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Marine Insurance Act

R.S.O. 1990, CHAPTER M.2

Consolidation Period: From December 2, 1993 to the e-Laws currency date.

Last amendment: 1993, c. 27, Sched.

SKIP TABLE OF CONTENTS

CONTENTS

Interpretation

1.

Definitions

2.

Marine insurance defined

3.

Extended application

4.

Marine adventure subject of contract

Insurable Interest

5.

Wagering or gaming contracts void

6.

Insurable interest,

7.

When interest must attach

8.

Defeasible or contingent interests

9.

Partial interest

10.

Reinsurance

11.

Bottomry

12.

Master’s and seamen’s wages

13.

Advance freight

14.

Charges of insurance

15.

Interests of mortgagor, mortgagee, owner

16.

Assignment of interest

Insurable Value

17.

Measure of insurable value

Disclosure and Representations

18.

Contract based on utmost good faith

19.

Disclosure by assured

20.

Disclosure by agent effecting insurance

21.

Representations pending negotiation of contract,

22.

When contract is deemed to be concluded

The Policy

23.

Contract must be embodied in policy

24.

What policy must specify

25.

Signature of insurer

26.

Voyage and time policies

27.

Designation of subject-matter

28.

Valued policy or unvalued

29.

Unvalued policy

30.

Floating policy by ship or ships

31.

Policy form

32.

Premium to be arranged

Double Insurance

33.

Double insurance

Warranties, etc.

34.

Warranty, nature of

35.

When breach of warranty excused

36.

Express warranties, form

37.

Warranty of neutrality

38.

No implied warranty of nationality

39.

Warranty of good safety

40.

Warranty of seaworthiness of ship

41.

Goods or other movables

42.

Warranty of legality

The Voyage

43.

Implied condition as to commencement of risk

44.

Alteration of port of departure

45.

Sailing for different destination

46.

Change of voyage

47.

Deviation

48.

Several ports of discharge

49.

Delay in voyage

50.

Excuses for deviation or delay

Assignment of Policy

51.

Policy assignable

52.

Assured who has no interest cannot assign

Premium

53.

When premium payable

54.

Policy effected through broker

55.

Effect of receipt on policy

Loss and Abandonment

56.

Included and excluded losses

57.

Partial and total loss

58.

Actual total loss

59.

Missing ship

60.

Effect of transshipment, etc.

61.

Constructive total loss defined

62.

Effect of constructive total loss

63.

Notice of abandonment

64.

Effect of abandonment

Partial Losses (Including Salvage and General Average and Particular Charges)

65.

Particular average loss

66.

Salvage charges, recoverable

67.

General average loss

Measure of Indemnity

68.

Extent of liability of insurer for loss

69.

Total loss

70.

Partial loss of ship

71.

Partial loss of freight

72.

Partial loss of goods, merchandise, etc.

73.

Apportionment of valuation

74.

General average contributions and salvage charges

75.

Liabilities to third parties

76.

General provisions as to measure of indemnity

77.

Particular average warranties

78.

Successive losses

79.

Suing and labouring clause

Rights of Insurer on Payment

80.

Right of subrogation

81.

Right of contribution

82.

Effect of under-insurance

Return of Premium

83.

Enforcement of return

84.

Return by agreement

85.

Return for failure of consideration

Mutual Insurance

86.

Modification of Act in case of mutual insurance

Supplemental

87.

Ratification by assured

88.

Implied obligations varied by agreement or usage

89.

Reasonable time, etc., a question of fact

90.

Rules of common law saved

SCHEDULE

Interpretation

Definitions

1.  In this Act, unless the context otherwise requires,

“freight” includes the profit derivable by a ship-owner from the employment of the owner’s ship to carry the owner’s goods or movables, as well as freight payable by a third party, but does not include passage-money; (“fret”)

“movables” means any movable tangible property, other than the ship, and includes money, valuable securities and other documents; (“meubles”)

“policy” means a marine policy. (“police”) R.S.O. 1990, c. M.2, s. 1.

Marine insurance defined

2.  A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure. R.S.O. 1990, c. M.2, s. 2.

Extended application

Mixed sea, land and air risks

3.  (1)  A contract of marine insurance may, by its express terms or usage of the trade, be written so as to protect the assured against losses on inland waters, or may be extended so as to protect the assured against losses on any land or air risk that may be incidental to any sea or inland water voyage. R.S.O. 1990, c. M.2, s. 3 (1).

