silence of the insurer after notice is
not an acceptance.

(6) Where notice of abandonment is accepted the abandonment is irrevocable.
The acceptance of the notice conclusively admits liability for the loss and
the sufficiency of the notice.

(7) Notice of abandonment is unnecessary where, at the time when the
assured received information of the loss, there would be no possibility of
benefit to the insurer if notice were given to him.

(8) Notice of abandonment may be waived by the insurer.

(9) Where an insurer has re-insured his risk, no notice of abandonment need
be given by him.

63 Effect of abandonment.
(1) Where there is a valid abandonment the insurer is entitled to take over the

interest of the assured in whatever may remain of the subject-matter
insured, and all proprietary rights incidental thereto.

(2) Upon the abandonment of a ship, the insurer thereof is entitled to any
freight in course of being earned, and which is earned by her subsequent
to the casualty causing the loss, less the expenses of earning it incurred
after the casualty; and, where the ship is carrying the owner's goods, the
insurer is entitled to a reasonable remuneration for the carriage of them
subsequent to the casualty causing the loss.

PARTIAL LOSS (INCLUDING SALVAGE AND GENERAL AVERAGE
AND PARTICULAR CHARGES)

64 Particular average loss.
(1) A particular average loss is a partial loss of the subject-matter insured,

caused by a peril insured against, and which is not a general average loss.

(2) Expenses incurred by or on behalf of the assured for the safety or
preservation of the subject-matter insured, other than general average and
salvage charges, are called particular charges. Particular charges are not
included in particular average.

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65 Salvage charges.
(1) Subject to any express provisions in the policy, salvage charges incurred

in preventing a loss by perils insured against may be recovered as a loss
by those perils.

(2) “Salvage charges” means the charges recoverable under maritime law by a
salvor independently of contract. They do not include the expenses of
services in the nature of salvage rendered by the assured or his agents, or
any person employed for hire by them, for the purpose of averting a peril
insured against. Such expenses, where properly incurred, may be
recovered as particular charges or as a general average loss, according to
the circumstances under which they were incurred.

66 General average loss.
(1) A general average loss is a loss caused by or directly consequential on a

general average act. It includes a general average expenditure as well as a
general average sacrifice.

(2) There is a general average act where any extraordinary sacrifice or
expenditure is voluntarily and reasonably made or incurred in time of peril
for the purpose of preserving the property imperilled in the common
adventure.

(3) Where there is a general average loss, the party on whom it falls is
entitled, subject to the conditions imposed by maritime law, to a rateable
contribution from the other parties interested, and such contribution is
called a general average contribution.

(4) Subject to any express provision in the policy, where the assured has
incurred a general average expenditure, he may recover from the insurer
in respect of the proportion of the loss which falls upon him; and, in the
case of a general average sacrifice, he may recover from the insurer in
respect of the whole loss without having enforced his right of contribution
from the other parties liable to contribute.

(5) Subject to any express provisions in the policy, where the assured has
paid, or is liable to pay, a general average contribution in respect of the
subject insured, he may recover therefor from the insurer.

(6) In the absence of express stipulation, the insurer is not liable for any
general average loss or contribution where the loss was not incurred for
the purpose of avoiding, or in connection with the avoidance of, a peril
insured against.

(7) Where ship, freight, and cargo, or any two of those interests, are owned by
the same assured, the liability of the insurer in respect of general average

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losses or contributions is to be determined as if those subjects were owned
by different persons.

MEASURE OF INDEMNITY

67 Extent of liability of insurer for loss.
(1) The sum which the assured can recover in respect of a loss on a policy by

which he is insured, in the case of an unvalued policy to the full extent of
the insurable value, or, in the case of a valued policy to the full extent of
the value fixed by the policy, is called the measure of indemnity.

(2) Where there is a loss recoverable under the policy, the insurer, or each
insurer if there be more than one, is liable for such proportion of the
measure of indemnity as the amount of his subscription bears to the value
fixed by the policy in the case of a valued policy, or to the insurable value
in the case of an unvalued policy.

68 Total loss.
Subject to the provisions of this Act and to any express provision in the policy,
where there is a total loss of the subject matter insured —

(1) if the policy be a valued policy, the measure of indemnity is the sum fixed
by the policy;

(2) if the policy be an unvalued policy, the measure of indemnity is the
insurable value of the subject-matter insured.

