| Copyright (c) Queen's Printer, Victoria, British Columbia, Canada |
IMPORTANT INFORMATION |
1 In this Act:
"action" includes counterclaim and setoff;
"freight" includes the profit derivable by a shipowner from the employment of the shipowner's ship to carry the shipowner's own goods or movables, as well as freight payable by a third party, but does not include passage money;
"movables" means any movable tangible property, other than the ship, and includes money, valuable securities and other documents;
"policy" means a marine policy.
2 A contract of marine insurance is a contract by which the insurer undertakes to indemnify the assured, in the manner and to the extent agreed in it, against marine losses, that is to say, the losses incident to marine adventure.
3 (1) A contract of marine insurance may, by its express terms or by usage of trade, be extended so as to protect the assured against losses on inland waters or on any land risk that may be incidental to any sea voyage.
(2) If a ship in course of building, the launch of a ship or any adventure analogous to a marine adventure, is covered by a policy in the form of a marine policy, the provisions of this Act, in so far as applicable, apply to it; but, except as by this section provided, nothing in this Act alters or affects any rule of law applicable to any contract of insurance other than a contract of marine insurance as defined by this Act.
4 (1) Subject to this Act, every lawful marine adventure may be the subject of a contract of marine insurance.
(2) In particular there is a marine adventure where
(a) any ship, goods or other movables are exposed to maritime perils, and such property is in this Act referred to as "insurable property";
(b) the earning or acquisition of any freight, passage money, commission, profit or other pecuniary benefit, or the security for any advances, loan or disbursements, is endangered by the exposure of insurable property to maritime perils;
(c) 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.
(3) "Maritime perils" means the perils consequent on or incidental to the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints and detainments of princes and peoples, jettisons, barratry and any other perils, either of the same kind or which may be designated by the policy.
5 (1) Every contract of marine insurance by way of gaming or wagering is void.
(2) A contract of marine insurance is deemed to be a gaming or wagering contract
(a) if the assured has not an insurable interest as defined by this Act, and the contract is entered into with no expectation of acquiring such an interest, or
(b) if the 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 subject to any other similar term,
but if there is no possibility of salvage a policy may be effected without benefit of salvage to the insurer.
6 (1) Subject to this Act, every person has an insurable interest who is interested in a marine adventure.
(2) In particular a person is interested in a marine adventure if the person stands in any legal or equitable relation to the adventure or to any insurable property at risk in it, in consequence of which the person may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss or by damage to it or by the detention of it, or may incur liability in respect of it.
7 (1) The assured must be interested in the subject matter insured at the time of the loss though the assured need not be interested when the insurance is effected; except that if the subject matter is insured "lost or not lost" the assured may recover although the assured may not have acquired that interest until after the loss, unless at the time of effecting the contract of insurance the assured was aware of the loss and the insurer was not.
(2) If the assured has no interest at the time of the loss, the assured cannot acquire interest by any act or election after the assured is aware of the loss.
8 (1) A defeasible interest is insurable, as also is a contingent interest.
(2) In particular, if the buyer of goods has insured them, the buyer has an insurable interest, even though the buyer might, at the buyer's election, have rejected the goods, or have treated them as at the seller's risk, by reason of the latter's delay in making delivery or otherwise.
10 (1) The insurer under a contract of marine insurance has an insurable interest in the insurer's risk and may reinsure in respect of it.
(2) Unless the policy otherwise provides, the original assured has no right or interest in respect of the reinsurance.
11 The lender of money on bottomry or respondentia has an insurable interest in respect of the loan.
12 The master or any member of the crew of a ship has an insurable interest in respect of that person's wages.
13 In the case of advance freight, the person advancing the freight has an insurable interest, in so far as the freight is not repayable in case of loss.
14 The assured has an insurable interest in the charges of any insurance that the assured may effect.
15 (1) If the subject matter insured is mortgaged, the mortgagor has an insurable interest in its full value and the mortgagee has an insurable interest in respect of any sum due or to become due under the mortgage.
(2) A mortgagee, consignee or other person having an interest in the subject matter insured may insure on behalf and for the benefit of other persons interested as well as for the person's own benefit.
(3) The owner of insurable property has an insurable interest in respect of its full value, even though some third person may have agreed, or be liable, to indemnify the owner in case of loss.
16 If the assured assigns or otherwise parts with the assured's interest in the subject matter insured, the assured does not thereby transfer to the assignee the assured's rights under the contract of insurance, unless there is an express or implied agreement with the assignee to that effect; but this section does not affect a transmission of interest by operation of law.
