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Insurance Ch. 8 - Coggle Diagram

- - - - D. Insurable Interest in Marine Insurance
        
        E. Concealment and Misrepresentation
        
        F. Implied Warranties -
        
        G. Kinds of Losses covered
        
        H. Measure of Indemnity
        
        I. Application: Piracy on the High Seas
        
        Dependent if policy is valued or open.
        
        Valued Policy -
        
        GR - Generally, price agreed upon is conclusive.
        
        XCPN - Except, when there is bottomry or respondentia before its insurance without the knowledge of the person procuring the insurance at which point they may show the real value.
        
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        1. Total loss
        
        2. Partial Loss - Every loss that is not total.
        
        a. Actual Total loss IC 132- when caused by any of the following:
        
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        b. Constructive Loss IC 141 - One which gives to a person insured a right to abandon.
        
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        Warranties - Promises made by the insured in the policy that statements affecting the validity of the contract are true. Generally, expressly stated in the policy. To eliminate specific potential increases of hazard owing to actions of the insured or condition of property.
        
        Marine Insurance - Unique in the sense that there are implied warranties in the policy through law without need to mention them in the pollicy.
        
        Seaworthiness of Vessel (IC 115)
        
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        Obligations of the Parties
        
        A. Disclose and Communicate
        
        All facts within his knowledge which are material to the contract and as to which he makes no warranty and which the other has no means of ascertaining (IC 28)
        
        All information he possesses material to the risk EXCEPT the following: (IC 30)
        
        Those which the Other Knows
        
        Those which the other ought to know
        
        When other waives communication
        
        Those which prove the existence of a risk excluded by warranty and not material
        
        Those which relate to a risk excepted by a policy
        
        B. To state the exact and whole truth in relation to all matters that he represents, or upon inquiry disclose or assumes to disclose
        
        Concealment - Here, information of the belief or expectation of a third person in reference to a material fact IS material and must be disclosed. (IC 110
        
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        Breadth of Information - Generally, concealment and misrepresentation rules in marine insurance are stricter. The Code requires a broader spectrum of information to be disclosed.
        
        Ratio - Historically, insurer relied heavily on insured for facts affecting the degree of risk. Insurer had great difficulty in obtaining information about he character of the insurable property under marine insurance in contrast to other non-life insurance subjects.
        
        Definition - Object of the insurance contract. Relation between the insured and thing insured such that there is benefit from the continued existence of the thing and suffers loss or damage from its destruction.
        
        In Marine Insurance - Can refer to multiple parties. Owner of the ship, owner of cargo, etc.
        
        Shipper or Consignee of Cargos - Has insurable interest over cargoes and the profits expected from them in the ordinary course. IC 107
        
        Mortgagee/Lender in Bottomry - Insurable interest over the vessel up to the amount secured by bottomry (IC 103)
        
        Owner of the Ship
        
        Ship/Vessel (IC 102) - Because owner
        
        Expected Freightage (IC 105) - Because under normal circumstances, owner of the ship gains profit from the freightage.
        
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        Liability of Insurer - Generally, If vessel is chartered the insurer is liable for only that part of the loss that the owner/insured cannot recover from the charterer (IC 102)
        
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        Charterer of the Ship - Insurable Interest only up to the extent that they will be damnfiied by the ship's loss. Or to the extent that they suffer due to loss.
        
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      - Perils of the Sea - those casualties due to the unusual violence or extraordinary action of wind and wave, or to other extraiordinary cuases connected with navigation.
        
        These arise from some overwhelming power which cannot be guarded against by the ordinary exertion of human skill or prudence.
        
        Perils of the Ship - Refers to losses resulting from:
        
        NOT COVERED - by marine insurance
        
        Natural and Inevitable Action of the Sea
        
        Ordinary wear and tear of the ship
        
        Negligent failure of the ship’s owner to provide proper equipment to convey the cargo under ordinary condition
        
        ANY DAMAGE attributable to the inherent vice of the vessel or to the acts of the owners, masters, shippers
        
        COVERED - Covered in general by marine insurance
    - - ALSO - damages or deterioration to vessel/cargo from the time it is loaded and the voyage commenced, until cargo is unloaded.
      - Simple/Particular Average - Damage/Expenses that have NOT inured to the common benefit and profit of all the persons interested in the vessel and the cargo.
        
        Who Bears Expense - the owner of the goods which gave rise to the expense or sufered the damage shall bear the simple average.
        
        Insurer - Liability of insurer subject to the terms of the policy (IC 138)
        
        General/Gross Average - All damage/expense deliberately caused by the master of the vessel or upon their authority in order to save the vessel/cargo from a real and known risk.
        
        Who Bears - all persons having an interest in the vessel/cargo at the time of the occurrence of the average shall contribute.
        
        Insurer - liable for his proportion of all general average loss assessed upon the thing insured subject to the following requisites:
        
        There must be a common danger to the vessel or cargo
        
        Part of the vessel or cargo was sacrificed deliberately
        
        Sacrifice must be for the common safety or for the benefit of all
        
        Must be made by the master or upon their authority
        
        Must not be caused by any fault of the party asking for the contribution
        
        Must be successful
        
        Must be necessary
        
        Ratio - Quasi-Contract is formed under Art. 859 of the Code of Commerce(Jarque v. Smith Bell)
  - - - Enumeration - (1) Vessels, goods, freights, cargoes exposed to the perils of navigation
        
        (2) Person or property in connection with marine insurance
        
        (3) Precious stones, jewelry, precious metals
        
        (4) Facilities for the control of waterways
      - Interpretation - risks covered subject to the construction of the language used to describe the subjects of insurance.
        
        Established Usage - Here, weight of interpretation tilts in favor of established usage of mercantile law. i.e. Goods and merchandise taken to mean as articles for mercantile purpose. Insurer is presumed to know this.