A warranty in an insurance policy is a statement of the promise made by the insured to either perform or abstain from certain actions during the policy’s duration. The policyholder affirms or denies specific facts related to the policy. There are two types of Warranties in marine insurance: Express and Implied warranties. This article lets us know how to differentiate between these two types of warranties in marine insurance. It is crucial to understand Express warranty versus Implied warranty in marine insurance, as the lack of clarity can lead to disputes and coverage issues.
Warranties should not be treated as mere conditions but as factual statements. Breaking a warranty in an insurance policy can have serious consequences, as warranties are strongly emphasised. Regardless of the warranty’s significance, a breached warranty can render the insurance contract null and void.
Express warranty in Marine Insurance
Express warranties are written statements that are included in an insurance policy and can be found in standard clauses, which are mentioned as the Institute Clauses. There are several types of express warranties that are commonly used, including:
- warranties that set limits on where the insured is allowed to operate,
- warranties regarding the date of departure,
- warranties about the number of crew members onboard,
- warranties against towing,
- warranties concerning additional insurance, and
- warranties requiring the insured to act with reasonable dispatch in all circumstances under their control.
Implied Warranties in Marine Insurance
Implied warranties are not explicitly mentioned in the insurance policy document. Instead, they are understood by both parties involved in the insurance contract and therefore carry the same weight as express warranties in terms of their binding nature.
Types of Implied Warranties in Marine Insurance
Marine insurance recognises three types of implied warranties, which include:
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The implied warranty of the vessel’s seaworthiness
The ship’s seaworthiness requires it to be well-equipped, constructed, and able to withstand the voyage’s stresses. The determination of seaworthiness is subjective and may vary for each vessel at different times and locations. A ship may be seaworthy for summer but not suitable for winter. Seaworthiness also includes the adequacy of equipment, the expertise of crew members, and the consignment. The ship must be cargo-worthy and fit to carry the insured cargo. However, the warranty of seaworthiness does not apply to the cargo, as the cargo owner may not be familiar with the shipping business. The ship must be seaworthy at the commencement of the voyage and at different stages if the voyage is to be completed in stages.
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The legality of the Marine adventure for implied warranty
The warranty of legality is an implied warranty that cannot be waived. This warranty stipulates that if the voyage is deemed illegal according to the laws of the country whose flag the ship is flying, the insurance becomes null and void.
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The warranty against any type of deviation during the voyage.
No deviation: The insurer’s liability in marine insurance ends if there is a deviation from the specified or normal route. If a ship deviates from its fixed path, the insurer’s responsibility ceases, but this will not be the case if the ship returns to its original path before the loss. The insurer can only forgo responsibility if there is an actual deviation and not just the intention to deviate.
However, there are certain exceptions to the warranties in marine insurance. The term “Exceptions of Warranties” refers to circumstances under which the implied or express warranties in a marine insurance policy are waived. These exceptions may include situations such as:
- When delay or deviation is required by a specific warranty of the insurance policy.
- When delay or deviation is necessary for the safety of the ship or human lives.
- When delay or deviation was beyond the control of the crew.
In summary, a clear grasp of the distinctions between Express warranty versus Implied warranty in marine insurance is essential for informed and secure maritime risk management. Express warranties are explicit statements made by the insurer regarding what is covered in a policy, while implied warranties are those that arise from the law or common practice and are deemed to be included in an insurance contract unless expressly excluded. Businesses must grasp these distinctions in marine insurance to comprehend their coverage and potential liabilities in case of a claim.