Where Act applies

(2)  Where a ship in course of building, or the launch of a ship, or any adventure analogous to a marine adventure, is covered by a policy in the form of a marine policy, this Act, in so far as applicable, applies thereto; but, except as provided by this section, nothing in this Act alters or affects any rule of law applicable to any contract of insurance other than a contract of marine insurance as defined by this Act. R.S.O. 1990, c. M.2, s. 3 (2).

Marine adventure subject of contract

4.  (1)  Subject to this Act, every lawful marine adventure may be the subject of a contract of marine insurance. R.S.O. 1990, c. M.2, s. 4 (1).

Marine adventures defined

(2)  In particular there is a marine adventure where,

(a) any ship, goods, or other movables are exposed to maritime perils and such property is in this Act referred to as “insurable property”;

(b) the earning or acquisition of any freight, passage-money, commission, profit, or other pecuniary benefit, or the security for any advances, loan, or disbursements, is endangered by the exposure of insurable property to maritime perils;

(c) any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property by reason of maritime perils. R.S.O. 1990, c. M.2, s. 4 (2).

Maritime perils defined

(3)  “Maritime perils” means the perils consequent on or incidental to the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind or which may be designated by the policy. R.S.O. 1990, c. M.2, s. 4 (3).

Insurable Interest

Wagering or gaming contracts void

5.  (1)  Every contract of marine insurance by way of gaming or wagering is void. R.S.O. 1990, c. M.2, s. 5 (1).

What contracts of marine insurance deemed void

(2)  A contract of marine insurance is deemed to be a gaming or wagering contract,

(a) where the assured has not an insurable interest as defined by this Act, and the contract is entered into with no expectation of acquiring such an interest; or

(b) where the policy is made “interest or no interest” or “without further proof of interest than the policy itself”, or “without benefit of salvage to the insurer”, or subject to any other like term,

provided that where there is no possibility of salvage, a policy may be effected without benefit of salvage to the insurer. R.S.O. 1990, c. M.2, s. 5 (2).

Insurable interest,

6.  (1)  Subject to this Act, every person has an insurable interest who is interested in a marine adventure. R.S.O. 1990, c. M.2, s. 6 (1).

defined

(2)  In particular a person is interested in a marine adventure where the person stands in any legal or equitable relation to the adventure or to any insurable property at risk therein, in consequence of which the person may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss or by damage thereto or by the detention thereof, or may incur liability in respect thereof. R.S.O. 1990, c. M.2, s. 6 (2).

When interest must attach

7.  (1)  The assured must be interested in the subject-matter insured at the time of the loss though the assured need not be interested when the insurance is effected; provided that, where the subject-matter is insured “lost or not lost”, the assured may recover although the assured may not have acquired the interest until after the loss, unless at the time of effecting the contract of insurance the assured was aware of the loss and the insurer was not. R.S.O. 1990, c. M.2, s. 7 (1).

Where no interest

(2)  An assured who has no interest at the time of the loss cannot acquire interest by any act or election after becoming aware of the loss. R.S.O. 1990, c. M.2, s. 7 (2).

Defeasible or contingent interests

8.  (1)  A defeasible interest and a contingent interest are insurable. R.S.O. 1990, c. M.2, s. 8 (1).

Buyer of goods

(2)  In particular, where the buyer of goods has insured them, the buyer has an insurable interest, although the buyer might have elected to reject the goods, or have treated them as at the seller’s risk, by reason of the latter’s delay in making delivery or otherwise. R.S.O. 1990, c. M.2, s. 8 (2).

Partial interest

9.  A partial interest of any nature is insurable. R.S.O. 1990, c. M.2, s. 9.

Reinsurance

10.  (1)  The insurer under a contract of marine insurance has an insurable interest in the insurer’s risk and may reinsure in respect of it. R.S.O. 1990, c. M.2, s. 10 (1).

Interest of original assured

(2)  Unless the policy otherwise provides, the original assured has no right or interest in respect of such reinsurance. R.S.O. 1990, c. M.2, s. 10 (2).

Bottomry

11.  The lender of money on bottomry or respondentia has an insurable interest in respect of the loan. R.S.O. 1990, c. M.2, s. 11.

Master’s and seamen’s wages

12.  The master or any member of the crew of a ship has an insurable interest in respect of his or her wages. R.S.O. 1990, c. M.2, s. 12.

