Marine Insurance Warranty

In Marine Insurance, the word warranty has a very specific meaning. It is an undertaking by the insured to observe certain conditions. The rule is embodied in Section 33 of the Marine Insurance Act which states that “A warranty…is a condition which must be exactly complied with, whether it is material to the risk or not. If it be not so complied with…the insurer is discharged from liability.”

For example, if there is a condition relating to specific types of packaging for the insured goods, which are not adhered to, the claim, in the event of a loss, may be disallowed on the grounds that the goods were improperly packed.

This is regardless of the fact that the loss was not in any way due to the packaging.

A- Express Warranties: This is an undertaking actually written into the contract to perform a certain act. Failure to carry out the condition may well result in the policy being declared void.

B- Implied Warranties: In this case the law regards certain conditions as implied part of the insurance contract, although they may not be specifically stated.

In marine insurance there are two warranties that fall into this category:

1- at the commencement of the risk the venture must be legal to the extent that the insured is in a position to control it.
2- that the vessel is seaworthy, that it is fit for the proposed voyage.