The Voyage (continued)
46 Where the voyage contemplated by a marine policy is interrupted, by a peril insured against, at an intermediate port or place in such circumstances as, apart from the contract of affreightment, justify the master in landing and reshipping, or transhipping, the goods or movables and sending them to their destination, the insurer continues to be liable for a loss occurring on or after the landing or transhipment.
Marginal note:Premium to be arranged
47 (1) A reasonable premium is payable if insurance is effected at a premium to be arranged and no arrangement is made.
Marginal note:Additional premium
(2) A reasonable additional premium is payable if insurance is effected on the terms that an additional premium is to be arranged on the happening of a given event and that event happens but no arrangement is made.
Marginal note:Payment of premium
48 Unless otherwise agreed, the duty of the insured or the insured’s agent to pay the premium and the duty of the insurer to issue the marine policy to the insured or the insured’s agent are concurrent conditions, and the insurer is not required to issue the policy until the premium is paid or tendered.
Marginal note:Policy effected through broker
49 (1) Unless otherwise agreed, where a broker effects a marine policy on behalf of the insured,
(a) the broker is directly responsible to the insurer for the premium;
(b) the broker has, as against the insured, a lien on the policy for the amount of the premium and the broker’s charges in effecting the policy; and
(c) the insurer is directly responsible to the insured for any amount that may be payable in respect of losses or a returnable premium.
(2) Unless otherwise agreed, where a broker effects a marine policy on behalf of a person who employs the broker as a principal, the broker has a lien on the policy in respect of any balance on any insurance account that may be due to the broker from that person, unless, when the debt was incurred, the broker had reason to believe that the person was only an agent.
Marginal note:Acknowledgement of receipt of premium
50 Where a broker effects a marine policy on behalf of an insured, an acknowledgement in the policy of the receipt of the premium is, in the absence of fraud, conclusive as between the insurer and the insured, but not as between the insurer and the broker.
Assignment of Marine Policy
Marginal note:Marine policy assignable
51 (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
52 (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.
(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
53 (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
54 A loss may be a total loss or a partial loss.
Marginal note:Types of total loss
55 (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
56 (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.
(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
57 (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.
(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.
58 (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
59 (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.
(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
60 (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
61 (1) A partial loss is any loss that is not a total loss.
(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.
Marginal note:Types of partial losses
62 A partial loss may be a particular average loss, a general average loss, salvage charges or particular charges.
Marginal note:Particular average loss
63 (1) A particular average loss is a loss of the subject-matter insured that is caused by a peril insured against and is not a general average loss, but does not include particular charges.
Marginal note:Particular charges
(2) Particular charges are expenses incurred by or on behalf of an insured for the purpose of preserving the subject-matter insured from a peril insured against, but do not include a general average loss or salvage charges.
Marginal note:Salvage charges
64 (1) Salvage charges are charges recoverable under maritime law by a salvor independently of any contract, but do not include expenses incurred for services in the nature of salvage rendered by the insured or the insured’s agent, or any person hired by the insured or the insured’s agent, for the purpose of averting a loss by a peril insured against.
Marginal note:Recovery of salvage charges
(2) Subject to any express provision in the marine policy, salvage charges incurred for the purpose of averting a loss by a peril insured against may be recovered from the insurer as a loss by such a peril.
Marginal note:Recovery of other expenses
(3) The expenses referred to in subsection (1) that are not salvage charges may, when properly incurred, be recovered from the insurer as particular charges or as a general average loss, according to the circumstances under which they were incurred.
Marginal note:General average loss
65 (1) A general average loss is a loss caused by or directly consequential on a general average act, and includes a general average sacrifice and a general average expenditure.
Marginal note:General average act, sacrifice and expenditure
(2) A general average act is any extraordinary sacrifice or expenditure, known as a general average sacrifice and a general average expenditure, respectively, that is voluntarily and reasonably incurred in time of peril for the purpose of preserving the property from peril in a common adventure.
Marginal note:General average contribution
(3) Subject to the conditions imposed by maritime law, a person who incurs a general average loss is entitled to receive from the other interested persons a rateable contribution, known as a general average contribution, in respect of the loss.
Marginal note:Recovery of general average expenditure and general average sacrifice
(4) Subject to any express provision in the marine policy,
(a) an insured who incurs a general average expenditure may recover from the insurer in respect of the proportion of the loss falling on the insured; and
(b) an insured who incurs a general average sacrifice may recover from the insurer in respect of the whole loss, without having enforced the insured’s right to contribution from other persons.
Marginal note:Recovery of general average contribution
(5) Subject to any express provision in the marine policy, an insured who has paid, or is liable to pay, a general average contribution in respect of the subject-matter insured may recover the contribution from the insurer.
(6) Subject to any express provision in the marine policy, an insurer is not liable for a general average loss or a general average contribution, unless the loss was incurred for the purpose of averting, or in connection with the avoidance of, a peril insured against.
Marginal note:Where single ownership
(7) Where any ship, freight and goods, or any two of them, are owned by the same insured, the liability of the insurer for a general average loss or a general average contribution shall be determined as if they were owned by different persons.
Measure of Indemnity
Marginal note:Measure of indemnity
66 The measure of indemnity in respect of a loss under a marine policy is the amount that the insured can recover in respect of the loss under the policy, such amount not exceeding
(a) in the case of an unvalued policy, the insurable value of the subject-matter insured; or
(b) in the case of a valued policy, the value of the subject-matter insured specified by the policy.
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