Advance freight

13.  In the case of advance freight, the person advancing the freight has an insurable interest, in so far as such freight is not repayable in case of loss. R.S.O. 1990, c. M.2, s. 13.

Charges of insurance

14.  The assured has an insurable interest in the charges of any insurance that the assured may effect. R.S.O. 1990, c. M.2, s. 14.

Interests of mortgagor, mortgagee, owner

Quantum of interest, mortgagor

15.  (1)  Where the subject-matter insured is mortgaged, the mortgagor has an insurable interest in the full value thereof, and the mortgagee has an insurable interest in respect of any sum due or to become due under the mortgage. R.S.O. 1990, c. M.2, s. 15 (1).

Mortgagee, consignee

(2)  A mortgagee, consignee, or other person having an interest in the subject-matter insured may insure on behalf and for the benefit of any interested person. R.S.O. 1990, c. M.2, s. 15 (2).

Owner

(3)  The owner of insurable property has an insurable interest in respect of the full value thereof, although some third person may have agreed, or be liable, to indemnify the owner in case of loss. R.S.O. 1990, c. M.2, s. 15 (3).

Assignment of interest

16.  An assured who assigns or otherwise parts with an interest in the subject-matter insured does not thereby transfer to the assignee the assured’s rights under the contract of insurance, unless there is an express or implied agreement with the assignee to that effect; but the provisions of this section do not affect a transmission of interest by operation of law. R.S.O. 1990, c. M.2, s. 16.

Insurable Value

Measure of insurable value

17.  Subject to any express provision or valuation in the policy, the insurable value of the subject-matter insured must be ascertained as follows:

1. In insurance on ship, the insurable value is the value, at the commencement of the risk, of the ship, including its outfit, provisions and stores for the officers and crew, money advanced for crew’s wages, and other disbursements, if any, incurred to make the ship fit for the voyage or adventure contemplated by the policy, plus the charges of insurance upon the whole, and the insurable value, in the case of a steamship, includes also the machinery, boilers, and coals, oils, and engine stores if owned by the assured, and, in the case of a ship engaged in a special trade, the ordinary fittings requisite for that trade.

2. In insurance on freight, whether paid in advance or otherwise, the insurable value is the gross amount of the freight at the risk of the assured, plus the charges of insurance.

3. In insurance on goods or merchandise, the insurable value is the prime cost of the property insured, plus the expenses of and incidental to shipping and the charges of insurance upon the whole.

4. In insurance on any other subject-matter, the insurable value is the amount at the risk of the assured when the policy attaches plus the charges of insurance. R.S.O. 1990, c. M.2, s. 17.

Disclosure and Representations

Contract based on utmost good faith

18.  A contract of marine insurance is a contract based upon the utmost good faith, and if the utmost good faith is not observed by either party the contract may be avoided by the other party. R.S.O. 1990, c. M.2, s. 18.

Disclosure by assured

19.  (1)  Subject to this section, the assured must disclose to the insurer before the contract is concluded every material circumstance that is known to the assured, and the assured is deemed to know every circumstance that in the ordinary course of business the assured ought to know and if the assured fails to make such disclosure the insurer may avoid the contract. R.S.O. 1990, c. M.2, s. 19 (1).

Material circumstances

(2)  Every circumstance is material that would influence the judgment of a prudent insurer in fixing the premium or determining whether to take the risk. R.S.O. 1990, c. M.2, s. 19 (2).

Circumstances not disclosed

(3)  In the absence of inquiry the following circumstances need not be disclosed,

(a) any circumstance that diminishes the risk;

(b) any circumstance that is known or presumed to be known to the insurer and the insurer is presumed to know matters of common notoriety or knowledge and matters that an insurer in the ordinary course of business, as such, ought to know;

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

(d) any circumstance that it is superfluous to disclose by reason of any express or implied warranty. R.S.O. 1990, c. M.2, s. 19 (3).

Disclosure question of fact

(4)  Whether any particular circumstance that is not disclosed be material or not is in each case a question of fact. R.S.O. 1990, c. M.2, s. 19 (4).

Circumstance defined

(5)  The term “circumstance” includes any communication made to or information received by the assured. R.S.O. 1990, c. M.2, s. 19 (5).

Disclosure by agent effecting insurance

20.  Subject to the provisions of section 19 as to circumstances that need not be disclosed, where an insurance is effected for the assured by an agent, the agent must disclose to the insurer,

(a) every material circumstance that the agent knows, and an agent to insure 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

(b) every material circumstance that the assured is bound to disclose, unless it comes to the assured’s knowledge too late to communicate it to the agent. R.S.O. 1990, c. M.2, s. 20.

