Marine Insurance Act (S.C. 1993, c. 22)

Marginal note:Disclosure by insured

• 21 (1) Subject to this section, an insured must disclose to the insurer, before the contract is concluded, every material circumstance that is known to the insured.

• Marginal note:Disclosure by agent of insured

  (2) Subject to this section, an agent who effects insurance for an insured must disclose to the insurer, before the contract is concluded,

  • (a) every material circumstance that is known to the agent; and

  • (b) every material circumstance that the insured must disclose, unless the insured learned of it too late to communicate it to the agent.

• Marginal note:Material circumstance

  (3) A circumstance is material if it would influence the judgment of a prudent insurer in fixing the premium or determining whether to take the risk.

• Marginal note:Question of fact

  (4) Whether any circumstance that is not disclosed is material or not is a question of fact.

• Marginal note:Circumstances not disclosed

  (5) In the absence of any inquiry, the following circumstances need not be disclosed:

  • (a) any circumstance that diminishes the risk;

  • (b) any circumstance that is known to the insurer;

  • (c) any circumstance as to which information is waived by the insurer; and

  • (d) any circumstance the disclosure of which is superfluous by reason of any express warranty or implied warranty.

• Marginal note:Presumptions

  (6) For the purposes of this section,

  • (a) an insured is deemed to know every circumstance that, in the ordinary course of business, ought to be known by the insured;

  • (b) an agent is deemed to know every circumstance that, in the ordinary course of business, ought to be known by, or to have been communicated to, the agent; and

  • (c) an insurer is presumed to know circumstances of common notoriety and every circumstance that, in the ordinary course of an insurer’s business, ought to be known by an insurer.

• Marginal note:Effect of non-disclosure

  (7) If an insured or an agent of an insured fails to make a disclosure as required by this section, the insurer may avoid the contract.

• Marginal note:Definition of “circumstance”

  (8) In this section, circumstance includes any communication made to, or information received by, the insured.

Marginal note:Representations by insured or agent

• 22 (1) Every material representation made by the insured or the insured’s agent to the insurer during the negotiations for the contract and before the contract is concluded must be true.

• Marginal note:Material representation

  (2) A representation is material if it would influence the judgment of a prudent insurer in fixing the premium or determining whether to take the risk.

• Marginal note:Question of fact

  (3) Whether any representation is material or not is a question of fact.

• Marginal note:Types of representations

  (4) A representation may be as to a matter of fact or as to a matter of expectation or belief.

• Marginal note:Fact

  (5) A representation as to a matter of fact is deemed to be true if the difference between what is represented and what is actually correct would not be considered material by a prudent insurer.

• Marginal note:Expectation or belief

  (6) A representation as to a matter of expectation or belief is deemed to be true if it is made in good faith.

• Marginal note:Withdrawal or correction

  (7) A representation may be withdrawn or corrected before a contract is concluded.

• Marginal note:Effect of false representations

  (8) If any material representation made by the insured or the insured’s agent to the insurer during the negotiations for the contract is not true and is not withdrawn or corrected before the contract is concluded, the insurer may avoid the contract.

Conclusion and Ratification of Contracts

Marginal note:When contract is deemed to be concluded

23 A contract is deemed to be concluded when the proposal of the insured is accepted by the insurer, whether the marine policy is then issued or not, and for the purpose of establishing when the proposal is accepted, the slip or covering note or other customary memorandum of the contract may be referred to.

Marginal note:Ratification

24 A contract effected in good faith by a person on behalf of another person may be ratified by that other person even after the other person becomes aware of a loss.

The Marine Policy

Marginal note:Marine policy required

• 25 (1) A contract is inadmissible in evidence, unless it is evidenced by a marine policy in accordance with this Act.

• Marginal note:Issue of marine policy

  (2) A marine policy may be executed and issued when the contract is concluded or afterwards.

Marginal note:Contents of marine policy

26 A marine policy must specify

• (a) the name of the insured or of a person who effects the insurance on behalf of the insured;

• (b) the subject-matter insured;

• (c) the perils insured against;

• (d) the voyage or period, or both, covered by the insurance;

• (e) the sum insured; and

• (f) the name of the insurer.

Marginal note:Signature of insurer

• 27 (1) A marine policy must be signed by or on behalf of the insurer.

• Marginal note:Exception

  (2) Notwithstanding subsection (1), where the insurer is a corporation, the corporate seal is sufficient.

• Marginal note:Subscription by two or more insurers

  (3) Where a marine policy is subscribed by or on behalf of two or more insurers, each subscription, unless the contrary is expressed, constitutes a distinct contract with the insured.

