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The Marine Insurance Act 1906 (8 Edw. 7 c.41) is a UK Act of Parliament regulating
marine insurance Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch o ...
. The Act applies both to "ship & cargo" marine insurance, and to P&I cover. The Act was drafted by Sir Mackenzie Dalzell Chalmers, who had earlier drafted the Sale of Goods Act 1893. The Act is a codifying act, that is to say, it attempts to collate existing common law and present it in a statutory (i.e. “codified”) form. In the event, the Act did more than merely codify the law, and some new elements were introduced in 1906. The Marine Insurance Act 1906 has been highly influential, as it governs not merely English Law, but it also dominates marine insurance worldwide through its wholesale adoption by other jurisdictions. Two modern statutes, the Consumer Insurance (Disclosure and Representations) Act 2012 (“CIDRA”) and the
Insurance Act 2015 The Insurance Act 2015 (2015 c.4) is a United Kingdom Act of Parliament which makes significant reforms to insurance law. It came into effect on 12 August 2016, and follows on from the Consumer Insurance (Disclosure and Representations) Act 2012 ...
have made amendments to the law of insurance.


Overview

The most important sections of this Act include: :s.4: a policy without insurable interest is void. :s.17: imposes a duty on the insured of ''
uberrimae fides ''Uberrima fides'' (sometimes seen in its genitive form ''uberrimae fidei'') is a Latin phrase meaning "utmost good faith" (literally, "most abundant faith"). It is the name of a legal doctrine which governs insurance contracts. This means that ...
'' (as opposed to ''
caveat emptor ''Caveat emptor'' (; from ''caveat'', "may he/she beware", a subjunctive form of ''cavēre'', "to beware" + ''ēmptor'', "buyer") is Latin for "Let the buyer beware". It has become a proverb in English. Generally, ''caveat emptor'' is the contra ...
''); i.e. that questions must be answered honestly and the risk not misrepresented. :s.18: the proposer of the insurer has a duty to disclose all material facts relevant to the acceptance and rating of the risk. Failure to do so is known as ''non-disclosure'' or ''concealment'' (there are minor differences in the two terms) and renders the insurance voidable by the insurer. :s.33(3): ''If warrantybe not
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complied with, then, subject to any express provision in the policy, the insurer is discharged from liability as from the date of the breach of warranty, but without prejudice to any liability incurred by him before that date.'' :s.34(2): where a warranty has been broken, it is no defence to the insured that the breach has been remedied, and the warranty complied with, prior to the loss. :s.34(3): a breach of warranty may be ''
waived A waiver is the voluntary relinquishment or surrender of some known right or privilege. Regulatory agencies of state departments or the federal government may issue waivers to exempt companies from certain regulations. For example, a United St ...
'' by the insurer. :s.50: a policy may be assigned. Typically, a shipowner might assign the benefit of a policy to the ship-mortgagor. :ss.60-63: deals with the issues of a constructive total loss. The insured can, by notice, claim for a constructive total loss with the insurer becoming entitled to the ship or cargo if it should later turn up. (By contrast an ''actual total loss'' describes the physical destruction of a vessel or cargo.) :s.79: deals with subrogation; ie. the rights of the insurer to stand in the shoes of an indemnified insured and recover salvage for his own benefit. Schedule 1 of the Act contains a list of definitions; schedule 2 contains the model policy wording.


Reform

Two new statutes, the Consumer Insurance (Disclosure and Representations) Act 2012 (“CIDRA”) and the
Insurance Act 2015 The Insurance Act 2015 (2015 c.4) is a United Kingdom Act of Parliament which makes significant reforms to insurance law. It came into effect on 12 August 2016, and follows on from the Consumer Insurance (Disclosure and Representations) Act 2012 ...
have addressed insurance in general, and have amended the law in several ways. Part 5 of the Insurance Act 2015 addresses "Good faith" as follows: * Section 14 provides that "any rule of law permitting a party to a contract of insurance to avoid the contract on the ground that utmost good faith has not been observed by the other party is abolished. * Accordingly, s,14(3) amends s.17 of the Marine Insurance Act 1906 to read: "A contract of marine insurance is a contract based upon the utmost good faith" and that section's subsequent words: "and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party" are now omitted.


See also

* Airmic *
UK commercial law United Kingdom commercial law is the law which regulates the sale and purchase of goods and services, when doing business in the United Kingdom. History *Lex Mercatoria * Hanseatic league * Guild * Mercantilism * Freedom of contract *'' Laissez ...
*
Marine insurance Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch o ...
* Seaworthiness (law)


Notes

{{UK legislation United Kingdom Acts of Parliament 1906 United Kingdom contract law Insurance legislation Marine insurance