Marine insurance is a form of insurance that has been in existence since the ancient times of trade. The marine insurance policy provides coverage against various named and unnamed perils that cause loss or damage to the cargo, ship, or vessel during the transport of the property insured. Warranty is one of the important features of any marine insurance contract as it defines the scope of the insurance company’s liability. It decides whether the insured can get compensation in a particular situation for the loss or damage caused to the matter insured. Warranties in marine insurance ensure there are no disputes and ensure adherence to the promise. For better buying decision if is crucial to understand what are the 3 types of implied warranties in marine insurance.
Marine insurance contract comes with two main types of warranties- express warranties and implied warranties. Express warranties are the clearly stated warranties in the marine insurance contract. On the other hand, implied warranties are the warranties in the marine insurance contract that are not stated in the policy but are assumed to be incorporated in the marine insurance policy by custom, law, or general agreement. Warranties in marine insurance are crucial, and even a minor breach of these warranties can turn the marine insurance contract null and void. The insured needs to be cautious as the claim can be totally denied if there is any breach of warranty. Let us learn more about implied warranties and the types of implied warranties in marine insurance.
Types of implied warranties in marine insurance:
Implied warranties are promises that are not explicitly (in an oral agreement or in the written form) stated in the marine insurance policy. However, implied warranties are mutually understood by both the parties (insurer and the insured) to the marine insurance contract as they are incorporated by the law. There are three types of implied warranties in marine insurance that play a crucial role. Let’s take a look at these implied warranties in marine insurance.
Three types of implied warranties in marine insurance:
Seaworthiness of ship:
This means the ship used for the transportation of the insured cargo must be seaworthy. A ship is considered seaworthy when it is well-equipped, well-constructed, and capable of withstanding the perils of the sea. The ship must also be capable of transporting the insured property. The Seaworthiness of a ship is not just about the physical fitness of the ship; it also includes the expertise of crew members, equipment adequacy in the ship, and its ability to carry the insured cargo.
However, it is important to know that deciding the seaworthiness of a ship is a subjective matter. Hence, it may differ for each vessel at different places and times. For example, a ship that is seaworthy in the summer season may not be seaworthy in the rainy or winter season. Only until the time of the sailing of the ship is the implied warranty applied.
No deviation:
In a marine insurance policy, the insurance company is liable to pay for the insured journey and a specified or prescribed route. In this case, a prescribed or regular route is an implied warranty in marine insurance. If there is any deviation from the specified route, the insurance company’s liability ends there. If the deviation is intentional, the marine insurance company is not responsible for covering the changed route.
The legality of the voyage:
A marine insurance policy implies that the insured voyage must be lawful and carried out legally.
To sum up, it is important for the Insured to know what are the 3 types of implied warranties in marine insurance to ensure there is no breach of warranty. In case of any non-adherence to the warranties, it can make the marine insurance contract null and void. Hence, be aware of all the important features of a marine insurance contract before you avail of the coverage.
About The Author
Simran
MBA Insurance and Risk
With extensive experience in the insurance industry, Simran is a seasoned writer specializing in articles on marine insurance for SecureNow. Drawing from 5 years of expertise in the field, she possesses a comprehensive understanding of the complexities and nuances of marine insurance policies. Her articles offer valuable insights into various aspects of marine insurance, including cargo protection, hull insurance, and liability coverage for marine-related risks. Renowned for their insightful analysis and informative content, Simran is committed to providing readers with actionable information that helps them navigate the intricacies of marine insurance with confidence.