17 Subject to any express provision or valuation in the policy, the insurable value of the subject matter insured must be ascertained as follows:
(a) in insurance on a ship, the insurable value is the value, at the commencement of the risk, of the ship, including its outfit, provisions and stores for the officers and crew, money advanced for crew member's wages, and other disbursements, if any, incurred to make the ship fit for the voyage or adventure contemplated by the policy, plus the charges of insurance on the whole; the insurable value, in the case of a steamship, includes also the machinery, boilers and coals, oils and engine stores if owned by the assured, and, in the case of a ship engaged in a special trade, the ordinary fittings requisite for that trade;
(b) in insurance on freight, whether paid in advance or otherwise, the insurable value is the gross amount of the freight at the risk of the assured, plus the charges of insurance;
(c) in insurance on goods or merchandise, the insurable value is the prime cost of the property insured, plus the expenses of and incidental to shipping and the charges of insurance on the whole;
(d) in insurance on any other subject matter, the insurable value is the amount at the risk of the assured when the policy attaches, plus the charge of insurance.
18 A contract of marine insurance is a contract 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.
19 (1) Subject to this section, the assured must disclose to the insurer before the contract is concluded every material circumstance that is known to the assured, and the assured is deemed to know every circumstance that in the ordinary course of business ought to be known by the assured. If the assured fails to make such disclosure, the insurer may avoid the contract.
(2) Every circumstance is material that would influence the judgment of a prudent insurer in fixing the premium or determining whether the insurer will take the risk.
(3) In the absence of inquiry the following circumstances need not be disclosed, namely:
(a) a circumstance that diminishes the risk;
(b) a circumstance that is known or presumed to be known to the insurer, and the insurer is presumed to know matters of common notoriety or knowledge and matters which an insurer in the ordinary course of the insurer's business, as such, ought to know;
(c) a circumstance as to which information is waived by the insurer;
(d) a circumstance that it is superfluous to disclose by reason of any express or implied warranty.
(4) Whether any particular circumstance that is not disclosed is material or not is in each case a question of fact.
(5) The term "circumstance" includes any communication made to or information received by the assured.
20 Subject to the provisions of section 19 as to circumstances that need not be disclosed, where an insurance is effected for the assured by an agent, the agent must disclose to the insurer
(a) every material circumstance that is known to the agent, and an agent to insure 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
(b) every material circumstance that the assured is bound to disclose, unless it comes to the assured's knowledge too late to communicate it to the agent.
21 (1) Every material representation made by the assured or the assured's agent to the insurer during the negotiations for the contract, and before the contract is concluded, must be true. If it is untrue, the insurer may avoid the contract.
(2) A representation is material that would influence the judgment of a prudent insurer in fixing the premium or determining whether the insurer will take the risk.
(3) A representation may be either a representation as to a matter of fact or as to a matter of expectation or belief.
(4) A representation as to a matter of fact is true if it is substantially correct, that is to say, if the difference between what is represented and what is actually correct would not be considered material by a prudent insurer.
(5) A representation as to a matter of expectation or belief is true if it is made in good faith.
(6) A representation may be withdrawn or corrected before the contract is concluded.
(7) Whether a particular representation is material or not is in each case a question of fact.
22 A contract of marine insurance is deemed to be concluded when the proposal of the assured is accepted by the insurer, whether the policy is then issued or not. For the purpose of showing when the proposal was accepted, reference may be made to the slip or covering note or other customary memorandum of the contract.
23 A contract of marine insurance is inadmissible in evidence unless it is embodied in a marine policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded or afterwards.
24 A marine policy must specify all of the following:
(a) the name of the assured or of a person who effects the insurance on the assured's behalf;
(b) the subject matter insured and the risk insured against;
(c) the voyage or period of time, or both, as the case may be, covered by the insurance;
(d) the sum insured;
(e) the name of the insurer.
25 (1) A marine policy must be signed by or on behalf of the insurer, and in the case of a corporation the corporate seal is sufficient, but nothing in this section is to be construed as requiring the subscription of a corporation to be under seal.
(2) If a policy is subscribed by or on behalf of 2 or more insurers, each subscription, unless the contrary is expressed, constitutes a distinct contract with the assured.
26 If the contract is to insure the subject matter at and from, or from one place to another or others, the policy is called a "voyage policy", and where the contract is to insure the subject matter for a definite period of time the policy is called a "time policy". A contract for both voyage and time may be included in the same policy.
27 (1) The subject matter insured must be designated in a marine policy with reasonable certainty.
(2) The nature and extent of the interest of the assured in the subject matter insured need not be specified in the policy.
(3) If the policy designates the subject matter insured in general terms, it must be construed to apply to the interest intended by the assured to be covered.
(4) In the application of this section regard must be had to any usage regulating the designation of the subject matter insured.
28 (1) A policy may be either valued or unvalued.
(2) A valued policy is a policy that specifies the agreed value of the subject matter insured.