69 Partial loss of ship.
Where a ship is damaged, but is not totally lost, the measure of indemnity,
subject to any express provision in the policy, is as follows —

(1) Where the ship has been repaired, the assured is entitled to the reasonable
cost of the repairs, less the customary deductions, but not exceeding the
sum insured in respect of any one casualty;

(2) Where the ship has been only partially repaired, the assured is entitled to
the reasonable cost of such repairs, computed as above, and also to be
indemnified for the reasonable depreciation, if any, arising from the
unrepaired damage, provided that the aggregate amount shall not exceed
the cost of repairing the whole damage, computed as above;

(3) Where the ship has not been repaired, and has not been sold in her
damaged state during the risk, the assured is entitled to be indemnified for
the reasonable depreciation arising from the unrepaired damage, but not

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exceeding the reasonable cost of repairing such damage, computed as
above.

70 Partial loss of freight.
Subject to any express provision in the policy, where there is a partial loss of
freight, the measure of indemnity is such proportion of the sum fixed by the
policy in the case of a valued policy, or of the insurable value in the case of an
unvalued policy, as the proportion of freight lost by the assured bears to the
whole freight at the risk of the assured under the policy.

71 Partial loss of goods, merchandise, etc.
Where there is a partial loss of goods, merchandise, or other moveables, the
measure of indemnity, subject to any express provision in the policy, is as
follows —

(l) Where part of the goods, merchandise or other moveables insured by a
valued policy is totally lost, the measure of indemnity is such proportion
of the sum fixed by the policy as the insurable value of the part lost bears
to the insurable value of the whole, ascertained as in the case of an
unvalued policy;

(2) Where part of the goods, merchandise, or moveables insured by an
unvalued policy is totally lost, the measure of indemnity is the insurable
value of the part lost, ascertained as in the case of total loss;

(3) Where the whole or any part of the goods or merchandise insured has
been delivered damaged at its destination, the measure of indemnity is
such proportion of the sum fixed by the policy in the case of a valued
policy, or of the insurable value in the case of an unvalued policy, as the
difference between the gross sound and damaged values at the place of
arrival bears to the gross sound value;

(4) “Gross value” means the wholesale price or, if there be no such price, the
estimated value, with, in either case, freight, landing charges, and duty
paid beforehand, provided that, in the case of goods or merchandise
customarily sold in bond, the bonded price is deemed to be the
gross value.

“Gross proceeds” means the actual price obtained at a sale where all
charges on sale are paid by the sellers.

72 Appointment of valuation.
(1) Where different species of property are insured under a single valuation,

the valuation must be apportioned over the different species in proportion

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to their respective insurable values, as in the case of an unvalued policy.
The insured value of any part of a species is such proportion of the total
insured value of the same as the insurable value of the part bears to the
insurable value of the whole, ascertained in both cases as provided by
this Act.

(2) Where a valuation has to be apportioned, and particulars of the prime cost
of each separate species, quality, or description of goods cannot be
ascertained, the division of the valuation may be made over the net arrived
sound values of the different species, qualities, or descriptions of goods.

73 General average contributions and salvage charges.
(1) Subject to any express provision in the policy, where the assured has paid,

or is liable for, any general average contribution, the measure of
indemnity is the full amount of such contribution, if the subject-matter
liable to contribution is insured for its full contributory value; but, if such
subject-matter be not insured for its full contributory value, or if only part
of it be insured, the indemnity payable by the insurer must be reduced in
proportion to the under insurance, and where there has been a particular
average loss which constitutes a deduction from the contributory value,
and for which the insurer is liable, that amount must be deducted from the
insured value in order to ascertain what the insurer is liable to contribute.

(2) Where the insurer is liable for salvage charges the extent of his liability
must be determined on the like principle.

74 Liabilities to third parties.
Where the assured has effected an insurance in express terms. against any
liability to a third party, the measure of indemnity, subject to any express
provision in the policy, is the amount paid or payable by him to such third party
in respect of such liability.

75 General provisions as to measure of indemnity.
(1) Where there has been a loss in respect of any subject-matter not expressly

provided for in the foregoing provisions of this Act, the measure of
indemnity shall be ascertained, as nearly as may be, in accordance with
those provisions, in so far as applicable to the particular case.

(2) Nothing in the provisions of this Act relating to the measure of indemnity
shall affect the rules relating to double insurance, or prohibit the insurer
from disproving interest wholly or in part, or from showing that at the
time of the loss the whole or any part of the subject-matter insured was
not at risk under the policy.

