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

Act current to 2017-10-13

Marginal note:Advance freight

 A person who advances freight has an insurable interest, in so far as the freight is not repayable in case of loss.

Marginal note:Charges of insurance

 An insured has an insurable interest in the charges for any insurance that the insured has effected.

Marginal note:Reinsurance

 The insurer under a contract has an insurable interest in the risk insured and may reinsure in respect of it, but, unless the marine policy provides otherwise, the original insured has no right or interest in the reinsurance.

Marginal note:Bottomry

 A lender of money on the security of a ship or a ship’s cargo has an insurable interest in respect of the loan.

Marginal note:Quantum of mortgagor’s interest
  •  (1) A mortgagor of insurable property has an insurable interest in its full value, and the mortgagee has an insurable interest in any sum due or to become due under the mortgage.

  • Marginal note:Interest of mortgagee, consignee or other person

    (2) A mortgagee, consignee or other person who has an insurable interest in the subject-matter insured may insure on the person’s own behalf, on behalf and for the benefit of any other interested person or both on the person’s own behalf and on behalf and for the benefit of any other interested person.

  • Marginal note:Quantum of owner’s interest

    (3) The owner of insurable property has an insurable interest in its full value, even where a third person has agreed, or is liable, to indemnify the owner in case of loss.

Marginal note:Assignment of interest
  •  (1) An insured who assigns or otherwise parts with an insurable interest in the subject-matter insured does not thereby transfer the rights of the insured under the contract, unless there is an express or implied agreement to that effect.

  • Marginal note:Exception

    (2) Subsection (1) does not apply in respect of a transmission of interest by operation of law.

Marginal note:Gaming or wagering contracts void
  •  (1) Every contract by way of gaming or wagering is void.

  • Marginal note:Presumption

    (2) A contract is deemed to be a contract by way of gaming or wagering if

    • (a) the insured has no insurable interest within the meaning of this Act and the contract is concluded with no expectation of acquiring such an interest; or

    • (b) the marine policy is made “interest or no interest”, “without further proof of interest than the policy itself” or “without benefit of salvage to the insurer” or is subject to any other like term.

  • Marginal note:Exception

    (3) Paragraph (2)(b) does not apply in respect of a marine policy that is made “without benefit of salvage to the insurer” or is subject to any other like term, if there is no possibility of salvage.

Insurable Value

Marginal note:Calculation of insurable value
  •  (1) Subject to any express provision of, or any value specified in, the marine policy, the insurable value of the subject-matter insured is

    • (a) in the case of insurance on a ship, the aggregate of the value of the ship at the commencement of the risk and the charges of insurance;

    • (b) in the case of insurance on freight, whether paid in advance or not, the aggregate of the gross amount of the freight at the risk of the insured and the charges of insurance;

    • (c) in the case of insurance on goods, the aggregate of the prime cost of the goods, the expenses of and incidental to shipping and the charges of insurance on those goods and expenses; and

    • (d) in the case of insurance on any other subject-matter, the aggregate of the amount at the risk of the insured when the policy attaches and the charges of insurance.

  • Marginal note:Value of ship

    (2) For the purposes of paragraph (1)(a), the value of a ship includes money advanced for officers’ and crew’s wages and other disbursements incurred to make the ship fit for the marine adventure contemplated by the marine policy.

Disclosure and Representations

Marginal note:Utmost good faith

 A contract is based on the utmost good faith and, if the utmost good faith is not observed by either party, the contract may be avoided by the other party.

Marginal note:Disclosure by insured
  •  (1) Subject to this section, an insured must disclose to the insurer, before the contract is concluded, every material circumstance that is known to the insured.

  • Marginal note:Disclosure by agent of insured

    (2) Subject to this section, an agent who effects insurance for an insured must disclose to the insurer, before the contract is concluded,

    • (a) every material circumstance that is known to the agent; and

    • (b) every material circumstance that the insured must disclose, unless the insured learned of it too late to communicate it to the agent.

  • Marginal note:Material circumstance

    (3) A circumstance is material if it would influence the judgment of a prudent insurer in fixing the premium or determining whether to take the risk.

  • Marginal note:Question of fact

    (4) Whether any circumstance that is not disclosed is material or not is a question of fact.

  • Marginal note:Circumstances not disclosed

    (5) In the absence of any inquiry, the following circumstances need not be disclosed:

    • (a) any circumstance that diminishes the risk;

    • (b) any circumstance that is known to the insurer;

    • (c) any circumstance as to which information is waived by the insurer; and

    • (d) any circumstance the disclosure of which is superfluous by reason of any express warranty or implied warranty.

  • Marginal note:Presumptions

    (6) For the purposes of this section,

    • (a) an insured is deemed to know every circumstance that, in the ordinary course of business, ought to be known by the insured;

    • (b) an agent is deemed to know every circumstance that, in the ordinary course of business, ought to be known by, or to have been communicated to, the agent; and

    • (c) an insurer is presumed to know circumstances of common notoriety and every circumstance that, in the ordinary course of an insurer’s business, ought to be known by an insurer.

  • Marginal note:Effect of non-disclosure

    (7) If an insured or an agent of an insured fails to make a disclosure as required by this section, the insurer may avoid the contract.

  • Marginal note:Definition of “circumstance”

    (8) In this section, circumstance includes any communication made to, or information received by, the insured.

Marginal note:Representations by insured or agent
  •  (1) Every material representation made by the insured or the insured’s agent to the insurer during the negotiations for the contract and before the contract is concluded must be true.

  • Marginal note:Material representation

    (2) A representation is material if it would influence the judgment of a prudent insurer in fixing the premium or determining whether to take the risk.

  • Marginal note:Question of fact

    (3) Whether any representation is material or not is a question of fact.

  • Marginal note:Types of representations

    (4) A representation may be as to a matter of fact or as to a matter of expectation or belief.

  • Marginal note:Fact

    (5) A representation as to a matter of fact is deemed to be true if the difference between what is represented and what is actually correct would not be considered material by a prudent insurer.

  • Marginal note:Expectation or belief

    (6) A representation as to a matter of expectation or belief is deemed to be true if it is made in good faith.

  • Marginal note:Withdrawal or correction

    (7) A representation may be withdrawn or corrected before a contract is concluded.

  • Marginal note:Effect of false representations

    (8) If any material representation made by the insured or the insured’s agent to the insurer during the negotiations for the contract is not true and is not withdrawn or corrected before the contract is concluded, the insurer may avoid the contract.

 
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