(3) Subject to this Act, and in the absence of fraud, the value fixed by the policy is, as between the insurer and assured, conclusive of the insurable value of the subject intended to be insured, whether the loss is total or partial.
(4) Unless the policy otherwise provides, the value fixed by the policy is not conclusive for the purpose of determining whether there has been a constructive total loss.
29 An unvalued policy is a policy that does not specify the value of the subject matter insured, but, subject to the limit of the sum insured, leaves the insurable value to be subsequently ascertained in the manner specified earlier in this Act.
30 (1) A floating policy is a policy that describes the insurance in general terms and leaves the name of the ship and other particulars to be defined by subsequent declaration.
(2) The subsequent declaration may be made by endorsement on the policy or in other customary manner.
(3) Unless the policy otherwise provides, the declarations must be made in the order of dispatch or shipment. They must, in the case of goods, comprise all consignments within the terms of the policy, and the value of the goods or other property must be honestly stated, but an omission or erroneous declaration may be rectified even after loss or arrival, provided the omission or declaration was made in good faith.
(4) Unless the policy otherwise provides, if a declaration of value is not made until after notice of loss or arrival, the policy must be treated as an unvalued policy as regards the subject matter of that declaration.
31 (1) A policy may be in the form in the Schedule to the Insurance (Marine) Act, R.S.B.C. 1979, c. 203.
(2) Subject to this Act, and unless the context of the policy otherwise requires, the terms and expressions mentioned in the Schedule referred to in subsection (1) must be construed as having the scope and meaning assigned to them in that Schedule.
32 (1) If an insurance is effected at a premium to be arranged, and no arrangement is made, a reasonable premium is payable.
(2) If an insurance is effected on the terms that an additional premium is to be arranged in a given event, and that event happens but no arrangement is made, then a reasonable additional premium is payable.
33 (1) If 2 or more policies are effected by or on behalf of the assured on the same adventure and interest or any part of them and the sums insured exceed the indemnity allowed by this Act, the assured is overinsured by double insurance.
(2) If the assured is overinsured by double insurance,
(a) the assured, unless the policy otherwise provides, may claim payment from the insurers in the order the assured may think fit, but the assured is not entitled to receive any sum in excess of the indemnity allowed by this Act,
(b) if the policy under which the assured claims is a valued policy, the assured must give credit as against the valuation for any sum received by the assured under any other policy without regard to the actual value of the subject matter insured,
(c) if the policy under which the assured claims is an unvalued policy, the assured must give credit, as against the full insurable value, for any sum received by the assured under any other policy, and
(d) if the assured receives any sum in excess of the indemnity allowed by this Act, the assured is deemed to hold the sum in trust for the insurers, according to their right of contribution among themselves.
34 (1) A warranty, in the following sections relating to warranties, means a promissory warranty, that is to say, a warranty by which the assured undertakes that some particular thing will or will not be done, or that some condition will be fulfilled, or by which the assured affirms or negatives the existence of a particular state of facts.
(2) A warranty may be express or implied.
(3) A warranty, as above defined, is a condition that must be exactly complied with, whether it is material to the risk or not. If it is not complied with, then, subject to any express provision in the policy, the insurer is discharged from liability as from the date of the breach of warranty, but without prejudice to any liability incurred by the insurer before that date.
35 (1) Noncompliance with a warranty is excused when, by reason of a change of circumstances, the warranty ceases to be applicable to the circumstances of the contract, or when compliance with the warranty is rendered unlawful by any subsequent law.
(2) If a warranty is broken, the assured cannot use the defence that the breach has been remedied and the warranty complied with before loss.
(3) A breach of warranty may be waived by the insurer.
36 (1) An express warranty may be in any form of words from which the intention to warrant is to be inferred.
(2) An express warranty must be included in or written on the policy or must be contained in a document incorporated by reference into the policy.
(3) An express warranty does not exclude an implied warranty unless it is inconsistent with it.
37 (1) If insurable property, whether ship or goods, is expressly warranted "neutral", there is an implied condition that the property will have a neutral character at the commencement of the risk, and that, so far as the assured can control the matter, its neutral character will be preserved during the risk.
(2) If a ship is expressly warranted "neutral", there is also an implied condition that, so far as the assured can control the matter, the ship will be properly documented, that is to say, that the ship will carry the necessary papers to establish the ship's neutrality, and that the ship will not falsify or suppress its papers or use simulated papers. If any loss occurs through breach of this condition, the insurer may avoid the contract.
38 There is no implied warranty as to the nationality of a ship or that the ship's nationality will not be changed during the risk.
39 If the subject matter insured is warranted "well" or "in good safety" on a particular day, it is sufficient if it is safe at any time during that day.
40 (1) In a voyage policy there is an implied warranty that at the commencement of the voyage the ship will be seaworthy for the purpose of the particular adventure insured.