Representations pending negotiation of contract,

21.  (1)  Every material representation made by the assured or agent of the assured to the insurer during the negotiations for the contract, and before the contract is concluded, must be true and if it be untrue the insurer may avoid the contract. R.S.O. 1990, c. M.2, s. 21 (1).

material

(2)  A representation is material that would influence the judgment of a prudent insurer in fixing the premium or determining whether to take the risk. R.S.O. 1990, c. M.2, s. 21 (2).

Fact, expectation or belief

(3)  A representation may be either a representation as to a matter of fact or as to a matter of expectation or belief. R.S.O. 1990, c. M.2, s. 21 (3).

fact

(4)  A representation as to a matter of fact is true if it is substantially correct, that is to say, if the difference between what is represented and what is actually correct would not be considered material by a prudent insurer. R.S.O. 1990, c. M.2, s. 21 (4).

expectation or belief

(5)  A representation as to a matter of expectation or belief is true if it is made in good faith. R.S.O. 1990, c. M.2, s. 21 (5).

withdrawal

(6)  A representation may be withdrawn or corrected before the contract is concluded. R.S.O. 1990, c. M.2, s. 21 (6).

determination question of fact

(7)  Whether a particular representation be material or not is in each case a question of fact. R.S.O. 1990, c. M.2, s. 21 (7).

When contract is deemed to be concluded

22.  A contract of marine insurance is deemed to be concluded when the proposal of the assured is accepted by the insurer, whether the policy is then issued or not, and for the purpose of showing when the proposal was accepted, reference may be made to the slip or covering note or other customary memorandum of the contract. R.S.O. 1990, c. M.2, s. 22.

The Policy

Contract must be embodied in policy

23.  A contract of marine insurance is inadmissible in evidence unless it is embodied in a marine policy in accordance with this Act and the policy may be executed and issued either at the time when the contract is concluded or afterwards. R.S.O. 1990, c. M.2, s. 23.

What policy must specify

24.  A marine policy must specify,

(a) the name of the assured or of some person who effects the insurance on behalf of the assured;

(b) the subject-matter insured and the risk insured against;

(c) the voyage or period of time, or both, as the case may be, covered by the insurance;

(d) the sum or sums insured; and

(e) the name or names of the insurers. R.S.O. 1990, c. M.2, s. 24.

Signature of insurer

25.  (1)  A marine policy must be signed by or on behalf of the insurer; provided that in the case of a corporation the corporate seal may be sufficient, but nothing in this section shall be construed as requiring the subscription of a corporation to be under seal. R.S.O. 1990, c. M.2, s. 25 (1).

Subscription by two or more insurers

(2)  Where a 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 assured. R.S.O. 1990, c. M.2, s. 25 (2).

Voyage and time policies

26.  Where the contract is to insure the subject-matter at and from, or from one place to another or others, the policy is called a “voyage policy”, and where the contract is to insure the subject-matter for a definite period of time the policy is called a “time policy” and a contract for both voyage and time may be included in the same policy. R.S.O. 1990, c. M.2, s. 26.

Designation of subject-matter

27.  (1)  The subject-matter insured must be designated in a marine policy with reasonable certainty. R.S.O. 1990, c. M.2, s. 27 (1).

Nature and extent of interest

(2)  The nature and extent of the interest of the assured in the subject-matter insured need not be specified in the policy. R.S.O. 1990, c. M.2, s. 27 (2).

Designation in general terms

(3)  Where the policy designates the subject-matter insured in general terms, it shall be construed to apply to the interest intended by the assured to be covered. R.S.O. 1990, c. M.2, s. 27 (3).

Usage

(4)  In the application of this section regard shall be had to any usage regulating the designation of the subject-matter insured. R.S.O. 1990, c. M.2, s. 27 (4).

Valued policy or unvalued

28.  (1)  A policy may be either valued or unvalued. R.S.O. 1990, c. M.2, s. 28 (1).

Valued policy

(2)  A valued policy is a policy that specifies the agreed value of the subject-matter insured. R.S.O. 1990, c. M.2, s. 28 (2).

Value fixed

(3)  Subject to this Act, and in the absence of fraud, the value fixed by the policy is, as between the insurer and assured, conclusive of the insurable value of the subject intended to be insured, whether the loss is total or partial. R.S.O. 1990, c. M.2, s. 28 (3).

