Marine Insurance

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When the ship intentionally changes its route or remains in port without cause then deviation in marine insurance happens. Thus, the deviation is the new route or delay of the ship. Unless the marine insurance states otherwise, there is a breach of the insurance contract by the party which is responsible for the deviation.

Deviation of Voyage

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

  • There is a deviation from the course of the voyage as mentioned in the policy document
  • The policy document does not mention the course of the voyage but it is the customary course for departure that usually follows

At the time of deviation, the voyage is altered. Thus, the marine insurer is free from its responsibilities. The marine insurance contract requires the insurance company to make payment only if it follows the stated port route. In case of any deviation, the insurer can refuse to settle the loss or damage.

A breach of contract occurs when any unjustified and voluntary deviation happens. In such a case, the insurance company has the right to terminate the policy.  If it would do so, the policyholder would also lose the benefit of immunity in the insurance contract. Thus, it 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. In case of unfavorable weather conditions or to save a life,  the marine insurance policy covers the deviation

Cases where the deviation is excused

Below are the following circumstances where a deviation can be excused.

  • Deviation occurs due to circumstances beyond the control of the policyholder
  • It is necessary for deviation to take place to ensure the safety of the ship or the insured items
  • In cases where deviation saves the human life
  • Where deviation happens to obtain medical or surgical aid for the person who is on board the ship

So there are other situations too which permit deviations. 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. J.S Ship took this step 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 to inspect the situation. The surveyor finds that J.S Ship lightened the consignment to avoid it from getting sunk hence saving 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 the Maldives via sea. Here, the company had a marine insurance policy. Therefore, it was confident that the insurer would cover any loss or damage. 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, the pirates attacked the ship while it was on the new route.  Luckily, after a week the crew members and cargo got rescued. 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.

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