(2) If the policy attaches while the ship is in port, there is also an implied warranty that the ship will at the commencement of the risk be reasonably fit to encounter the ordinary perils of the port.
(3) If the policy relates to a voyage that is performed in different stages, during which the ship requires different kinds of or further preparation or equipment, there is an implied warranty that at the commencement of each stage the ship is seaworthy in respect of the preparation or equipment for the purposes of that stage.
(4) A ship is deemed to be seaworthy when the ship is reasonably fit in all respects to encounter the ordinary perils of the seas of the adventure insured.
(5) In a time policy there is no implied warranty that the ship will be seaworthy at any stage of the adventure, but if, with the privity of the assured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness.
41 (1) In a policy on goods or other movables there is no implied warranty that the goods or movables are seaworthy.
(2) In a voyage policy on goods or other movables there is an implied warranty that at the commencement of the voyage the ship is not only seaworthy as a ship, but also that the ship is reasonably fit to carry the goods or other movables to the destination contemplated by the policy.
42 There is an implied warranty that the adventure insured is a lawful one, and that, so far as the assured can control the matter, the adventure will be carried out in a lawful manner.
43 (1) If the subject matter is insured by a voyage policy "at and from" or "from" a particular place, it is not necessary that the ship should be at that place when the contract is concluded, but there is an implied condition that the adventure will be commenced within a reasonable time, and that if the adventure is not so commenced the insurer may avoid the contract.
(2) The implied condition may be negatived by showing that the delay was caused by circumstances known to the insurer before the contract was concluded, or by showing that the insurer waived the condition.
44 If the place of departure is specified by the policy, and the ship, instead of sailing from that place, sails from any other place, the risk does not attach.
45 If the destination is specified in the policy, and the ship, instead of sailing for that destination, sails for any other destination, the risk does not attach.
46 (1) If, after the commencement of the risk, the destination of the ship is voluntarily changed from the destination contemplated by the policy, there is said to be a change of voyage.
(2) Unless the policy otherwise provides, if there is a change of voyage, the insurer is discharged from liability as from the time of change, that is to say, as from the time when the determination to change it is manifested, and it is immaterial that the ship may not in fact have left the course of voyage contemplated by the policy when the loss occurs.
47 (1) If a ship, without lawful excuse, deviates from the voyage contemplated by the policy, the insurer is discharged from liability as from the time of deviation, and it is immaterial that the ship may have regained its route before any loss occurs.
(2) There is a deviation from the voyage contemplated by the policy
(a) if the course of the voyage is specially designated by the policy and that course is departed from, or
(b) if the course of the voyage is not specifically designated by the policy, but the usual and customary course is departed from.
(3) The intention to deviate is immaterial; there must be a deviation in fact to discharge the insurer from the insurer's liability under the contract.
48 (1) If several ports of discharge are specified by the policy, the ship may proceed to all or any of them, but, in the absence of any usage or sufficient cause to the contrary, the ship must proceed to them, or those of them as the ship goes to, in the order designated by the policy. If the ship does not there is a deviation.
(2) If the policy is to "ports of discharge", within a given area, that are not named, the ship must, in the absence of any usage or sufficient cause to the contrary, proceed to them, or those of them as the ship goes to, in their geographical order. If the ship does not there is a deviation.
49 In the case of a voyage policy, the adventure insured must be prosecuted throughout its course with reasonable dispatch, and, if without lawful excuse it is not so prosecuted, the insurer is discharged from liability as from the time when the delay became unreasonable.
50 (1) Deviation or delay in prosecuting the voyage contemplated by the policy is excused
(a) if authorized by any special term in the policy,
(b) if caused by circumstances beyond the control of the master and the master's employer,
(c) if reasonably necessary in order to comply with an express or implied warranty,
(d) if reasonably necessary for the safety of the ship or subject matter insured,
(e) for the purpose of saving human life, or aiding a ship in distress where human life may be in danger,
(f) if reasonably necessary for the purpose of obtaining medical or surgical aid for any person on board the ship, or
(g) if caused by the barratrous conduct of the master or crew, if barratry is one of the perils insured against.
(2) When the cause excusing the deviation or delay ceases to operate, the ship must resume its course and prosecute its voyage with reasonable dispatch.
51 (1) A marine policy is assignable unless it contains terms expressly prohibiting assignment. It may be assigned either before or after loss.
(2) If a marine policy has been assigned so as to pass the beneficial interest in the policy, the assignee of the policy is entitled to sue on it in the assignee's own name. The defendant is entitled to make any defence arising out of the contract that the defendant would have been entitled to make if the action had been brought in the name of the person by or on behalf of whom the policy was effected.
(3) A marine policy may be assigned by endorsement on it or in other customary manner.
