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

Marginal note:Partial loss of goods or movables

• 70 (1) Subject to any express provision in the policy, the measure of indemnity in respect of a partial loss of goods or movables is

  • (a) where part of the goods or movables insured by an unvalued policy is totally lost, the insurable value of the part lost, ascertained as in the case of a total loss;

  • (b) where part of the goods or movables insured by a valued policy is totally lost, that proportion of the value of the goods or movables specified by the policy that the insurable value of the part lost bears to the insurable value of all the goods or movables, ascertained as in the case of an unvalued policy; and

  • (c) where the whole or any part of the goods or movables is delivered damaged at its destination, that proportion of the insurable value of all the goods or movables, in the case of an unvalued policy, or the value of all the goods or movables specified by the policy, in the case of a valued policy, that the difference between the gross value of all the goods or movables in a sound condition at that destination and their gross value in their damaged condition at that destination bears to the gross value of all the goods or movables in a sound condition at that destination.

• Marginal note:Definition of “gross value”

  (2) For the purposes of paragraph (1)(c), gross value

  • (a) in the case of goods or movables customarily sold in bond, means the bonded price of the goods or movables; and

  • (b) in the case of any other goods or movables, means the wholesale price, or if there is no wholesale price, the estimated value, of the goods or movables, together with any freight, landing charges and duty paid in respect of them.

• Marginal note:Gross proceeds

  (3) For the purposes of paragraph (1)(c), where the goods or movables are sold at their destination and all charges on the sale are paid by the sellers, their gross value in their damaged condition at that destination is the actual price obtained for them, which price is known as the gross proceeds.

Marginal note:Apportionment of specified value

• 71 (1) In determining the measure of indemnity under a valued policy that specifies a single value for different types of goods,

  • (a) the value must be apportioned to those types in proportion to their respective insurable values, as determined under this Act; and

  • (b) the value of any part of any type of the goods is that proportion of the value of all the goods of that type that the insurable value of that part bears to the insurable value of all the goods of that type, as determined under this Act.

• Marginal note:Idem

  (2) Where the insurable value of goods cannot be determined for the purposes of subsection (1) because the prime cost of a type of goods is not ascertainable, the value specified by the valued policy may be apportioned to the different types of goods in proportion to their respective net arrived sound values.

Marginal note:General average contribution

• 72 (1) Subject to any express provision in the marine policy, the measure of indemnity in respect of a general average contribution that an insured has paid or is liable to pay is

  • (a) where the subject-matter of the contribution is fully insured for its contributory value, the full amount of the contribution; and

  • (b) where the subject-matter of the contribution is not fully insured for its contributory value or only part of it is insured, that proportion of the full amount of the contribution that the insured value of the subject-matter bears to its contributory value.

• Marginal note:Idem

  (2) In order to determine the measure of indemnity under paragraph (1)(b) in a case where a particular average loss that is to be deducted from the contributory value has been incurred and is payable by the insurer, the amount of the loss must be deducted from the insured value of the subject-matter.

• Marginal note:Salvage charges

  (3) Where salvage charges are recoverable under a marine policy, the measure of indemnity in respect of the charges is to be determined in accordance with the principles set out in subsections (1) and (2).

Marginal note:Third party liability

73 Subject to any express provision in the policy, the measure of indemnity in respect of any liability to a third party that is expressly insured against by a marine policy is the amount paid or payable by the insured to the third party in respect of the liability.

Marginal note:Other losses

74 The measure of indemnity in respect of a loss not provided for in any of sections 67 to 73 is to be determined, as much as possible, in accordance with those sections.

Marginal note:Proportional liability

75 Where a loss is recoverable under a marine policy, the insurer, or each insurer if there is more than one, is liable for that proportion of the measure of indemnity in respect of the loss that the amount subscribed by the insurer is of

• (a) in the case of an unvalued policy, the insurable value of the subject-matter; and

• (b) in the case of a valued policy, the value of the subject-matter specified by the policy.

Marginal note:Construction

76 Nothing in sections 66 to 75 shall be construed as affecting the provisions of this Act relating to double insurance or prohibiting an insurer from disproving an interest in whole or in part or from establishing that, at the time of a loss, the whole or any part of the subject-matter insured was not at risk under the marine policy.

Marginal note:Particular average warranties

• 77 (1) Where the subject-matter insured under a marine policy is warranted free from particular average, the insured cannot recover for a loss of part of the subject-matter, other than a loss incurred by a general average sacrifice, unless the contract evidenced by the policy is apportionable, in which case the insured may recover for a total loss of any apportionable part.

• Marginal note:Idem

  (2) Where the subject-matter insured under a marine policy is warranted free from particular average, either wholly or under a specified percentage, the insurer is nevertheless liable for salvage charges and, if the policy contains a sue and labour clause, for particular charges and other expenses properly incurred under the clause for the purpose of averting a loss by a peril insured against.

• Marginal note:Addition of general to particular average loss

  (3) Unless the policy otherwise provides, where the subject-matter insured under a marine policy is warranted free from particular average under a specified percentage, a general average loss cannot be added to a particular average loss in order to attain that percentage.

• Marginal note:Calculation of percentage

  (4) Where the subject-matter insured under a marine policy is warranted free from particular average under a specified percentage, for the purpose of determining whether that percentage has been attained, only the actual loss incurred in respect of the subject-matter may be considered, and no particular charges or expenses incurred in establishing the loss may be included.

