Marine Insurance Act (S.C. 1993, c. 22)

Marginal note:Warranty of seaworthiness of ship in voyage policy

• 37 (1) There is an implied warranty in every voyage policy that, at the commencement of the voyage, the ship will be seaworthy for the purpose of the particular marine adventure insured.

• Marginal note:Warranty of fitness against perils of the port

  (2) Where a voyage policy attaches while the ship is in port, there is an implied warranty in the policy that the ship will, at the commencement of the risk, be reasonably fit to encounter the ordinary perils of the port.

• Marginal note:Warranty of fitness for each stage of voyage

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

• Marginal note:No implied warranty of seaworthiness in time policy

  (4) There is no implied warranty in any time policy that the ship will be seaworthy at any stage of the marine adventure, but where, with the privity of the insured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness.

• Marginal note:When ship deemed seaworthy

  (5) A ship is deemed to be seaworthy if it is reasonably fit in all respects to encounter the ordinary perils of the seas of the marine adventure insured.

Marginal note:No implied warranty that goods are seaworthy

• 38 (1) There is no implied warranty in any marine policy on insurable property, other than a ship, that the insurable property is seaworthy.

• Marginal note:Voyage policy on goods

  (2) There is an implied warranty in every voyage policy on insurable property, other than a ship, that, at the commencement of the voyage, the ship is seaworthy and reasonably fit to carry the insurable property to the destination contemplated by the policy.

Marginal note:Compliance with warranty

• 39 (1) Subject to this section, a warranty must be exactly complied with, whether or not it is material to the risk.

• Marginal note:Effect of breach of warranty

  (2) Subject to any express provision in the marine policy or any waiver by the insurer, where a warranty is not exactly complied with, the breach of the warranty discharges the insurer from liability for any loss occurring on or after the date of the breach, but does not affect any liability incurred by the insurer before that date.

• Marginal note:Breach of warranty of good safety

  (3) A warranty that the subject-matter insured is “well” or “in good safety” on a particular day is not breached if the subject-matter is safe at any time during that day.

• Marginal note:When breach of warranty excused

  (4) A breach of a warranty is excused if, because of a change of circumstances, the warranty ceases to be applicable to the circumstances contemplated by the contract or if compliance with the warranty is rendered unlawful by any subsequent law.

• Marginal note:Limit on defence to breach of warranty

  (5) It is no defence to a breach of a warranty that the breach was remedied and the warranty complied with before any loss was incurred.

The Voyage

Marginal note:Implied condition as to commencement

• 40 (1) Where the subject-matter is insured by a voyage policy, the ship need not, when the contract is concluded, be at the place at and from, or from, which the subject-matter is insured, but there is an implied condition in the policy that the marine adventure will commence within a reasonable time and, if it is not so commenced, the insurer may avoid the contract.

• Marginal note:Exception

  (2) The implied condition may be negated by establishing that the delay was caused by circumstances known to the insurer before the contract was concluded or that the insurer waived the condition.

Marginal note:Change of port of departure

• 41 (1) Where the place of departure is specified by a marine policy and the ship sails from a different place, the risk does not attach.

• Marginal note:Change of destination

  (2) Where the destination is specified by a marine policy and the ship sails for a different destination, the risk does not attach.

Marginal note:Change of voyage

• 42 (1) Unless a marine policy otherwise provides, a change of voyage discharges the insurer from liability for any loss occurring on or after the time when the intention to change is manifested, whether or not the ship has in fact left the course of voyage contemplated by the policy when the loss occurs.

• Marginal note:Idem

  (2) There is a change of voyage where, after the commencement of the risk, the destination of the ship is voluntarily changed from that contemplated by the marine policy.

Marginal note:Deviation from voyage

• 43 (1) A deviation without lawful excuse from the voyage contemplated by a marine policy discharges the insurer from liability for any loss occurring on or after the time when the deviation occurs, regardless of the intention to deviate and whether or not the ship returns to its course of voyage before the loss occurs.

• Marginal note:Idem

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

  • (a) the course of the voyage is specified by the policy and is departed from; or

  • (b) the course of the voyage is not specified by the policy but the usual and customary course is departed from.

• Marginal note:Idem

  (3) Where a marine policy specifies the ports of discharge, the ship may proceed to any or all of them, but if, in the absence of any usage or sufficient cause, the ship does not proceed to them, or such of them as it goes to, in the order specified, there is a deviation from the voyage contemplated by the policy.

• Marginal note:Idem

  (4) Where a marine policy specifies that the ports of discharge are within a given area and does not otherwise name them, the ship may proceed to any or all of them, but if, in the absence of any usage or sufficient cause, the ship does not proceed to them, or such of them as it goes to, in their geographical order, there is a deviation from the voyage contemplated by the policy.

