The Marine Insurance Act 1906 (8 Edw. 7. c. 41) is a UK act of Parliament regulating marine insurance. The act applies both to "ship & cargo" marine insurance, and to P&I cover.
The act was drafted by Sir Mackenzie Dalzell Chalmers, who had earlier drafted the Sale of Goods Act 1893. The act is a codifying act, that is to say, it attempts to collate existing common law and present it in a statutory (i.e. “codified”) form. In the event, the act did more than merely codify the law, and some new elements were introduced in 1906. The Marine Insurance Act 1906 has been highly influential, as it governs not merely English law, but it also dominates marine insurance worldwide through its wholesale adoption by other jurisdictions.
s.17: imposes a duty on the insured of uberrimae fides (as opposed to caveat emptor); i.e. that questions must be answered honestly and the risk not misrepresented.
s.18: the proposer of the insurer has a duty to disclose all material facts relevant to the acceptance and rating of the risk. Failure to do so is known as non-disclosure or concealment (there are minor differences in the two terms) and renders the insurance voidable by the insurer.
s.33(3): If [a warranty] be not [exactly] 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.
s.34(2): where a warranty has been broken, it is no defence to the insured that the breach has been remedied, and the warranty complied with, prior to the loss.
s.34(3): a breach of warranty may be waived by the insurer.
s.50: a policy may be assigned. Typically, a shipowner might assign the benefit of a policy to the ship-mortgagor.
ss.60-63: deals with the issues of a constructive total loss. The insured can, by notice, claim for a constructive total loss with the insurer becoming entitled to the ship or cargo if it should later turn up. (By contrast an actual total loss describes the physical destruction of a vessel or cargo.)
s.79: deals with subrogation; ie. the rights of the insurer to stand in the shoes of an indemnified insured and recover salvage for his own benefit.
Schedule 1 of the Act contains a list of definitions; schedule 2 contains the model policy wording.
Part 5 of the Insurance Act 2015 addresses "Good faith" as follows:
Section 14 provides that "any rule of law permitting a party to a contract of insurance to avoid the contract on the ground that utmost good faith has not been observed by the other party is abolished.
Accordingly, s,14(3) amends s.17 of the Marine Insurance Act 1906 to read: "A contract of marine insurance is a contract based upon the utmost good faith" and that section's subsequent words: "and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party" are now omitted.
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect against the risk of a contingent or uncertain loss.
In insurance, the insurance policy is a contract between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language.
Liability insurance is a part of the general insurance system of risk financing to protect the purchaser from the risks of liabilities imposed by lawsuits and similar claims and protects the insured if the purchaser is sued for claims that come within the coverage of the insurance policy.
Protection and indemnity insurance, more commonly known as P&I insurance, is a form of mutual maritime insurance provided by a P&I club. Whereas a marine insurance company provides "hull and machinery" cover for shipowners, and cargo cover for cargo owners, a P&I club provides cover for open-ended risks that traditional insurers are reluctant to insure. Typical P&I cover includes: a carrier's third-party risks for damage caused to cargo during carriage; war risks; and risks of environmental damage such as oil spills and pollution. In the UK, both traditional underwriters and P&I clubs are subject to the Marine Insurance Act 1906.
In common law jurisdictions, a misrepresentation is a false or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well.
Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch of marine insurance, though marine insurance also includes onshore and offshore exposed property,, hull, marine casualty, and marine losses. When goods are transported by mail or courier or related post, shipping insurance is used instead.
Uberrima fides is a Latin phrase meaning "utmost good faith". It is the name of a legal doctrine which governs insurance contracts. This means that all parties to an insurance contract must deal in good faith, making a full declaration of all material facts in the insurance proposal. This contrasts with the legal doctrine caveat emptor.
Australian insurance law is based on commercial contract law, but is subject to regulations that affect the insurance industry and insurance contracts within Australia. Commonwealth Parliament has power to make laws with respect to insurance and insurance companies under section 51(xiv) and (xx) of the Australian Constitution. Generally, the Insurance Act 1973 and Insurance Contracts Act 1984 are the main acts that apply, however there are a number of other pieces of legislation enacted by the states, private codes and voluminous case law all of which forms the body of insurance law.
Insurance bad faith is a tort unique to the law of the United States that an insurance company commits by violating the "implied covenant of good faith and fair dealing" which automatically exists by operation of law in every insurance contract.
In insurance claims, a total loss or write-off is a situation where the lost value, repair cost or salvage cost of a damaged property exceeds its insured value, and simply replacing the old property with a new equivalent is more cost-effective.
Insurance law is the practice of law surrounding insurance, including insurance policies and claims. It can be broadly broken into three categories - regulation of the business of insurance; regulation of the content of insurance policies, especially with regard to consumer policies; and regulation of claim handling wise.
Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors & omissions (E&O) in the US, is a form of liability insurance which helps protect professional advising, consulting, and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client in a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm. Professional liability insurance may take on different forms and names depending on the profession, especially medical and legal, and is sometimes required under contract by other businesses that are the beneficiaries of the advice or service.
Carter v Boehm (1766) 3 Burr 1905 is a landmark English contract law case, in which Lord Mansfield established the duty of utmost good faith or uberrimae fidei in insurance contracts.
The doctrine of deviation is a particular aspect of contracts of carriage of goods by sea. A deviation is a departure from the "agreed route" or the "usual route", and it can amount to a serious breach of contract.
Wilburn Boat Company v. Fireman's Fund Insurance Company, 348 U.S. 310 (1955), is a United States Supreme Court case in which the Court held that state law, rather than federal admiralty law, should govern marine insurance contracts.
Road Traffic Act insurer, or RTA insurer for short, is a colloquial term for an insurer liable to a road traffic accident victim based on a policy that has been voided in the United Kingdom, as defined in Road Traffic Act 1988.
Insurance in South Africa describes a mechanism in that country for the reduction or minimisation of loss, owing to the constant exposure of people and assets to risks. The kinds of loss which arise if such risks eventuate may be either patrimonial or non-patrimonial.
Seaworthiness is a concept that runs through maritime law in at least four contractual relationships. In a marine insurance voyage policy, the assured warrants that the vessel is seaworthy. A carrier of goods by sea owes a duty to a shipper of cargo that the vessel is seaworthy at the start of the voyage. A shipowner warrants to a charterer that the vessel under charter is seaworthy; and similarly, a shipbuilder warrants that the vessel under construction will be seaworthy.
The Insurance Act 2015 is a United Kingdom act of Parliament which makes significant reforms to insurance law. It came into effect on 12 August 2016, and follows on from the Consumer Insurance Act 2012 ("CIDRA"). Both of these new acts are a consequence of the Law Commission's millennium review of the law of insurance in general, and of marine insurance in particular. The Marine Insurance Act 1906 has been amended by these two new acts.
The Consumer Insurance Act 2012 (c.6) is a UK Act of Parliament that makes important reforms to insurance law.
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