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76 Particular average warranties.
(1) Where the subject-matter is warranted free from particular average, the

assured cannot recover for a loss of part, other than a loss incurred by a
general average sacrifice, unless the contract contained in the policy be
apportionable; but, if the contract be apportionable, the assured may
recover for a total loss of any apportionable part.

(2) Where the subject-matter insured is warranted free from particular
average, either wholly or under a certain percentage, the insurer is
nevertheless liable for salvage charges, and for particular charges and
other expenses properly incurred pursuant to the provisions of the suing
and labouring clause in order to avert a loss insured against.

(3) Unless the policy otherwise provides, where the subject-matter insured is
warranted free from particular average under a specified percentage, a
general average loss cannot be added to a particular average loss to make
up the specified percentage.

(4) For the purpose of ascertaining whether the specified percentage has been
reached, regard shall be had only to the actual loss suffered by the subject-
matter insured. Particular charges and the expenses of and incidental to
ascertaining and proving the loss must be excluded.

77 Successive losses.
(1) Unless the policy otherwise provides, and subject to the provisions of this

Act, the insurer is liable for successive losses, even though the total
amount of such losses may exceed the sum insured.

(2) Where, under the same policy, a partial loss, which has not been repaired
or otherwise made good, is followed by a total loss, the assured can only
recover in respect of the total loss:

Provided that nothing in this section shall affect the liability of the insurer
under the suing and labouring clause.

78 Suing and labouring clause.
(1) Where the policy contains a suing and labouring clause, the engagement

thereby entered into is deemed to be supplementary to the contract of
insurance, and the assured may recover from the insurer any expenses
properly incurred pursuant to the clause, notwithstanding that the insurer
may have paid for a total loss, or that the subject-matter may have been
warranted free from particular average, either wholly or under a certain
percentage.

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(2) General average losses and contributions and salvage charges, as defined
by this Act are not recoverable under the suing and labouring clause.

(3) Expenses incurred for the purpose of averting or diminishing any loss not
covered by the policy are not recoverable under the suing and labouring
clause.

(4) It is the duty of the assured and his agents, in all cases, to take such
measures as may be reasonable for the purpose of averting or minimising
a loss.

79 Right of subrogation.
(1) Where the insurer pays for a total loss, either of the whole, or in the case

of goods of any apportionable part, of the subject-matter insured, he
thereupon becomes entitled to take over the interest of the assured in
whatever may remain of the subject-matter so paid for, and he is thereby
subrogated to all the rights and remedies of the assured in and in respect
of that subject-matter as from the time of the casualty causing the loss.

(2) Subject to the foregoing provisions, where the insurer pays for a partial
loss, he acquired no title to the subject-matter insured, or such part of it as
may remain, but he is thereupon subrogated to all rights and remedies of
the assured in and in respect of the subject-matter insured as from the time
of the casualty causing the loss, in so far as the assured has been
indemnified, according to this Act, by such payment for the loss.

80 Right of contribution.
(1) Where the assured is over-insured by double insurance, each insurer is

bound, as between himself and the other insurers, to contribute rateably to
the loss in proportion to the amount for which he is liable under his
contract.

(2) If any insurer pays more than his proportion of the loss, he is entitled to
maintain an action for contribution against the other insurers, and is
entitled to the like remedies as a surety who has paid more than his
proportion of the debt.

81 Effect of under insurance.
Where the assured is insured for an amount less than the insurable value or, in
the case of a valued policy, for an amount less than the policy valuation, he is
deemed to be his own insurer in respect of the uninsured balance.

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82 Enforcement of return.
Where the premium or a proportionable part thereof is, by this Act, declared to
be returnable —

(a) if already paid, it may be recovered by the assured from the
insurer; and

(b) if unpaid, it may be retained by the assured or his agent.

83 Return by agreement.
Where the policy contains a stipulation for the return of the premium, or a
proportionate part thereof, on the happening of a certain event, and that event
happens, the premium, or, as the case may be, the proportionate part thereof, is
thereupon returnable to the assured.

84 Return for failure of consideration.
(1) Where the consideration for the payment of the premium totally fails, and

there has been no fraud or illegality on the part of the assured or his
agents, the premium is thereupon returnable to the assured.

