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

Conclusion and Ratification of Contracts

Marginal note:When contract is deemed to be concluded

23 A contract is deemed to be concluded when the proposal of the insured is accepted by the insurer, whether the marine policy is then issued or not, and for the purpose of establishing when the proposal is accepted, the slip or covering note or other customary memorandum of the contract may be referred to.

Marginal note:Ratification

24 A contract effected in good faith by a person on behalf of another person may be ratified by that other person even after the other person becomes aware of a loss.

The Marine Policy

Marginal note:Marine policy required

• 25 (1) A contract is inadmissible in evidence, unless it is evidenced by a marine policy in accordance with this Act.

• Marginal note:Issue of marine policy

  (2) A marine policy may be executed and issued when the contract is concluded or afterwards.

Marginal note:Contents of marine policy

26 A marine policy must specify

• (a) the name of the insured or of a person who effects the insurance on behalf of the insured;

• (b) the subject-matter insured;

• (c) the perils insured against;

• (d) the voyage or period, or both, covered by the insurance;

• (e) the sum insured; and

• (f) the name of the insurer.

Marginal note:Signature of insurer

• 27 (1) A marine policy must be signed by or on behalf of the insurer.

• Marginal note:Exception

  (2) Notwithstanding subsection (1), where the insurer is a corporation, the corporate seal is sufficient.

• Marginal note:Subscription by two or more insurers

  (3) Where a marine policy is subscribed by or on behalf of two or more insurers, each subscription, unless the contrary is expressed, constitutes a distinct contract with the insured.

Marginal note:Specification of subject-matter

• 28 (1) A marine policy must specify the subject-matter insured with reasonable certainty, but need not specify the nature and extent of the interest of the insured in that subject-matter.

• Marginal note:Specification in general terms

  (2) A marine policy that specifies the subject-matter insured in general terms shall be construed to apply to the interest intended by the insured to be covered.

• Marginal note:Usage

  (3) Any usage regulating the specification of the subject-matter insured shall be taken into consideration in applying this section.

Marginal note:Voyage and time policies

• 29 (1) A marine policy may be a voyage policy or a time policy.

• Marginal note:Voyage policy

  (2) A marine policy is a voyage policy if the contract insures the subject-matter “at and from”, or “from”, one place to another place or other places.

• Marginal note:Time policy

  (3) A marine policy is a time policy if the contract insures the subject-matter for a definite period.

• Marginal note:Combined policies

  (4) A marine policy may include a contract insuring the subject-matter as described in subsections (2) and (3).

Marginal note:Valued and unvalued policies

• 30 (1) A marine policy may be a valued policy or an unvalued policy.

• Marginal note:Valued policy

  (2) A marine policy is a valued policy if it specifies the agreed value of the subject-matter insured.

• Marginal note:Unvalued policy

  (3) A marine policy is an unvalued policy if it does not specify the value of the subject-matter insured and, subject to the limit of the sum insured, leaves the value to be determined in accordance with section 19.

• Marginal note:Value specified

  (4) Subject to this Act and in the absence of fraud, the value specified by a valued policy is, as between the insurer and the insured, conclusive of the insurable value of the subject-matter intended to be insured, regardless of whether any loss is a total loss or a partial loss.

• Marginal note:Idem

  (5) Unless a valued policy otherwise provides, the value specified by the policy is not conclusive for the purpose of determining whether there has been a constructive total loss.

Marginal note:Floating policy

• 31 (1) A marine policy may be a floating policy, that is to say, a policy that describes the insurance in general terms and leaves the name of the ship and other particulars to be defined by subsequent declarations, either by endorsement on the policy or in any other customary manner.

• Marginal note:Declarations

  (2) Unless a floating policy otherwise provides, declarations must be made in the order of dispatch or shipment and must, in the case of goods, include all consignments within the terms of the policy and honestly state the value of the goods.

• Marginal note:Rectification

  (3) An omission in a declaration or an erroneous declaration may be rectified even after loss or arrival if the omission or declaration was made in good faith.

• Marginal note:Idem

  (4) Unless a floating policy otherwise provides, where a declaration of value is not made until after notice of loss or arrival, the policy shall be treated as an unvalued policy with respect to the subject-matter of that declaration.

Warranties

Marginal note:Definition of “warranty”

• 32 (1) In this section and sections 33 to 39, warranty means a promissory warranty by which the insured

  • (a) undertakes that some particular thing will or will not be done or that some condition will be fulfilled; or

  • (b) affirms or negates the existence of particular facts.

• Marginal note:Types of warranty

  (2) A warranty may be an express warranty or an implied warranty.

Marginal note:Express warranties

• 33 (1) An express warranty may be in any form of words from which the intention to warrant may be inferred.

• Marginal note:Inclusion in policy

  (2) An express warranty must be included in, or written on, the marine policy or be contained in a document incorporated by reference into the policy.

• Marginal note:Exclusion of implied warranty

  (3) An express warranty does not exclude an implied warranty, unless they are inconsistent.

Marginal note:Warranty of legality

34 There is an implied warranty in every marine policy that the marine adventure insured is lawful and, in so far as the insured has control, will be carried out in a lawful manner.

Marginal note:No implied warranty of nationality

35 There is no implied warranty in any marine policy as to the nationality of a ship or that the nationality of a ship will not be changed during the risk.

Marginal note:Warranty of neutrality

• 36 (1) Where in any marine policy insurable property is expressly warranted to be neutral, there is an implied condition in the policy

  • (a) that the property will have a neutral character at the commencement of the risk and that, in so far as the insured has control, that character will be preserved during the risk; and

  • (b) where the property is a ship, that, in so far as the insured has control, the papers necessary to establish the neutrality of the ship will be carried on the ship and will not be falsified or suppressed and no simulated papers will be used.

• Marginal note:Breach of condition

  (2) If any loss occurs through a breach of the implied condition referred to in paragraph (1)(b), the insurer may avoid the contract.

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.