Marginal note:Specification of subject-matter

• 28 (1) A marine policy must specify the subject-matter insured with reasonable certainty, but need not specify the nature and extent of the interest of the insured in that subject-matter.

• Marginal note:Specification in general terms

  (2) A marine policy that specifies the subject-matter insured in general terms shall be construed to apply to the interest intended by the insured to be covered.

• Marginal note:Usage

  (3) Any usage regulating the specification of the subject-matter insured shall be taken into consideration in applying this section.

Marginal note:Voyage and time policies

• 29 (1) A marine policy may be a voyage policy or a time policy.

• Marginal note:Voyage policy

  (2) A marine policy is a voyage policy if the contract insures the subject-matter “at and from”, or “from”, one place to another place or other places.

• Marginal note:Time policy

  (3) A marine policy is a time policy if the contract insures the subject-matter for a definite period.

• Marginal note:Combined policies

  (4) A marine policy may include a contract insuring the subject-matter as described in subsections (2) and (3).

Marginal note:Valued and unvalued policies

• 30 (1) A marine policy may be a valued policy or an unvalued policy.

• Marginal note:Valued policy

  (2) A marine policy is a valued policy if it specifies the agreed value of the subject-matter insured.

• Marginal note:Unvalued policy

  (3) A marine policy is an unvalued policy if it does not specify the value of the subject-matter insured and, subject to the limit of the sum insured, leaves the value to be determined in accordance with section 19.

• Marginal note:Value specified

  (4) Subject to this Act and in the absence of fraud, the value specified by a valued policy is, as between the insurer and the insured, conclusive of the insurable value of the subject-matter intended to be insured, regardless of whether any loss is a total loss or a partial loss.

• Marginal note:Idem

  (5) Unless a valued policy otherwise provides, the value specified by the policy is not conclusive for the purpose of determining whether there has been a constructive total loss.

Marginal note:Floating policy

• 31 (1) A marine policy may be a floating policy, that is to say, a policy that describes the insurance in general terms and leaves the name of the ship and other particulars to be defined by subsequent declarations, either by endorsement on the policy or in any other customary manner.

• Marginal note:Declarations

  (2) Unless a floating policy otherwise provides, declarations must be made in the order of dispatch or shipment and must, in the case of goods, include all consignments within the terms of the policy and honestly state the value of the goods.

• Marginal note:Rectification

  (3) An omission in a declaration or an erroneous declaration may be rectified even after loss or arrival if the omission or declaration was made in good faith.

• Marginal note:Idem

  (4) Unless a floating policy otherwise provides, where a declaration of value is not made until after notice of loss or arrival, the policy shall be treated as an unvalued policy with respect to the subject-matter of that declaration.

Warranties

Marginal note:Definition of “warranty”

• 32 (1) In this section and sections 33 to 39, warranty means a promissory warranty by which the insured

  • (a) undertakes that some particular thing will or will not be done or that some condition will be fulfilled; or

  • (b) affirms or negates the existence of particular facts.

• Marginal note:Types of warranty

  (2) A warranty may be an express warranty or an implied warranty.

Marginal note:Express warranties

• 33 (1) An express warranty may be in any form of words from which the intention to warrant may be inferred.

• Marginal note:Inclusion in policy

  (2) An express warranty must be included in, or written on, the marine policy or be contained in a document incorporated by reference into the policy.

• Marginal note:Exclusion of implied warranty

  (3) An express warranty does not exclude an implied warranty, unless they are inconsistent.

Marginal note:Warranty of legality

34 There is an implied warranty in every marine policy that the marine adventure insured is lawful and, in so far as the insured has control, will be carried out in a lawful manner.

Marginal note:No implied warranty of nationality

35 There is no implied warranty in any marine policy as to the nationality of a ship or that the nationality of a ship will not be changed during the risk.

Marginal note:Warranty of neutrality

• 36 (1) Where in any marine policy insurable property is expressly warranted to be neutral, there is an implied condition in the policy

  • (a) that the property will have a neutral character at the commencement of the risk and that, in so far as the insured has control, that character will be preserved during the risk; and

  • (b) where the property is a ship, that, in so far as the insured has control, the papers necessary to establish the neutrality of the ship will be carried on the ship and will not be falsified or suppressed and no simulated papers will be used.

• Marginal note:Breach of condition

  (2) If any loss occurs through a breach of the implied condition referred to in paragraph (1)(b), the insurer may avoid the contract.