Idem

(4)  Unless the policy otherwise provides, the value fixed by the policy is not conclusive for the purpose of determining whether there has been a constructive total loss. R.S.O. 1990, c. M.2, s. 28 (4).

Unvalued policy

29.  An unvalued policy is a policy that does not specify the value of the subject-matter insured, but, subject to the limit of the sum insured, leaves the insurable value to be subsequently ascertained in the manner hereinbefore specified. R.S.O. 1990, c. M.2, s. 29.

Floating policy by ship or ships

30.  (1)  A floating policy is a policy that describes the insurance in general terms and leaves the name of the ship or ships and other particulars to be defined by subsequent declaration. R.S.O. 1990, c. M.2, s. 30 (1).

Declaration

(2)  The subsequent declaration or declarations may be made by endorsement on the policy or in other customary manner. R.S.O. 1990, c. M.2, s. 30 (2).

Idem

(3)  Unless the policy otherwise provides, the declarations must be made in the order of dispatch or shipment and they must, in the case of goods, comprise all consignments within the terms of the policy, and the value of the goods or other property must be honestly stated, but an omission or erroneous declaration may be rectified even after loss or arrival, provided the omission or declaration was made in good faith. R.S.O. 1990, c. M.2, s. 30 (3).

Idem

(4)  Unless the policy otherwise provides, where a declaration of value is not made until after notice of loss or arrival, the policy must be treated as an unvalued policy as regards the subject-matter of that declaration. R.S.O. 1990, c. M.2, s. 30 (4).

Policy form

31.  (1)  A policy may be in the form in the Schedule. R.S.O. 1990, c. M.2, s. 31 (1).

Construction of terms in Schedule

(2)  Subject to this Act, and unless the context of the policy otherwise requires, the terms and expressions mentioned in the Schedule shall be construed as having the scope and meaning in the Schedule assigned to them. R.S.O. 1990, c. M.2, s. 31 (2).

Premium to be arranged

32.  (1)  Where an insurance is effected at a premium to be arranged, and no arrangement is made, a reasonable premium is payable. R.S.O. 1990, c. M.2, s. 32 (1).

Additional premium

(2)  Where an insurance is effected on the terms that an additional premium is to be arranged in a given event, and that event happens but no arrangement is made, then a reasonable additional premium is payable. R.S.O. 1990, c. M.2, s. 32 (2).

Double Insurance

Double insurance

33.  (1)  Where two or more policies are effected by or on behalf of the assured on the same adventure and interest or any part thereof, and the sums insured exceed the indemnity allowed by this Act, the assured is said to be over-insured by double insurance. R.S.O. 1990, c. M.2, s. 33 (1).

Double insurance where over-insured

(2)  Where the assured is over-insured by double insurance,

(a) the assured, unless the policy otherwise provides, may claim payment from the insurers in such order as the assured may think fit, provided that the assured is not entitled to receive any sum in excess of the indemnity allowed by this Act;

(b) where the policy under which the assured claims is a valued policy, the assured must give credit as against the valuation for any sum the assured received under any other policy without regard to the actual value of the subject-matter insured;

(c) where the policy under which the assured claims is an unvalued policy, the assured must give credit, as against the full insurable value, for any sum received by the assured under any other policy;

(d) where the assured receives any sum in excess of the indemnity allowed by this Act, the assured is deemed to hold such sum in trust for the insurers, according to their right of contribution among themselves. R.S.O. 1990, c. M.2, s. 33 (2).

Warranties, etc.

Warranty, nature of

34.  (1)  A warranty, in the following sections relating to warranties, means a promissory warranty, that is to say, a warranty by which the assured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby the assured affirms or negatives the existence of a particular state of facts. R.S.O. 1990, c. M.2, s. 34 (1).

express or implied

(2)  A warranty may be express or implied. R.S.O. 1990, c. M.2, s. 34 (2).

compliance with

(3)  A warranty as defined in subsection (1) is a condition that must be exactly complied with, whether it be material to the risk or not and if it is not so 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 the insurer before that date. R.S.O. 1990, c. M.2, s. 34 (3).

When breach of warranty excused

35.  (1)  Non-compliance with a warranty is excused when, by reason of a change of circumstances, the warranty ceases to be applicable to the circumstances of the contract, or when compliance with the warranty is rendered unlawful by any subsequent law. R.S.O. 1990, c. M.2, s. 35 (1).

