At the time of taking a marine insurance policy, it is necessary to mention the name of both the departure and destination ports, which comes under touch and stay clause. As per touch and stay clause in marine insurance, the ship should stay only at those ports which are clearly stated in the policy document. In case, the ports are not mentioned in the policy document; it is necessary for the ship to take the customary route and make sure to stay only on that port which comes in its way.
It means the vessel in the course of the voyage must touch and stay at all those ports which are clearly stated in the policy document. Further, the fact that the deviation did not increase the risk or the ship regained its position before any loss happened would not consider as non-deviation by the insurer who would still considered it as a deviation.
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In those situations where the ship goes to any other port, it would be termed as the deviation. In any case, deviation would be allowed if there are valid reasons behind it.
In case, where several ports are mentioned, the ship should touch or stay at all the ports or any one of them. In case, the ship doesn’t stay at the port mentioned in the policy document; the marine insurance company has all rights to reject the claim in case of loss or damage.
In those cases, where the ports are changed to either save the ship or the lives on board, the insurer would allow a change in ports and settle the claim, if any. In any case, change in port would be allowed only if there is a valid reason and as the policyholder, it would be your responsibility to prove that change in ports was needed to secure both lives and goods on board.
A few years ago, L.S Shipping signed an agreement with M.K.M Engineering to export the goods of the company to Middle East regions. In order to get coverage against various kinds of losses and damages, L.S Shipping purchased a marine insurance policy. As per the insurance policy, the insurer would offer financial coverage to L.S Shipping in case of any loss or damage. At the time of buying a marine insurance policy, L.S Shipping clearly stated the name of the ports where its ships would stay. It was clearly stated that in case the ship did not stay at a port mentioned in the policy document, it would be counted as a deviation. In that case, the marine insurance policy wouldn’t cover losses or damages which may arise due to deviation.
As M.K.M Engineering had to export engineering items to the Middle East, L.S Shipping decided to use its JV Ship. The ports where the ship would stay were clearly stated in the marine insurance policy document. However, the ship experienced some technical issues and couldn’t operate at full speed. As a result, there was a change in ports. However, on a changing port, some boxes containing engineering items got damaged while unloading.
As L.S Shipping had a marine insurance policy, it approached the insurer for the claim settlement. However, the insurer refused to settle the claim. The insurer appointed a surveyor who found out that L.S Shipping changed the ports without any valid reason. The loss happened at a new port which was different than what it was mentioned in the insurance document and therefore, the insurer decided to reject the claim.
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L.S Shipping argued that it had to change the port due to technical issues in their ship. However, the insurer clearly stated that it was the responsibility of L.S Shipping to ensure the proper functioning of its ships and performed all safety tests.
As L.S Shipping did not do proper safety tests on its ship, and due to which it had to change its port, the insurer was not responsible for paying for losses or damages which happened at a new port.