MARINE INSURANCE LAW 10 10 MARINE INSURANCE LAW Marine Insurance Law Name of the Student Name of the University Author

Running head: MARINE INSURANCE LAW
Marine Insurance Law
Name of the Student
Name of the University
Author Note

MARINE INSURANCE LAW1
Question 1(a)
The issue arising from the given situation is the rights and obligations that the insurer
owns under the contract of insurance with Bora. Whether the claims made by Bora falls
within the obligations of the insurer and whether there are certain rights of the insurance that
has been breached under the contract of insurance. All these will be addressed under the
English law. For the purpose of discussing this issue this people will firstly address all the
legal provisions that are relevant to the situation. It will strive to apply such legal provisions
to the facts of the case. And finally this paper would strive to arrive at a conclusion.
The legislation governing the English law relating to marine insurances is the Marine
Insurance Act 19061. The term marine insurance has been defined under section 1 of this
Act2. A contract relating to marine insurance depicts a contract that has been undertaken by
the insurance for providing indemnity to the assured section 5 of the Act3. The manner and
extent to which the assurance of indemnity extends to, depends upon the agreement between
the insurer and the assured. The areas to which such assurance extends may include marine
losses, which depict the losses that have resulted from marine adventure. The marine
insurance can be explained with the case of Youell v Bland Welch & Co Limited (No 2)
[1992] 2 Lloyd's Rep. 1274. For the purpose of creating of valid contract of marine insurance,
the existence of an insurable interest is required. The term insurable interest has been defined
under. As per the section, a person needs to have a legal or equitable right relating to a
property being transported through the adventure and the destruction of which would cause a
loss to the person and the arrival of the same would cause a benefit for the purpose of
showing interest in a marine adventure. There needs to be an insurable interest for an
1 The Marine Insurance Act 1906
2 The Marine Insurance Act 1906, s 1.
3 The Marine Insurance Act 1906, s 5.
4 Youell v Bland Welch & Co Limited (No 2) [1992] 2 Lloyd's Rep

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individual issued for the purpose of availing a marine insurance policy. Any marine insurance
policy without having and insurable interest attached to it would be rendered as void and
would not cover any losses5.
The insurer, who has been providing assurance to the assured against the policy that has
been purchased by the assured relation to any insurable interest, would be conferred with
certain rights as well as imposed with certain obligations. The obligation imposed upon an
insurance, which needs to be extended with utmost importance is the exercise of good faith.
The concept of good faith as an obligation imposed upon the insurance has evolved with the
case of Carter v Boehm (1766) 3 Burr 19056. The concept of good faith as an obligation that
needs to be ensured by the insurer has been applicable to all insurance contracts. This
principle of good faith has further been codified under section 17 of the Marine Insurance
Act 19067. This section requires the contract relating to marine insurance to be based up in
good feet and good faith needs to be given utmost importance in such contracts. The
provision contained under the section requires both the parties to ensure good faith that is the
insurer and the assured. However, the main motive of this section is to provide remedy to the
insurer as to the prevention of misrepresentation that has the probability of being committed
by the policyholders. This section also requires the policyholder to furnish proper disclosures.
This section requires both the disclosure requirements as well as prevention of
misrepresentation by the policyholders prior to the stage of the contract. In case the policy
holder fails to furnish required disclosure as well as exercising good faith, the insurer will
have the right to repudiate the insurance contract. This is because the breach of the disclosure
requirement as well as good faith requirement would be considered as the breach of the
contract. However, the right pertaining to the insurer relating to the good faith being
5 Owen, A. "The Law of Insurance Warranties: A Problem Incapable of Solution?." (2019).
6 Carter v Boehm (1766) 3 Burr 1905
7 The Marine Insurance Act 1906, s 17

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exercised by the assured also extends to the policyholders. The policyholders are also
conferred with the right to be disclosed with all the material facts and right to be ensured
good faith being exercise by the insurer. Hence, the insurer is under an obligation to ensure
good faith being exercise by them while entering into a contract with the assured. It also
requires the insurer to extend genuine representations to the insured prior to the entering into
the contract8.
Moreover, there are certain rights that the insurance is entitled to be ensured with respect
to payment. Under section 79 of the Marine Insurance Act 19069, the insurer is conferred
with a right to subrogation. Under this section, all the rights, whether legal or equitable in
relation to the insurable interest of the assured is conferred upon the insurer when the insurer
has already made payment for a loss relating to the insurable interest. All the rights relating to
the insurable interest is severed from the assured and conferred upon the insurer. However,
such rights a subrogated with effect to the time when the casualty that has resulted in the loss
has occurred10. However, when the assurance has been paid with respect to partial loss, the
rights related to the insurable interest that he will acquire will be proportionate to the portion
of the loss that he has indemnified. The subrogation of rights relating to that subject matter
will be conferred upon the insurer with respect to the proportion of indemnification. Under
section 80 of this Act11, where there is a double insurance making the assured over insured
and the assured has been indemnified for losses by both the insurance, rights over the
insurable property would be conferred over both of the insurers in accordance with their
contribution in the amount of loss. The more amount the insurer pays, the more he will be
conferred with the right over the property. Under section 81 of this Act12, instances where the
8 Bugra, Aysegul. Insurance Law Implications of Delay in Maritime Transport. Informa Law from Routledge,
2017.
9 The Marine Insurance Act 1906, s 79.
10 Wang, Feng. Illegality in Marine Insurance Law. Informa Law from Routledge, 2016.
11 The Marine Insurance Act 1906, s 80.
12 The Marine Insurance Act 1906, s 81.