Assented to 1993-05-06
An Act respecting marine insurance
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Marginal note:Short title
Interpretation and Application
2 (1) In this Act,
action includes a counterclaim and a set-off; (action)
contract means a contract of marine insurance as described in subsection 6(1); (contrat)
freight includes the profit derivable by a shipowner from the use of the shipowner’s ship to carry the shipowner’s goods or movables and freight payable by a third party, but does not include passenger fares; (fret)
goods means goods in the nature of merchandise, but does not include personal effects or provisions or stores for use on board a ship; (marchandises)
- insurable property
insurable property means any ship, goods or movables; (bien assurable)
- marine adventure
marine adventure means any situation where insurable property is exposed to maritime perils, and includes any situation where
(a) the earning or acquisition of any freight, commission, profit or other pecuniary benefit, or the security for any advance, loan or disbursement, is endangered by the exposure of insurable property to maritime perils, and
(b) any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property, by reason of maritime perils; (opérations maritimes)
- marine policy
marine policy means the instrument evidencing a contract; (police maritime)
- maritime perils
maritime perils means the perils consequent on or incidental to navigation, including perils of the seas, fire, war perils, acts of pirates or thieves, captures, seizures, restraints, detainments of princes and peoples, jettisons, barratry and all other perils of a like kind and, in respect of a marine policy, any peril designated by the policy; (périls de mer)
movable means any movable tangible property, other than a ship or goods, and includes money, valuable securities and other documents; (bien mobilier)
ship includes the hull, machinery, materials and outfit and the stores and provisions for the officers and crew and also includes fuel, oils and engine stores, if they are owned by the insured, and, in the case of a ship engaged in a special trade, the ordinary fittings required for the trade. (navire)
Marginal note:Other terms
(2) The following terms have the meanings assigned by the provisions indicated beside them:
(a) actual total loss, subsection 56(1);
(b) constructive total loss, section 57;
(c) general average act, subsection 65(2);
(d) general average contribution, subsection 65(3);
(e) general average expenditure, subsection 65(2);
(f) general average loss, subsection 65(1);
(g) general average sacrifice, subsection 65(2);
(h) particular average loss, subsection 63(1);
(i) particular charges, subsection 63(2);
(j) salvage charges, subsection 64(1);
(k) time policy, subsection 29(3);
(l) unvalued policy, subsection 30(3);
(m) valued policy, subsection 30(2); and
(n) voyage policy, subsection 29(2).
Marginal note:Construction of marine policies
3 Subject to this Act and unless a contrary intention appears, the words and terms set out in the schedule have, when used in a marine policy, the meanings assigned by the schedule.
Marginal note:Rules of Canadian maritime law
4 The rules of Canadian maritime law continue to apply in respect of contracts, except in so far as the rules are inconsistent with this Act.
5 This Act applies in respect of contracts concluded on or after the coming into force of this Act.
Contract of Marine Insurance
Marginal note:Contract of marine insurance
6 (1) A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the insured, in the manner and to the extent agreed in the contract, against
(a) losses that are incidental to a marine adventure or an adventure analogous to a marine adventure, including losses arising from a land or air peril incidental to such an adventure if they are provided for in the contract or by usage of the trade; or
(b) losses that are incidental to the building, repair or launch of a ship.
(2) Subject to this Act, any lawful marine adventure may be the subject of a contract.
Marginal note:Insurable interest required
7 (1) In order to recover under a contract for a loss, the insured must have an insurable interest in the subject-matter insured at the time of the loss, but need not have such an interest when the contract is concluded.
Marginal note:“Lost or not lost” insurance
(2) Notwithstanding subsection (1), where the subject-matter is insured “lost or not lost”, the insured may recover in respect of an insurable interest in the subject-matter acquired after a loss unless, at the time the contract was concluded, the insured was aware of the loss and the insurer was not.
Marginal note:Where no interest
(3) An insured who has no insurable interest in the subject-matter insured at the time of a loss cannot acquire an insurable interest by any act or election after becoming aware of the loss.
Marginal note:Insurable interest - general principle
8 (1) Subject to this Act, a person who has an interest in a marine adventure has an insurable interest.
Marginal note:Interest in marine adventure
(2) A person has an interest in a marine adventure if the person has a legal or equitable relation to the adventure, or to any insurable property at risk in the adventure, and may benefit from the safety or due arrival of insurable property, may be prejudiced by its loss, damage or detention or may incur liability in respect of it.
Marginal note:Defeasible or contingent interests
9 (1) A defeasible interest and a contingent interest are insurable interests.
Marginal note:Buyer of goods
(2) A buyer of goods who has insured them has an insurable interest even though the buyer might have elected to reject the goods or to treat them as at the seller’s risk for any reason, including a delay in delivering them.
Marginal note:Partial interest
10 A partial interest of any nature is an insurable interest.
Marginal note:Master and crew’s wages
11 The master and any member of the crew of a ship have insurable interests in their own wages.
Marginal note:Advance freight
12 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
13 An insured has an insurable interest in the charges for any insurance that the insured has effected.
14 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.
15 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
16 (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
17 (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.
(2) Subsection (1) does not apply in respect of a transmission of interest by operation of law.
Marginal note:Gaming or wagering contracts void
18 (1) Every contract by way of gaming or wagering is void.
(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.
(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.
Marginal note:Calculation of insurable value
19 (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
20 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
21 (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.
(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
22 (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.
(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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