Marginal note:Recovery of successive losses

• 78 (1) Subject to this Act and unless the marine policy otherwise provides, an insurer is liable for successive losses, even if the total amount of the losses exceeds the sum insured.

• Marginal note:Exception

  (2) Where, under a marine policy, a partial loss that has not been repaired or otherwise made good is followed by a total loss, the insurer is liable only for the total loss.

• Marginal note:Liability under sue and labour clause

  (3) Nothing in subsections (1) and (2) shall be construed as affecting the liability of an insurer under a sue and labour clause.

Marginal note:Sue and labour clause

• 79 (1) Where a marine policy contains a sue and labour clause, the engagement thereby entered into is supplementary to the contract and the insured may recover from the insurer any expenses properly incurred under the clause, even if the insurer has paid for a total loss of the subject-matter insured or the subject-matter insured is warranted free from particular average, either wholly or under a specified percentage.

• Marginal note:Idem

  (2) General average losses, general average contributions, salvage charges, and expenses incurred for the purpose of averting or diminishing a loss by a peril not insured against are not recoverable under a sue and labour clause.

Marginal note:Duty to avert or diminish loss

80 It is the duty of an insured and an insured’s agent to take such measures as are reasonable for the purpose of averting or diminishing a loss under the marine policy.

Rights of Insurer on Payment

Marginal note:Subrogation where total loss

• 81 (1) On payment by an insurer for a total loss of the whole of the subject-matter insured or, if the subject-matter insured is goods, for any apportionable part of the subject-matter insured, the insurer becomes entitled to assume the interest of the insured in the whole or part of the subject-matter and is subrogated to all the rights and remedies of the insured in respect of that whole or part from the time of the casualty causing the loss.

• Marginal note:Subrogation where partial loss

  (2) On payment by an insurer for a partial loss of the subject-matter insured, the insurer acquires no title to the subject-matter but is subrogated to all the rights and remedies of the insured in respect of the subject-matter from the time of the casualty causing the loss to the extent that the insured is indemnified, in accordance with this Act, by the payment for the loss.

Return of Premium

Marginal note:Recovery or retention

• 82 (1) A premium or part of a premium that is returnable to the insured may, if paid, be recovered by the insured from the insurer and may, if not paid, be retained by the insured or the insured’s agent.

• Marginal note:When premium returnable

  (2) A premium or part of a premium is returnable to the insured in any of the circumstances described in sections 83 to 85.

Marginal note:Return on happening of specified event

83 Where a marine policy contains a provision for the return of the premium or part of the premium on the happening of a specified event, the premium or part is returnable to the insured on the happening of that event.

Marginal note:Return on total failure of consideration

• 84 (1) Where the consideration for a premium totally fails and there is no fraud or illegality on the part of the insured or the insured’s agent, the premium is returnable to the insured on the failure.

• Marginal note:Idem

  (2) Where any apportionable part of the consideration for a premium totally fails and there is no fraud or illegality on the part of the insured or the insured’s agent, a proportionate part of the premium is returnable to the insured on the failure.

Marginal note:Particular circumstances

• 85 (1) Without limiting the generality of section 84, a premium or part of a premium is returnable or not returnable to the insured in the particular circumstances described in subsections (2) to (11).

• Marginal note:Void or avoided marine policy

  (2) Where a marine policy is void, or is avoided by the insurer as of the commencement of the risk, and there is no fraud or illegality on the part of the insured or the insured’s agent, the premium is returnable.

• Marginal note:Exception

  (3) Where the risk is not apportionable and has once attached, subsection (2) does not apply and the premium is not returnable.

• Marginal note:Subject-matter never imperilled

  (4) Where the subject-matter insured or part of the subject-matter insured has never been exposed to any peril insured against, the premium or a proportionate part of the premium, as the case may be, is returnable.

• Marginal note:Exception

  (5) Where the subject-matter is insured “lost or not lost” and has arrived at its destination safely before the contract is concluded, subsection (4) does not apply and the premium is not returnable unless, at the time the contract is concluded, the insurer knows of the safe arrival.

• Marginal note:No insurable interest

  (6) Where an insured has no insurable interest throughout the period of the risk, the premium is returnable.

• Marginal note:Exception

  (7) Subsection (6) does not apply in respect of a contract by way of gaming or wagering and the premium is not returnable.

• Marginal note:Over-insurance under one policy

  (8) Where an insured is over-insured under an unvalued policy, a proportionate part of the premium is returnable.

• Marginal note:Defeasible interest

  (9) Where an insured has a defeasible interest in the subject-matter insured that is terminated during the period of the risk, the premium is not returnable.

• Marginal note:Over-insurance under several policies

  (10) Subject to subsections (2) to (9), where an insured is over-insured by double insurance, a proportionate part of the premiums is returnable.

• Marginal note:Exceptions

  (11) Subsection (10) does not apply

  • (a) where the double insurance is knowingly effected by the insured, in which case none of the premiums is returnable; and

  • (b) where the policies are effected at different times and either the earlier policy has at any time borne the entire risk or a claim has been paid on the earlier policy in respect of the full sum insured by it, in which case the premium for the earlier policy is not returnable and the premium for the later policy is returnable.