MARINE INSURANCE LEGISLATION FOURTH EDITION LLOYD’S SHIPPING LAW LIBRARY The Law of Shipbuilding Contracts third edition by Simon Curtis (2002) The Law of Tug and Tow second edition by Simon Rainey (2002) Admiralty Jurisdiction and Practice third edition by Nigel Meeson (2003) Merchant Shipping Legislation second edition by Aengus R. M. Fogarty (2004) Laytime and Demurrage fifth edition by John Schofield (2005) Marine War Risks third edition by Michael D. Miller (2005) Bareboat Charters second edition by Mark Davis (2005) Limitation of Liability for Maritime Claims fourth edition by Patrick Griggs, Richard Williams and Jeremy Farr (2005) Enforcement of Maritime Claims fourth edition by D. C. Jackson (2005) Berlingieri on Arrest of Ships fourth edition by Francesco Berlingieri (2006) Bills of Lading by Richard Aikens, Richard Lord and Michael Bools (2006) Voyage Charters third edition by Julian Cooke, Timothy Young, Q.C., Andrew Taylor, John D. Kimball, David Martowski and LeRoy Lambert (2007) Time Charters sixth edition by Terence Coghlin, Andrew W. Baker, Julian Kenny and John D. Kimball (2008) Ship Sale & Purchase fifth edition by Iain Goldrein, Q.C., and Paul Turner (2008) Shipping and the Environment second edition by Colin de la Rue and Charles B. Anderson (2009) Ship Registration: Law and Practice second edition by Richard Coles and Edward Watt (2009) Marine Cargo Insurance by John Dunt (2009) London Maritime Arbitration third edition by Clare Ambrose and Karen Maxwell (2009) Marine Insurance Legislation By Robert Merkin, LLB, LLM Lloyd’s Law Reports Professor of Commercial Law University of Southampton Consultant Barlow Lyde & Gilbert Fourth Edition Lloyd’s List Law Mortimer House 37-41 Mortimer Street London W1T 3JH [email protected] An Informa business First published as Annotated Marine Insurance Legislation 1997 First edition 1997 Second edition 2000 Third edition 2005 Fourth edition 2010 © Robert Merkin 1997, 2000, 2005, 2010 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ISBN 978 1 84311 875 6 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Lloyd’s List Law. Whilst every effort has been made to ensure that the information contained in this publication is correct, neither the author nor Lloyd’s List Law can accept any responsibility for any errors or omissions or for any consequences arising therefrom. Typeset in 10/11 Plantin by Interactive Sciences Ltd, Gloucester Printed in Great Britain by MPG Books, Bodmin, Cornwall Printed on paper sourced from managed forests Preface to Fourth Edition The third edition of Marine Insurance Legislation was published in 2005. Since that date, much has happened in the marine insurance world. The Institute Cargo Clauses have been revised and the new version came into force on 1 January 2009, the first revision for over 25 years. The new clauses have been included in the appendices and cross-referred to in the annotations at appropriate points. There have been significant decisions from the English courts on virtually every aspect of marine insurance law. The usual suspects—utmost good faith and warranties—have provided their fair share of fresh case law, and there have been important rulings on some of the more obscure parts of the Marine Insurance Act 1906, notably the sections dealing with abandonment and subrogation. The author has taken the opportunity in this edition to expand coverage to other common law jurisdictions, and the leading cases from Australia, Canada, Hong Kong, New Zealand and Singapore have been added to the annotations. There is also reference to Report No 91 of the Australian Law Reform Commission, which undertook a thorough review of the operation of the equivalent legislation in Australia and made modest (and as yet unimplemented) proposals for its reform. English authorities nevertheless remain by far the most numerous. To make the book more accessible to readers in other common law jurisdictions, my Southampton colleague Johanna Hjalmarsson has prepared a table of equivalences which takes in the more or less identical Marine Insurance Acts in each of those jurisdictions. My thanks are due to Johanna not just for that work but for her general assistance in the preparation of this edition. I also owe thanks to the Informa team for commissioning a fourth edition and then dealing with the production process so swiftly and efficiently. The law is stated as at September 2009. Rob Merkin November 2009 Contents Preface to Fourth Edition Table of Cases Introduction History of Marine Insurance Legislation The Marine Insurance Act 1906 Marine Insurance Market Practice International Reception MARINE INSURANCE ACT 1906 Marine insurance 1. Marine insurance defined 2. Mixed sea and land risks 3. Marine adventure and maritime perils defined Insurable interest 4. Avoidance of wagering or gaming contracts 5. Insurable interest defined 6. When interest must attach 7. Defeasible or contingent interest 8. Partial interest 9. Re-insurance 10. Bottomry 11. Master's and seamen's wages 12. Advance freight 13. charges of insurance 14. Quantum of interest 15. Assignment of interest Insurable value 16. Measure of insurable value Disclosure and representations 17. Insurance isy uberrimae fidei 18. Disclosure by assured 19. Disclosure by agent effecting insurance 20. Representations pending negotiation of contract 21. When contract is deemed to be concluded The policy 22. contract must be embodied in policy 23. What policy must specify 24. Signature of insurer 25. Voyage and time policies 26. Designation of subject-matter 27. Valued policy 28. Unvalued policy 29. Floating policy by ship or ships 30. Construction of terms in policy 31. Premium to be arranged Double insurance 32. Double insurance Warranties, etc 33. Nature of warranty 34. When breach of warranty excused 35. Express warranties 36. Warranty of neutrality 37. No implied warranty of nationality 38. Warranty of good safety 39. Warranty of seaworthiness of ship 40. No implied warranty that goods are seaworthy 41. Warranty of legality The voyage 42. Implied condition as to commencement of risk 43. Alteration of port of departure 44. Sailing for different destination 45. Change of voyage 46. Deviation 47. Several ports of discharge