52 If the assured has parted with or lost the assured's interest in the subject matter insured, and has not, before or at the time of so doing, expressly or impliedly agreed to assign the policy, any subsequent assignment of the policy is inoperative; but nothing in this section affects the assignment of a policy after loss.
53 Unless otherwise agreed, the duty of the assured or the assured's agent to pay the premium and the duty of the insurer to issue the policy to the assured or the agent are concurrent conditions, and the insurer is not bound to issue the policy until payment or tender of the premium.
54 (1) Unless otherwise agreed, if a marine policy is effected on behalf of the assured by a broker, the broker is directly responsible to the insurer for the premium and the insurer is directly responsible to the assured for the amount that may be payable in respect of losses or in respect of returnable premium.
(2) Unless otherwise agreed, the broker has, as against the assured, a lien on the policy for the amount of the premium and the broker's charges in respect of effecting the policy; and, if the broker has dealt with the person who employs the broker as a principal, the broker has also 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.
55 If a marine policy effected on behalf of the assured by a broker acknowledges the receipt of the premium, the acknowledgment is, in the absence of fraud, conclusive as between the insurer and the assured, but not as between the insurer and broker.
56 (1) Subject to this Act, and unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, but, subject as aforesaid, the insurer is not liable for any loss that is not proximately caused by a peril insured against.
(2) In particular
(a) the insurer is not liable for any loss attributable to the willful misconduct of the assured, but, unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew;
(b) unless the policy otherwise provides, the insurer on ship or goods is not liable for any loss proximately caused by delay, although the delay is caused by a peril insured against;
(c) unless the policy otherwise provides, the insurer is not liable for ordinary wear and tear, ordinary leakage and breakage, inherent vice or nature of the subject matter insured or for any loss proximately caused by rats or vermin or for any injury to machinery not proximately caused by maritime perils.
57 (1) A loss may be either total or partial. Any loss other than a total loss, as defined in this Act, is a partial loss.
(2) A total loss may be either an actual total loss or a constructive total loss.
(3) Unless a different intention appears from the terms of the policy, an insurance against total loss includes a constructive as well as an actual total loss.
(4) If the assured brings an action for a total loss and the evidence proves only a partial loss, the assured may, unless the policy otherwise provides, recover for a partial loss.
(5) If goods reach their destination in specie, but by reason of obliteration of marks, or otherwise, they are incapable of identification, the loss, if any, is partial and not total.
58 (1) If the subject matter insured is destroyed, or so damaged as to cease to be a thing of the kind insured, or if the assured is irretrievably deprived of it, there is an actual total loss.
(2) In the case of an actual total loss no notice of abandonment need be given.
59 If the ship concerned in the adventure is missing, and after the lapse of a reasonable time no news of the ship has been received, an actual total loss may be presumed.
60 If, by a peril insured against, the voyage is interrupted at an intermediate port or place under circumstances as, apart from any special stipulation in the contract of affreightment, to justify the master in landing and reshipping the goods or other movables, or in transhipping them and sending them on to their destination, the liability of the insurer continues, notwithstanding the landing or transhipment.
61 (1) Subject to an express provision in the policy, there is a constructive total loss if the subject matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable, or because it could not be preserved from actual total loss without an expenditure which would exceed its value when the expenditure had been incurred.
(2) In particular, there is a constructive total loss
(a) if the assured is deprived of the possession of the assured's ship or goods by a peril insured against, and
(i) it is unlikely that the assured can recover the ship or goods, as the case may be, or
(ii) the cost of recovering the ship or goods, as the case may be, would exceed their value when recovered,
(b) in the case of damage to a ship, if the ship is so damaged by a peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired, and in estimating the cost of repairs, no deduction is to be made in respect of general average contributions to those repairs payable by other interests, but account is to be taken of the expense of future salvage operations and of any future general average contributions to which the ship would be liable if repaired, or
(c) in the case of damage to goods, if the cost of repairing the damage and forwarding the goods to their destination would exceed their value on arrival.
62 If there is a constructive total loss, the assured may either treat the loss as a partial loss or abandon the subject matter insured to the insurer and treat the loss as if it were an actual total loss.
63 (1) Subject to this section, if the assured elects to abandon the subject matter insured to the insurer, the assured must give notice of abandonment. If the assured fails to do so the loss can only be treated as a partial loss.
(2) Notice of abandonment may be given in writing or by word of mouth, or partly in writing and partly by word of mouth, and may be given in any terms that indicate the intention of the assured to abandon the assured's insured interest in the subject matter insured unconditionally to the insurer.
(3) Notice of abandonment must be given with reasonable diligence after the receipt of reliable information of the loss, but if the information is of a doubtful character the assured is entitled to a reasonable time to make inquiry.
(4) If notice of abandonment is properly given, the rights of the assured are not prejudiced by the fact that the insurer refuses to accept the abandonment.
