Marine Insurance

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Deviation in marine insurance happens when the ship intentionally changes its route or remains in port without cause, here, the new route or delay of the ship would be called deviation. Unless the marine insurance states otherwise, there is a breach of the insurance contract by the party which is responsible for the deviation.

As per Indian marine insurance Act, 1963, there would be a deviation from the voyage where-

  • The deviation is from the course of voyage which is specifically mentioned in the policy document
  • The course of the voyage is not mentioned in the policy document, but it is customary course for departure that usually follows

The moment the deviation happens, the voyage is altered and the marine insurer is free from its responsibilities. As per the marine insurance contract, the insurance company is liable to make payment only if the port route which is stated in the policy document, is also followed. In case of any deviation, the insurer can refuse to settle the loss or damage.

Any unjustified and voluntary deviation would be considered as the breach of contract. In such a case, the insurance company is right for terminating the policy, and if it would do so, the policyholder would also lose the benefit of immunity in the insurance contract and thus, would have to bear all losses or damages by own.

Read more: What is Inland Transit Coverage in Marine Insurance?

However, there would be no breach, if a ship deviates from the path on its own. Like in case of unfavourable weather condition or to save the life, deviation would be covered by the marine insurance policy.

The following are the circumstances under which deviation would be excused=

  • Where deviation happens due to circumstances which are beyond the control of the policyholder
  • Where deviation is necessary to ensure the safety of the ship or the insured items
  • Where deviation is required for saving the human life
  • Where deviation happens to obtain medical or surgical aid for the person who is onboard the ship

There could be other situations as well where deviation would be permitted, and therefore, read your marine insurance policy document for more information.

Case: 1

J.S Ship was carrying a cargo of wheat when it started raining heavily. The rainwater damaged a substantial part of the steamer, and then the captain of the steamer decided to throw off some consignment in the water to avoid the ship from getting the sink. The step was taken by J.S Ship in order to save the lives of crew members who otherwise would have sunk in the water.

In this case, as the owner of J.S Ship had a marine insurance policy, it approached the insurer for the claim settlement. Here, the insurer appointed a surveyor who inspected the situation and found that J.S Ship had to lighten the consignment in order to avoid it from getting sunk and save the lives of other people on-board. Due to this reason, the marine insurance company agreed to settle the claim of J.S Ship as per the marine insurance contract.

Case: 2

L.S Fruits sent its consignment of oranges to a company situated in Maldives via sea. Here, the company had a marine insurance policy and therefore, it was confident that any loss or damage would be covered by the insurer. However, when the ship was underway, the captain decided to change the route in order to avoid the sea traffic and reach its destination in advance.

However, when the ship was on the new route, it was attacked by pirates. Luckily, crewmembers and cargo were rescued after a week, however, L.S Fruits had to incur heavy losses.

As the company had a marine insurance policy, it approached the insurer to cover the losses. However, the insurer refused to settle the claim as the deviation happened. Without any valid reason, the ship deviated from its original route, and loss happened on the new route, and therefore, the insurer was not liable to pay the compensation.