How Warranties works in Marine Insurance

A warranty is that by which the assured undertakes that some particular thing shall or shall not be done, or that some conditions shall be fulfilled or whereby he affirms or negatives the existence of a particular state of facts.

Warranties are the statement according to which insured person promises to do or not to do a particular thing or to fulfill or not to fulfill a certain condition, it is not merely a condition but statement of fact.

Warranties are more vigorously insisted upon than the conditions because the contract comes to an end if a warranty is broken whether the warranty was material or not.

In case of condition or representation the contract comes to end only when these were material or important. Warranties are of two types; Express Warranties, and Implied Warranties.

Express Warranties

Express warranties are those warranties which are expressly included or incorporated in the policy by reference.

Implied Warranties

These are not mentioned in the policy at all but are tacitly understood by the parties to the contract and are as fully binding as express warranties.

Warranties can also be classified as (1) Affirmative, and (2) Promissory. Affirmative warranty is the promise which insured gives to exist or not to exist certain facts.

Promissory warranty is the promise in which insured promises that he will do or not do a certain thing up to the period of policy. In marine insurance, implied warranties are very important. These are:

Seaworthiness of Ship

The warranty implies that the ship should be seaworthy at the commencement ofthe voyage, or if the voyage is carried out in stages at the commencement of each stage.

This warranty implies only to voyage policies, though such policies may be of ship, cargo, freight or any other interest. There is no implied warranty of seaworthiness in time policies.

A ship is seaworthy when the ship is suitably constructed, properly equipped, officered and manned, sufficiently fueled and provisioned, documented and capable of withstanding the ordinary strain and stress of the voyage.

The seaworthiness will be more clear from the following points:

  1. The standard to judge the seaworthiness is not fixed. It is a relative term and may vary with any particular vessel at different periods ofthe same voyage. A ship may be perfectly seaworthy for Trans-ocean voyage.A ship may be suitable for summer but may not be suitable for winter. There may be different standard for different ocean, for different cargo, for different destination and so on.
  2. Seaworthiness does not depend merely on the condition of the ship, but it includes the suitability and adequacy of her equipment, adequacy and experience of the officers and crew.
  3. At the commencement of journey, the ship must be capable of withstanding the ordinary strain arid stress of the sea.
  4. Seaworthiness also includes “Cargo-Worthiness”. It means the ship must be reasonably fit and suitable to cany the kind of cargo insured. It should be noted that the warranty of seaworthiness does not apply to cargo. It applies to the vessel only. There is no warranty that the cargo should be seaworthy, ft cannot be expected from the cargo-owner to be well-versed in the matter of shipping and overseas trade. So, it is admitted in seaworthiness clause that the cargo would be seaworthy of the vessel and would not be raised as defence to any claim for loss .by insured perils.

It should be noted that the ship should be seaworthy at the port of commencement of voyage or gt the different stages if voyage is to be completed in stages.

Legality of Venture

This warranty implies that the adventure insured shall be lawful and that so far as the assured can control the matter it shall he earned out in lawful manner of the country. Violation of foreign laws does not necessarily involve breach of the warranty.

There is no implied warranty as to the nationality of a ship. The implied warranty of legality applies total policies, voyage or time. Marine policies cannot be applied to protect illegal voyages or adventure. The assured can have no right to claim a loss if the venture was illegal.

The example of illegal venture may be trading with an enemy, violating national laws, smuggling, breach of blockade and similar ventures prohibited by law.

Illegality must not be confused with the illegal conduct of the third party e.g. barratry, theft, pirates, rovers. The waiver of this warranty is not permitted as it is against public policy.

Other Implied Warranties

There are other warranties which must be complied in marine insurance;

No Change in Voyage

When the destination of voyage is changed intentionally after the beginning of the risk, this is called change in voyage.

In absence of any warranty contrary to this one* the insurer quits his responsibility at the time of change in voyage. The time of change of voyage is determined when there is determination or intention to change the voyage.

No Delay in Voyage

This warranty applies only to voyage policies. There should not be delay in starting of voyage and laziness or delay during the course of journey. This is implied condition that venture must start within the reasonable time.

Moreover, the insured venture must be dispatched within the reasonable time. If this warranty is not complied, the insurer may avoid the contract in absence of any legal reason.

Non deviation

The liability of the insurer ends in deviation of journey. Deviation means removal from the common route or given path. When the ship deviates from the fixed passage without any legal reason, the insurer quits his responsibility.

This would be immaterial that the ship returned to her original route before loss. The insurer can quit his responsibility only when there is actual deviation and not mere intention to deviation.

Exceptions of warranties in marine insurance

There are following exceptions of delay and deviation warranties:

  1. Deviation or delay is authorized according to a particular warranty of the policy.
  2. When the delay or deviation was beyond the reasonable approach of the master or crew.
  3. The deviation or delay is exempted for the safety of ship or insured matter or human lives.
  4. Deviation or delay was due to barratry.