(5) The acceptance of an abandonment may be either express or implied from the conduct of the insurer. The mere silence of the insurer after notice is not an acceptance.
(6) If notice of abandonment is accepted the abandonment is irrevocable. The acceptance of the notice conclusively admits liability for the loss and the sufficiency of the notice.
(7) Notice of abandonment is unnecessary if, at the time when the assured receives information of the loss, there would be no possibility of benefit to the insurer if notice were given to the insurer.
(8) Notice of abandonment may be waived by the insurer.
(9) If an insurer has reinsured the insurer's risk, no notice of abandonment need be given by the insurer.
64 (1) If there is a valid abandonment, the insurer is entitled to take over the interest of the assured in whatever may remain of the subject matter insured and all proprietary rights incidental to it.
(2) On the abandonment of a ship, the insurer of it is entitled to any freight in course of being earned, and that is earned by the ship subsequent to the casualty causing the loss, less the expenses of earning it incurred after the casualty. If the ship is carrying the owner's goods, the insurer is entitled to a reasonable remuneration for the carriage of them subsequent to the casualty causing the loss.
65 (1) A particular average loss is a partial loss of the subject matter insured, caused by a peril insured against, and that is not a general average loss.
(2) Expenses incurred by or on behalf of the assured for the safety or preservation of the subject matter insured, other than general average and salvage charges, are called particular charges. Particular charges are not included in particular average.
66 (1) Subject to any express provision in the policy, salvage charges incurred in preventing a loss by perils insured against may be recovered as a loss by those perils.
(2) "Salvage charges" means the charges recoverable under maritime law by a salvor independently of contract. They do not include the expenses of services in the nature of salvage rendered by the assured or the assured's agents, or any person employed for hire by them, for the purpose of averting a peril insured against. Those expenses, where properly incurred, may be recovered as particular charges or as a general average loss, according to the circumstances under which they were incurred.
67 (1) A general average loss is a loss caused by or directly consequential on a general average act. It includes a general average expenditure as well as a general average sacrifice.
(2) There is a general average act if any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperilled in the common adventure.
(3) If there is a general average loss, the party on whom it falls is entitled, subject to the conditions imposed by maritime law, to a rateable contribution from the other parties interested, and that contribution is called a general average contribution.
(4) Subject to an express provision in the policy, if the assured has incurred a general average expenditure, the assured may recover from the insurer in respect of the proportion of the loss that falls on the assured. In the case of a general average sacrifice, the assured may recover from the insurer in respect of the whole loss without having enforced the assured's right of contribution from the other parties liable to contribute.
(5) Subject to any express provision in the policy, if the assured has paid, or is liable to pay, a general average contribution in respect of the subject insured, the assured may recover for it from the insurer.
(6) In the absence of express stipulation, the insurer is not liable for any general average loss or contribution where the loss was not incurred for the purpose of avoiding, or in connection with the avoidance of, a peril insured against.
(7) If ship, freight and cargo, or any 2 of those interests, are owned by the same assured, the liability of the insurer in respect of general average losses or contributions is to be determined as if those subjects were owned by different persons.
68 (1) The sum that the assured can recover in respect of a loss on a policy by which the assured is insured, in the case of an unvalued policy to the full extent of the insurable value, or in the case of a valued policy to the full extent of the value fixed by the policy, is called the measure of indemnity.
(2) If there is a loss recoverable under the policy, the insurer, or each insurer if there is more than one, is liable for the proportion of the measure of indemnity that the amount of the insurer's subscription bears to the value fixed by the policy in the case of a valued policy, or to the insurable value in the case of an unvalued policy.
69 Subject to this Act and to an express provision in the policy, if there is a total loss of the subject matter insured
(a) if the policy is a valued policy, the measure of indemnity is the sum fixed by the policy;
(b) if the policy is an unvalued policy, the measure of indemnity is the insurable value of the subject matter insured.
70 If a ship is damaged, but is not totally lost, the measure of indemnity, subject to an express provision in the policy, is as follows:
(a) if the ship has been repaired, the assured is entitled to the reasonable cost of the repairs, less the customary deductions, but not exceeding the sum insured in respect of any one casualty;
(b) if the ship has been only partially repaired, the assured is entitled to the reasonable cost of the repairs, computed as above, and also to be indemnified for the reasonable depreciation, if any, arising from the unrepaired damage, provided that the aggregate amount must not exceed the cost of repairing the whole damage, computed as above;
(c) if the ship has not been repaired and has not been sold in a damaged state during the risk, the assured is entitled to be indemnified for the reasonable depreciation arising from the unrepaired damage, but not exceeding the reasonable cost of repairing that damage, computed as above.
