Page 299 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes (vii) It was very necessary for the safety of the ship or subject matter insured (or)
(viii) It was necessary to avoid being captured or destroyed by the enemy of the
government.

3. Warranty as to the Legality of Voyage: There is an implied warranty on the part of the
insured 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.
This warranty implies that the ship will not be used for undertaking any illegal voyage
e.g., smuggling, trading with enemy etc.

4. Proper Documentation of the ship: Where there is an express warranty that the ship shall
be neutral (especially in the case of a war time adventure) there is an implied warranty
that the ship carries all the papers necessary to prove the neutrality.
Proximate Cause

According to Marine Insurance Act, the insurer is liable for any loss proximately caused by a
peril insured against. He is not liable for any loss, which is not proximately caused by a peril
insured against.

Assignments of Policy

A marine insurance policy is assignable unless it contains terms expressly prohibiting assignment.
It may be assigned either before or after loss. A marine policy may be assigned by endorsement
thereon or in any other customary manner.

!
Caution Insurable property must be stated in the policy with reasonable certainty.
Otherwise at the time of loss, insurance company will not pay the damage.

Did u know? A marine insurance policy must fulfill all the essentials of a valid contract,
namely offer, acceptance, agreement, lawful consideration, competent parties, free consent,
and legal object.

Self Assessment

Fill in the blanks:
1. According to _______ Insurance Act, the insurer is liable for any loss proximately caused
by a peril insured against.

2. _______ warranty means a warranty, which is expressly stated.
3. It is not necessary that the __________ must exist at the time of affecting the insurance.
4. The _______ of contribution also applies to marine insurance.

5. The insurer is known as "________" and person taking insurance cover is called insured.

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