(2) Where the consideration for the payment of the premium is apportionable
and there is a total failure of any apportionable part of the consideration, a
proportionate part of the premium is, under the like conditions, thereupon
returnable to the assured.

(3) In particular —
(a) where the policy is void, or is avoided by the insurer as from the

commencement of the risk, the premium is returnable, provided that
there has been no fraud or illegality on the part of the assured; but if
the risk is not apportionable, and has once attached, the premium is
not returnable;

(b) where the subject-matter insured, or part thereof, has never been
imperilled, the premium, or, as the case may be, a proportionate
part thereof, is returnable:
Provided that where the subject-matter has been insured “lost or not
lost” and has arrived in safety at the time when the contract is
concluded, the premium is not returnable unless, at such time, the
insurer knew of the safe arrival;

(c) where the assured has no insurable interest throughout the currency
of the risk, the premium is returnable, provided that this rule does
not apply to a policy effected by way of gaming or wagering;

(d) where the assured has a defeasible interest which is terminated
during the currency of the risk, the premium is not returnable;

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(e) where the assured has ever-insured under an unvalued policy, a
proportionate part of the premium is returnable;

(f) subject to the foregoing provisions, where the assured has over-
insured by double insurance, a proportionate part of the several
premiums is returnable:
Provided that, if the policies are effected at different times, and any
earlier policy has at any time borne the entire risk, or if a claim has
been paid on the policy in respect of the full sum insured thereby,
no premium is returnable in respect of that policy, and when the
double insurance is effected knowingly by the assured no premium
is returnable.

MUTUAL INSURANCE

85 Modification of act in case of mutual insurance.
(1) Where two or more persons mutually agree to insure each other against

marine losses there is said to be a mutual insurance.

(2) The provisions of this Act to the premium do not apply to mutual
insurance, but a guarantee, or such other arrangement as may be agreed
upon, may be substituted for the premium.

(3) The provisions of this Act, in so far as they may be modified by the
agreement of the parties, may in the case of mutual insurance be modified
by the terms of the policies issued by the association, or by the rules and
regulations of the association.

(4) Subject to the exceptions mentioned in this section, the provisions of this
Act apply to a mutual insurance.

SUPPLEMENTAL

86 Ratification by assured.
Where a contract of marine insurance is in good faith effected by one person on
behalf of another, the person on whose behalf it is effected may ratify the
contract even after he is aware of a loss.

87 Implied obligations varied by agreement or usage.
(1) Where any right, duty, or liability would arise under a contract of marine

insurance by implication of law, it may be negatived or varied by express
agreement, or by usage, if the usage be such as to bind both parties to the
contract.

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(2) The provisions of this section extend to any right, duty, of liability
declared by this Act which may be lawfully modified by agreement.

88 Reasonable time, etc., a question of fact
Where by this Act any reference is made to reasonable time, reasonable
premium, or reasonable diligence, the question what is reasonable is a question
of fact.

89 Slips as evidence.
Where there is a duly stamped policy, reference may be made, as heretofore, to
the slip or covering note, in any legal proceeding.

90 Interpretation of terms.
In this Act, unless the context or subject-matter otherwise requires —

“action” includes suit, counter-claim and set-off;

“freight” includes the profit derivable by a shipowner from the
employment of his ship to carry his own goods or moveables, as well as
freight payable by a third party, but does not include passage money;

“moveables” means any moveable tangible property, other than the ship,
and includes money, valuable securities, and other documents; and

“policy” means a marine policy.

91 Savings.
The rules of the common law including the law merchant, save in so far as they
are inconsistent with the express provisions of this Act, shall continue to apply
to contracts of marine insurance.

92 Prohibition of gambling on loss by maritime perils
(1) If —

(a) any person effects a contract of marine insurance without having
any bona fide interest, direct or indirect, either in the safe arrival of
the ship in relation to which the contract is made or in the safety or
preservation of the subject-matter insured, or a bona fide
expectation of acquiring such an interest, or

(b) any person in the employment of the owner of a ship, not being a
part owner of the ship, effects a contract of marine insurance in

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relation to the ship, and the contract 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,

the contract shall be deemed to be a contract by way of gambling on loss
by maritime perils, and the person effecting it shall be guilty of an
offence, and shall be liable, on conviction, to imprisonment for a term not
exceeding 6 months or to a fine not exceeding $200, or to both such fine
and imprisonment and in either case to forfeit to the Crown any money he
may receive under the contract.