71 Subject to an express provision in the policy, if there is a partial loss of freight, the measure of indemnity is the proportion of the sum fixed by the policy in the case of a valued policy, or of the insurable value in the case of an unvalued policy, that the proportion of freight lost by the assured bears to the whole freight at the risk of the assured under the policy.
72 If there is a partial loss of goods, merchandise or other movables, the measure of indemnity, subject to an express provision in the policy, is as follows:
(a) if part of the goods, merchandise or other movables insured by a valued policy is totally lost, the measure of indemnity is the proportion of the sum fixed by the policy that the insurable value of the part lost bears to the insurable value of the whole, ascertained as in the case of an unvalued policy;
(b) if part of the goods, merchandise or other movables insured by an unvalued policy is totally lost, the measure of indemnity is the insurable value of the part lost, ascertained as in case of total loss;
(c) if the whole or any part of the goods or merchandise insured has been delivered damaged at its destination, the measure of indemnity is the proportion of the sum fixed by the policy in the case of a valued policy, or of the insurable value in the case of an unvalued policy, that the difference between the gross sound and damaged values at the place of arrival bears to the gross sound value;
(d) "gross value" means the wholesale price or, if there is no wholesale price, the estimated value, with, in either case, freight, landing charges and duty paid beforehand, except that in the case of goods or merchandise customarily sold in bond, the bonded price is deemed to be the gross value, and "gross proceeds" means the actual price obtained at a sale where all charges on sale are paid by the sellers.
73 (1) If different species of property are insured under a single valuation, the valuation must be apportioned over the different species in proportion to their respective insurable values, as in the case of an unvalued policy. The insured value of any part of a species is that proportion of the total insured value of the same that the insurable value of the part bears to the insurable value of the whole, ascertained in both cases as provided by this Act.
(2) If a valuation has to be apportioned and particulars of the prime cost of each separate species, quality or description of goods cannot be ascertained, the division of the valuation may be made over the net arrived sound values of the different species, qualities or descriptions of goods.
74 (1) Subject to an express provision in the policy, if the assured has paid, or is liable for, any general average contribution, the measure of indemnity is the full amount of the contribution, if the subject matter liable to contribution is insured for its full contributory value; but, if the subject matter is not insured for its full contributory value, or if only part of it is insured, the indemnity payable by the insurer must be reduced in proportion to the underinsurance, and if there has been a particular average loss that constitutes a deduction from the contributory value, and for which the insurer is liable, that amount must be deducted from the insured value in order to ascertain what the insurer is liable to contribute.
(2) If the insurer is liable for salvage charges the extent of the insurer's liability must be determined on the same principle.
75 If the assured has effected an insurance in express terms against any liability to a third party, the measure of indemnity, subject to an express provision in the policy, is the amount paid or payable by the assured to the third party in respect of the liability.
76 (1) If there has been a loss in respect of any subject matter not expressly provided for in sections 1 to 75 of this Act, the measure of indemnity must be ascertained, as nearly as possible, in accordance with those sections, in so far as applicable to the particular case.
(2) Nothing in this Act relating to the measure of indemnity affects the rules relating to double insurance, or prohibits the insurer from disproving interest wholly or in part, or from showing that at the time of the loss the whole or any part of the subject matter insured was not at risk under the policy.
77 (1) If the subject matter insured is warranted free from particular average, the assured cannot recover for a loss of part, other than a loss incurred by a general average sacrifice, unless the contract contained in the policy is apportionable; but, if the contract is apportionable, the assured may recover for a total loss of any apportionable part.
(2) If the subject matter insured is warranted free from particular average, either wholly or under a certain percentage, the insurer is nevertheless liable for salvage charges, and for particular charges and other expenses properly incurred pursuant to the suing and labouring clause in order to avert a loss insured against.
(3) Unless the policy otherwise provides, if the subject matter insured is warranted free from particular average under a specified percentage, a general average loss cannot be added to a particular average loss to make up the specified percentage.
(4) For the purpose of ascertaining whether the specified percentage has been reached, regard must be had only to the actual loss suffered by the subject matter insured. Particular charges and the expenses of and incidental to ascertaining and proving the loss must be excluded.
78 (1) Unless the policy otherwise provides and subject to this Act, the insurer is liable for successive losses, even though the total amount of the losses may exceed the sum insured.
(2) If, under the same policy, a partial loss that has not been repaired or otherwise made good is followed by a total loss, the assured can only recover in respect of the total loss; but this section does not affect the liability of the insurer under the suing and labouring clause.
79 (1) If the policy contains a suing and labouring clause, the engagement entered into in that way is deemed to be supplementary to the contract of insurance, and the assured may recover from the insurer any expenses properly incurred pursuant to the clause, even if the insurer may have paid for a total loss, or even if the subject matter may have been warranted free from particular average, either wholly or under a certain percentage.
(2) General average losses and contributions and salvage charges as defined by this Act are not recoverable under the suing and labouring clause.
