The indemnification of the marine insurer by the policy holder's uncle

Running head: CASE STUDY ASSIGNMENT
CASE STUDY ASSIGNMENT
Name of the Student:
Name of the University:
Author Note:

CASE STUDY ASSIGNMENT1
Answer 1:
Issue:
The issue that is to be discussed in the case study is whether the payment can be deducted
by the marine insurer which was made by the policy holder’s uncle from the settlement claim.
Rules:
Under the provisions of the Marine Insurance Act 1906, the insurer has the duty to
indemnify the insured person totally and the ownership of the insured item passes to the insurer
as per the process of subrogation. The insurer can cause the deduction of payment that is
received by the insured due to any insurance policy. Further, the insurer can deduct from 3rd
party to indemnify the insurer as per the principle of subrogation. The indemnity clause intends
to restore the financial position of the insured person to the state which the insured was before
the incident.
Under the provision of the common law if the insurer can prove that the cash gifts that
have been received by the insured person would be directly benefitting towards assisting his
financial position, the amount can be deducted from the final claim settlement. This type of
observation was made in the case Burnand v Rodocanachi [1882] 7 APP case 333 where it was
held by the House of Lords that the money received by the insured was purely a gift and hence
cannot be claimed by the insurers.

CASE STUDY ASSIGNMENT2
Application:
Applying the principle of section 79 of the Marine Insurance Act 1906, it can be seen
that the insurer has the liability to indemnify the policy holder totally and the ownership of the
cruiser would be passing to the insurer as per the process of subrogation.
Applying the decision of the case Burnand v Rodocanachi [1882] 7 APP case 333 it can
be observed that the cash received by the insured from his uncle is purely a gift and hence it
cannot be deducted by the marine insurer.
Conclusion:
Hence, it can be inferred that the payment cannot be deducted by the marine insurer
which was made by the policy holder’s uncle from the settlement claim.
Answer 2:
Issue:
The issue that is needed to be analyzed in the current scenario is whether the marine
insurer can exercise the rights of recovery from the third party.
Rule
As per the provision of the common law and section 79 of the Marine Insurance Act
1906 the principle of subrogation can be seen to be providing that an insurer has a right for
seeking the recovery of payment for indemnity that was made to the insured person from any
third person who can be held liable for the loss. This observation can be seen in the decision of