(2) Any broker or other person through whom, and any insurer with whom,
any such contract is effected shall be guilty of an offence and liable on
conviction to the like penalties if he acted knowing that the contract was
by way of gambling on loss by maritime perils within the meaning of this
section.

(3) Proceedings under this section shall not be instituted without the consent
of the Prime Minister.

(4) Proceedings shall not be instituted under this section against a person
(other than a person in the employment of the owner of the ship in relation
to which the contract was made) alleged to have effected a contract by
way of gambling on loss by maritime perils until an opportunity has been
afforded him of showing that the contract was not such a contract as
aforesaid, and any information given by that person for that purpose shall
not be admissible in evidence against him in any prosecution under this
section.

(5) If proceedings under this section are taken against any person (other than
a person in the employment of the owner of the ship in relation to which
the contract was made) for effecting such a contract, and the contract was
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, the contract shall be deemed to be a contract by
way of gambling on loss by maritime perils unless the contrary is proved.

(6) For the purpose of giving jurisdiction under this section, every offence
shall be deemed to have been committed either in the place in which the
same actually was committed or in any place in which the offender may
be.

(7) For the purposes of this section the expression “owner” includes charterer.

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SCHEDULE

FORM OF POLICY

Lloyd's S.C. policy.
BE IT KNOWN THAT ……………………. as well in .................................................
own name as for and in the name and names of all and every other person or persons to
whom the same doth, may, or shall appertain, in part or in all doth make assurance and
cause .................................................................................................................................

.................................................................................. and them, and every of them, to be

insured lost or not lost, at and from .................................................................................

Upon any kind of goods and merchandises, and also upon the body, tackle, apparel,
ordinance, munition, artillery, boat, and other furniture, of and in the good ship or
vessel called the ...............................................................................................................

.............................................................................. whereof is master under God, for this

present voyage,. ......................................................................................... or whosoever
else shall go for master in the said ship, or by whatsoever other name or names the said
ship, or the master thereof, is or shall be named or called; beginning the adventure
upon the said goods and merchandises from the loading thereof aboard the said ship,.
...........................................................................................................................................

upon the said ship, etc ……………………………………………………………… and
so shall continue and endure, during her abode there, upon the said ship, etc. And
further, until the said ship, with all her ordnance, tackle, apparel, etc., and goods and
merchandises whatsoever shall be arrived at ...................................................................

upon the said ship, etc., until she hath moored at anchor twenty-four hours in good
safety; and upon the goods and merchandises, until the same be there discharged and
safely landed. And it shall be lawful for the said ship

etc. in

this voyage to proceed and sail to and touch and stay at any ports or places whatsoever
................................................................................ without prejudice to this insurance.
The said ship etc. goods and merchandises etc. for so much as concerns the assured by
agreement between the assured and assurers in this policy are and shall be valued at
...........................................................................................................................................

Touching the adventures and perils which we the assurers are contented to bear and do
take upon us in this voyage: they are of the seas, men of war, fire, enemies, pirates,
rovers, thieves, jettisons, letters of mart and countermart, surprisals, taking at sea,

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arrests, restraints, and detainments of all kings, princes, and people, of what nation
condition or quality soever barratry of the master and mariners and of all other perils
losses and misfortunes that have or shall come to the hurt detriment, or damage of the
said goods and merchandises, and ship, etc., or any part thereof.

(Sue and labour clause).

And in case of any loss or misfortune it shall be lawful to the assured, their factors,
servants and assigns, to sue, labour, and travel for, in and about the defence,
safeguards, and recovery of the said goods and merchandises, and ship, etc., or any part
thereof, without prejudice to this insurance; to the charges whereof we, the assurers,
will contribute each one according to the rate and quantity of his sum herein assured.

(Waiver clause).

And it is especially declared and agreed that no acts of the insurer or insured in
recovering, saving, or preserving the property insured shall be considered as a waiver,
or acceptance of abandonment. And it is agreed by us, the insurers, that this writing or
policy of assurance shall be of as much force and effect as the surest writing or policy
of assurance heretofore made in Lombard Street, or in the Royal Exchange, or
elsewhere in London. And so we, the assurers, are contented, and do hereby promise
and bind ourselves, each one for his own part, our heirs, executors, and goods to the
assured, their executors, administrators, and assigns, for the true performance of the
premises, confessing ourselves paid the consideration due unto us for this assurance by
the assured, at and after the rate of .................................................................................

