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

Act current to 2017-09-27

Assignment of Marine Policy

Marginal note:Marine policy assignable
  •  (1) A marine policy is assignable either before or after a loss, unless it expressly prohibits assignment.

  • Marginal note:Manner of assignment

    (2) A marine policy may be assigned by endorsement on the policy or in any other customary manner.

  • Marginal note:Effect of assignment

    (3) Where a marine policy is assigned so as to transfer the beneficial interest in the policy, the assignee of the policy is entitled to sue on it in the assignee’s name and, in any such action, the defendant is entitled to raise any defence arising out of the contract that the defendant would have been entitled to raise if the action had been brought in the name of the person by or on behalf of whom the policy was effected.

Marginal note:Loss of interest
  •  (1) Where an insured transfers or loses an interest in the subject-matter insured and does not, before or at the time of so doing, expressly or impliedly agree to assign the marine policy, no subsequent assignment of the marine policy is operative.

  • Marginal note:Exception

    (2) Subsection (1) does not apply in respect of an assignment of a marine policy after a loss.

Loss and Abandonment

Marginal note:Losses covered
  •  (1) Subject to this Act and unless a marine policy otherwise provides, an insurer is liable only for a loss that is proximately caused by a peril insured against, including a loss that would not have occurred but for the misconduct or negligence of the master or crew.

  • Marginal note:Losses specifically excluded

    (2) Without limiting the generality of subsection (1), an insurer is not liable for any loss attributable to the wilful misconduct of the insured nor, unless the marine policy otherwise provides, for

    • (a) in the case of insurance on a ship or goods, any loss proximately caused by delay, including a delay caused by a peril insured against;

    • (b) ordinary wear and tear, ordinary leakage or breakage or inherent vice or nature of the subject-matter insured;

    • (c) any loss proximately caused by vermin; or

    • (d) any loss or damage to machinery not proximately caused by maritime perils.

Marginal note:Total and partial losses

 A loss may be a total loss or a partial loss.

Marginal note:Types of total loss
  •  (1) A total loss may be an actual total loss or a constructive total loss.

  • Marginal note:Losses covered

    (2) Unless a marine policy otherwise provides, insurance against total loss includes both actual total loss and constructive total loss.

Marginal note:Actual total loss
  •  (1) A loss is an actual total loss if the subject-matter insured is destroyed or is so damaged as to cease to be a thing of the kind insured or if the insured is irretrievably deprived of the subject-matter.

  • Marginal note:Idem

    (2) Where a ship engaged in a marine adventure is missing and no news of the ship is received within a reasonable period, an actual total loss may be presumed.

Marginal note:Constructive total loss
  •  (1) Unless a marine policy otherwise provides, a loss is a constructive total loss if the subject-matter insured is reasonably abandoned because the actual total loss of the subject-matter appears unavoidable or the preservation of the subject-matter from actual total loss would entail costs exceeding its value when the costs are incurred.

  • Marginal note:Idem

    (2) Without limiting the generality of subsection (1), a loss is a constructive total loss if

    • (a) in the case of a ship or goods, the insured is deprived of possession of the ship or goods by reason of a peril insured against and either the insured is unlikely to recover the ship or goods or the cost of recovery would exceed the value of the ship or goods when recovered;

    • (b) in the case of a ship, the ship is so damaged by a peril insured against that the cost of repairing it would exceed the value of the ship when repaired; or

    • (c) in the case of goods, the goods are so damaged that the cost of repairing and forwarding them to their destination would exceed the value of the goods on arrival.

  • Marginal note:Cost of repair of ship

    (3) For the purposes of paragraph (2)(b), in estimating the cost of repairing a ship, no deduction may be made in respect of general average contributions to the repairs payable by other interested persons, but account is to be taken of the cost of future salvage operations and of any future general average contributions to which the ship would be liable if repaired.

Marginal note:Treatment
  •  (1) An insured may treat a constructive total loss as a partial loss or may abandon the subject-matter insured to the insurer and treat the constructive total loss as an actual total loss.

  • Marginal note:Notice of abandonment

    (2) Subject to this section and section 59, an insured who elects to abandon the subject-matter insured to the insurer must give a notice of abandonment to the insurer with reasonable diligence after the insured receives reliable information of the loss.

  • Marginal note:Time for inquiry

    (3) An insured who receives doubtful information of a loss is entitled to a reasonable time to make inquiries before giving a notice of abandonment.

  • Marginal note:Manner of giving notice

    (4) An insured may give a notice of abandonment orally or in writing, or partly orally and partly in writing, and in any terms that indicate the insured’s intention to abandon unconditionally the insured interest in the subject-matter to the insurer.

  • Marginal note:Failure to give notice

    (5) If an insured fails to give a notice of abandonment as required by this section, the constructive total loss may be treated only as a partial loss.

Marginal note:Notice not required
  •  (1) An insured is not required to give a notice of abandonment to the insurer if

    • (a) the loss is an actual total loss;

    • (b) notice is waived by the insurer; or

    • (c) at the time the insured receives information of the loss, there is no possibility of benefit to the insurer if notice were given to the insurer.

  • Marginal note:Idem

    (2) An insurer who has reinsured a risk is not required to give a notice of abandonment to the reinsurer.

Marginal note:Refusal of abandonment
  •  (1) If an insured gives a notice of abandonment as required by section 58, the rights of the insured are not prejudiced by a refusal of the insurer to accept the abandonment.

  • Marginal note:Acceptance of abandonment

    (2) An acceptance of an abandonment may be either express or implied from the conduct of the insurer, but the mere silence of an insurer after a notice of abandonment is given does not constitute an acceptance.

  • Marginal note:Effect of acceptance on insured

    (3) On acceptance of an abandonment, the abandonment is irrevocable.

  • Marginal note:Effect of acceptance on insurer

    (4) On acceptance of an abandonment, the insurer

    • (a) conclusively admits liability for the loss and the sufficiency of the notice of abandonment; and

    • (b) is entitled to acquire the interest of the insured in whatever remains of the subject-matter insured, including all proprietary rights incidental thereto.

  • Marginal note:Abandonment of ship

    (5) On acceptance of the abandonment of a ship, the insurer is entitled to

    • (a) any freight being earned at the time of, or earned subsequent to, the casualty causing the loss, less the costs incurred in earning it after the casualty; and

    • (b) if the ship is carrying the shipowner’s goods, reasonable remuneration for the carriage of the goods subsequent to the casualty.

Marginal note:Partial loss
  •  (1) A partial loss is any loss that is not a total loss.

  • Marginal note:Idem

    (2) Where insured goods reach their destination in specie but cannot be identified by reason of obliteration of marks or otherwise, the loss, if any, is a partial loss.

  • Marginal note:Recovery for partial loss

    (3) Unless a marine policy otherwise provides, an insured who brings an action for a total loss but establishes only a partial loss may recover for a partial loss.

 
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