(3) Expenses incurred for the purpose of averting or diminishing any loss not covered by the policy are not recoverable under the suing and labouring clause.
(4) It is the duty of the assured and the assured's agents in all cases to take the measures as may be reasonable for the purpose of averting or minimizing a loss.
80 (1) If the insurer pays for a total loss, either of the whole or, in the case of goods, of any apportionable part of the subject matter insured, the insurer becomes entitled to take over the interest of the assured in whatever may remain of the subject matter paid for, and the insurer is subrogated to all the rights and remedies of the assured in and in respect of that subject matter as from the time of the casualty causing the loss.
(2) Subject to the foregoing provisions, if the insurer pays for a partial loss, the insurer acquires no title to the subject matter insured, or the part of it that may remain, but the insurer is subrogated to all rights and remedies of the assured in and in respect of the subject matter insured as from the time of the casualty causing the loss, in so far as the assured has been indemnified, according to this Act, by the payment for the loss.
81 (1) If the assured is overinsured by double insurance, each insurer is bound, as between that insurer and the other insurers, to contribute rateably to the loss in proportion to the amount for which that insurer is liable under that insurer's contract.
(2) If an insurer pays more than the insurer's proportion of the loss, the insurer is entitled to maintain an action for contribution against the other insurers, and is entitled to the remedies of a surety who has paid more than the surety's proportion of the debt.
82 If the assured is insured for an amount less than the insurable value or, in the case of a valued policy, for an amount less than the policy valuation, the assured is deemed to be the assured's own insurer in respect of the uninsured balance.
83 If the premium, or a proportionate part of it, is by this Act declared to be returnable
(a) if already paid, it may be recovered by the assured from the insurer, and
(b) if unpaid, it may be retained by the assured or the assured's agent.
84 If the policy contains a stipulation for the return of the premium, or a proportionate part of it, on the happening of a certain event, and that event happens, the premium, or, as the case may be, the proportionate part of it, is then returnable to the assured.
85 (1) If the consideration for the payment of the premium totally fails, and there has been no fraud or illegality on the part of the assured or the assured's agents, the premium is returnable to the assured.
(2) If the consideration for the payment of the premium is apportionable and there is a total failure of any apportionable part of the consideration, a proportionate part of the premium is, under the same conditions, returnable to the assured.
(3) In particular
(a) if the policy is void, or is avoided by the insurer as from the commencement of the risk, the premium is returnable, if there has been no fraud or illegality on the part of the assured; but if the risk is not apportionable and has once attached, the premium is not returnable,
(b) if the subject matter insured, or part of it, has never been imperilled, the premium, or, as the case may be, a proportionate part of it, is returnable; but if the subject matter has been insured "lost or not lost" and has arrived in safety at the time when the contract is concluded, the premium is not returnable unless at the time the insurer knew of the safe arrival,
(c) if the assured has no insurable interest throughout the currency of the risk, the premium is returnable, but this rule does not apply to a policy effected by way of gaming or wagering,
(d) if the assured has a defeasible interest which is terminated during the currency of the risk, the premium is not returnable,
(e) if the assured has overinsured under an unvalued policy, a proportionate part of the premium is returnable, and
(f) subject to the foregoing provisions, if the assured has overinsured by double insurance, a proportionate part of the several premiums is returnable; but if the policies are effected at different times, and any earlier policy has at any time borne the entire risk, or if a claim has been paid on the policy in respect of the full sum insured by it, no premium is returnable in respect of that policy, and when the double insurance is effected knowingly by the assured no premium is returnable.
86 (1) If 2 or more persons mutually agree to insure each other against marine losses there is said to be a mutual insurance.
(2) The provisions of this Act relating to the premium do not apply to mutual insurance, but a guarantee, or other arrangement agreed on, may be substituted for the premium.
(3) The provisions of this Act, in so far as they may be modified by the agreement of the parties, may in the case of mutual insurance be modified by the terms of the policies issued by the association or by the rules of the association.
(4) Subject to the exceptions mentioned in this section, this Act applies to a mutual insurance.
87 If a contract of marine insurance is in good faith effected by one person on behalf of another, the person on whose behalf it is effected may ratify the contract even after that person is aware of a loss.
88 (1) If any right, duty or liability would arise under a contract of marine insurance by implication of law, it may be negatived or varied by express agreement, or by usage, if the usage is such as to bind both parties to the contract.
(2) This section extends to any right, duty or liability declared by this Act that may be lawfully modified by agreement.
89 If by this Act any reference is made to reasonable time, reasonable premium or reasonable diligence, the question what is reasonable is a question of fact.
90 The rules of the common law, including the law merchant, except in so far as they are inconsistent with the express provisions of this Act, continue to apply to contracts of marine insurance.
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