IN WITNESS whereof we, the assurers, have subscribed our names and sums assured
in London.

(Memorandum).

N.B.---Corn, fish, salt, fruit, flour, and seed are warranted free from average, unless
general, or the ship be stranded--sugar, tobacco, hemp, flax, hides and skins are
warranted free from average, under five pounds per cent, and all other goods, also the
ship and freight, are warranted free from average, under three pounds per cent, unless
general, or the ship be stranded.

RULES FOR CONSTRUCTION OF POLICY
The following are the rules referred to by this Act for the construction of a policy in the
above or other like form, where the context does not otherwise required

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1 Lost or not lost.
Where the subject-matter is insured “lost or not lost”, and the loss has occurred
before the contract is concluded, the risk attaches unless, at such time the
assured was aware of the loss, and the insurer was not.

2 From.
Where the subject-matter is insured “from” a particular place, the risk does not
attach until the ship starts on the voyage insured.

3 At and from (ship).
(a) Where a ship is insured “at and from” a particular place, and she is

at that place in good safety when the contract is concluded, the risk
attaches immediately.

(b) If she be not at that place when the contract is concluded, the risk
attaches as soon as she arrives there in good safety, and, unless the
policy otherwise provides, it is immaterial that she is covered by
another policy for a specific time after arrival.

(Freight).
(c) Where chartered freight is insured “at and from” a particular place,

and the ship is at that place in good safety when the contract is
concluded the risk attaches immediately. If she be not there when
the contract is concluded, the risk attaches as soon as she arrives
there in good safety.

(d) Where freight, other than chartered freight, is payable without
special conditions and is insured “at and from” a particular place,
the risk attaches pro rata as the goods or merchandise are shipped:
provided that if there be cargo in readiness which belongs to the
shipowner, or which some other person has contracted with him to
ship, the risk attaches as soon as the ship is ready to receive such
cargo.

4 From the loading thereof.
Where goods or other movables are insured “from the loading thereof”, the risk
does not attach until such goods or movables are actually on board, and the
insurer is not liable for them while in transit from the shore to the ship.

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5 Safely landed.
Where the risk on goods or other movables continues until they are “safely
landed”, they must be landed in the customary manner and within a reasonable
time after arrival at the port of discharge, and if they are not so landed the risk
ceases.

6 Touch and stay.
In the absence of any further license or usage, the liberty to touch and stay “at
any port or place whatsoever” does not authorise the ship to depart from the
course of her voyage from the port of departure to the port of destination.

7 Perils of the seas.
The term “perils of the seas” refers only to fortuitous accidents or casualties of
the seas. It does not include the ordinary action of the winds and waves.

8 Pirates.
The term “pirates” includes passengers who mutiny and rioters who attack the
ship from the shore.

9 Thieves.
The term “'thieves” does not cover clandestine theft or a theft committed by any
one of the ship's company, whether crew or passengers.

10 Restraint of princes.
The term “arrests, etc., of kings, princes, and people” refers to political or
executive acts, and does not include a loss caused by riot or by ordinary judicial
process.

11 Barratry.
The term “barratry” includes every wrongful act wilfully committed by the
master or crew to the prejudice of the owner, or, as the case may be,
the charterer.

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12 All other perils.
The term “all other perils” includes only perils similar in kind to the perils
specifically mentioned in the policy.

13 Average unless general.
The term “average unless general” means a partial loss of the subject-matter
insured other than a general average loss, and does not include
“particular charges”.

14 Stranded.
Where the ship has stranded, the insurer is liable for the excepted losses,
although the loss is not attributable to the stranding, provided that when the
stranding takes place the risk has attached and, if the policy be on goods, that the
damaged goods are on board.

15 Ship.
The term “ship” includes the hull, materials and outfit, stores and provisions for
the officers and crew, and, in the case of vessels engaged in a special trade, the
ordinary fittings requisite for the trade, and also, in the case of a steamship, the
machinery, boilers, and coals and engine stores, if owned by the assured.

16 Freight.
The term “freight” includes the profit derivable by a shipowner from the
employment of his ship to carry his own goods or moveables, as well as freight
payable by a third party, but does not include passage money.

17 Goods.
The term “goods” means goods in the nature of merchandise and does not
include personal effects or provisions and stores for use on board.

In the absence of any usage to the contrary, deck cargo and living animals must
be insured specifically, and not under the general denomination of goods.

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