Marginal note:Delay in voyage

44 The marine adventure insured by a voyage policy must be carried out with reasonable dispatch and a delay, without lawful excuse, in carrying it out discharges the insurer from liability for any loss occurring on or after the time when the delay becomes unreasonable.

Marginal note:Excuses for deviation or delay

• 45 (1) A deviation or delay referred to in section 43 or 44 is excused if it is

  • (a) authorized by any special term in the marine policy;

  • (b) caused by circumstances beyond the control of the master and the master’s employer;

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

  • (d) reasonably necessary for the safety of the ship or subject-matter insured;

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

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

  • (g) caused by the barratrous conduct of the master or crew, if barratry is one of the perils insured against.

• Marginal note:Resumption

  (2) When the excuse for a deviation or delay ceases, the voyage must be resumed with reasonable dispatch.

Marginal note:Transhipment

46 Where the voyage contemplated by a marine policy is interrupted, by a peril insured against, at an intermediate port or place in such circumstances as, apart from the contract of affreightment, justify the master in landing and reshipping, or transhipping, the goods or movables and sending them to their destination, the insurer continues to be liable for a loss occurring on or after the landing or transhipment.

The Premium

Marginal note:Premium to be arranged

• 47 (1) A reasonable premium is payable if insurance is effected at a premium to be arranged and no arrangement is made.

• Marginal note:Additional premium

  (2) A reasonable additional premium is payable if insurance is effected on the terms that an additional premium is to be arranged on the happening of a given event and that event happens but no arrangement is made.

Marginal note:Payment of premium

48 Unless otherwise agreed, the duty of the insured or the insured’s agent to pay the premium and the duty of the insurer to issue the marine policy to the insured or the insured’s agent are concurrent conditions, and the insurer is not required to issue the policy until the premium is paid or tendered.

Marginal note:Policy effected through broker

• 49 (1) Unless otherwise agreed, where a broker effects a marine policy on behalf of the insured,

  • (a) the broker is directly responsible to the insurer for the premium;

  • (b) the broker has, as against the insured, a lien on the policy for the amount of the premium and the broker’s charges in effecting the policy; and

  • (c) the insurer is directly responsible to the insured for any amount that may be payable in respect of losses or a returnable premium.

• Marginal note:Idem

  (2) Unless otherwise agreed, where a broker effects a marine policy on behalf of a person who employs the broker as a principal, the broker has a lien on the policy in respect of any balance on any insurance account that may be due to the broker from that person, unless, when the debt was incurred, the broker had reason to believe that the person was only an agent.

Marginal note:Acknowledgement of receipt of premium

50 Where a broker effects a marine policy on behalf of an insured, an acknowledgement in the policy of the receipt of the premium is, in the absence of fraud, conclusive as between the insurer and the insured, but not as between the insurer and the broker.

Assignment of Marine Policy

Marginal note:Marine policy assignable

• 51 (1) A marine policy is assignable either before or after a loss, unless it expressly prohibits assignment.

• Marginal note:Manner of assignment

  (2) A marine policy may be assigned by endorsement on the policy or in any other customary manner.

• Marginal note:Effect of assignment

  (3) Where a marine policy is assigned so as to transfer the beneficial interest in the policy, the assignee of the policy is entitled to sue on it in the assignee’s name and, in any such action, the defendant is entitled to raise any defence arising out of the contract that the defendant would have been entitled to raise if the action had been brought in the name of the person by or on behalf of whom the policy was effected.

Marginal note:Loss of interest

• 52 (1) Where an insured transfers or loses an interest in the subject-matter insured and does not, before or at the time of so doing, expressly or impliedly agree to assign the marine policy, no subsequent assignment of the marine policy is operative.

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of an assignment of a marine policy after a loss.

Loss and Abandonment

Marginal note:Losses covered

• 53 (1) Subject to this Act and unless a marine policy otherwise provides, an insurer is liable only for a loss that is proximately caused by a peril insured against, including a loss that would not have occurred but for the misconduct or negligence of the master or crew.

• Marginal note:Losses specifically excluded

  (2) Without limiting the generality of subsection (1), an insurer is not liable for any loss attributable to the wilful misconduct of the insured nor, unless the marine policy otherwise provides, for

  • (a) in the case of insurance on a ship or goods, any loss proximately caused by delay, including a delay caused by a peril insured against;

  • (b) ordinary wear and tear, ordinary leakage or breakage or inherent vice or nature of the subject-matter insured;

  • (c) any loss proximately caused by vermin; or

  • (d) any loss or damage to machinery not proximately caused by maritime perils.