Where warranty broken

(2)  Where a warranty is broken, the defence that the breach has been remedied and the warranty complied with before loss is not available to the assured. R.S.O. 1990, c. M.2, s. 35 (2).

Breach waived

(3)  A breach of warranty may be waived by the insurer. R.S.O. 1990, c. M.2, s. 35 (3).

Express warranties, form

36.  (1)  An express warranty may be in any form of words from which the intention to warrant is to be inferred. R.S.O. 1990, c. M.2, s. 36 (1).

in policy

(2)  An express warranty must be included in or written upon the policy or must be contained in some document incorporated by reference into the policy. R.S.O. 1990, c. M.2, s. 36 (2).

implied warranty not excluded

(3)  An express warranty does not exclude an implied warranty unless it is inconsistent therewith. R.S.O. 1990, c. M.2, s. 36 (3).

Warranty of neutrality

37.  (1)  Where insurable property, whether ship or goods, is expressly warranted “neutral”, there is an implied condition that the property shall have a neutral character at the commencement of the risk, and that, so far as the assured can control the matter, its neutral character shall be preserved during the risk. R.S.O. 1990, c. M.2, s. 37 (1).

Idem

(2)  Where a ship is expressly warranted “neutral”, there is also an implied condition that, so far as the assured can control the matter, it shall be properly documented, that is to say, that it shall carry the necessary papers to establish its neutrality, and that it shall not falsify or suppress its papers or use simulated papers and if any loss occurs through breach of this condition, the insurer may avoid the contract. R.S.O. 1990, c. M.2, s. 37 (2).

No implied warranty of nationality

38.  There is no implied warranty as to the nationality of a ship, or that its nationality shall not be changed during the risk. R.S.O. 1990, c. M.2, s. 38.

Warranty of good safety

39.  Where the subject-matter insured is warranted “well” or “in good safety” on a particular day, it is sufficient if it is safe at any time during the day. R.S.O. 1990, c. M.2, s. 39.

Warranty of seaworthiness of ship

40.  (1)  In the voyage policy there is an implied warranty that at the commencement of the voyage the ship shall be seaworthy for the purpose of the particular adventure insured. R.S.O. 1990, c. M.2, s. 40 (1).

Implied warranty

(2)  Where the policy attaches while the ship is in port, there is also an implied warranty that it shall at the commencement of the risk be reasonably fit to encounter the ordinary perils of the port. R.S.O. 1990, c. M.2, s. 40 (2).

Idem

(3)  Where the policy relates to a voyage that is performed in different stages during which the ship requires different kinds of or further preparation or equipment, there is an implied warranty that at the commencement of each stage the ship is seaworthy in respect of such preparation or equipment for the purposes of that stage. R.S.O. 1990, c. M.2, s. 40 (3).

When ship seaworthy

(4)  A ship is deemed to be seaworthy when it is reasonably fit in all respects to encounter the ordinary perils of the seas of the adventure insured. R.S.O. 1990, c. M.2, s. 40 (4).

No implied warranty in time policy

(5)  In a time policy there is no implied warranty that the ship shall be seaworthy at any stage of the adventure but where, with the privity of the assured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness. R.S.O. 1990, c. M.2, s. 40 (5).

Goods or other movables

41.  (1)  In a policy on goods or other movables there is no implied warranty that the goods or movables are seaworthy. R.S.O. 1990, c. M.2, s. 41 (1).

Voyage policy on goods

(2)  In a voyage policy on goods or other movables there is an implied warranty that at the commencement of the voyage the ship is not only seaworthy as a ship but also that it is reasonably fit to carry the goods or other movables to the destination contemplated by the policy. R.S.O. 1990, c. M.2, s. 41 (2).

Warranty of legality

42.  There is an implied warranty that the adventure insured is a lawful one, and that, so far as the assured can control the matter, the adventure shall be carried out in a lawful manner. R.S.O. 1990, c. M.2, s. 42.

The Voyage

Implied condition as to commencement of risk

43.  (1)  Where the subject-matter is insured by a voyage policy “at and from” or “from” a particular place, it is not necessary that the ship should be at that place when the contract is concluded, but there is an implied condition that the adventure shall be commenced within a reasonable time and that if the adventure is not so commenced the insurer may avoid the contract. R.S.O. 1990, c. M.2, s. 43 (1).

When condition may be negatived

(2)  The implied condition may be negatived by showing that the delay was caused by circumstances known to the insurer before the contract was concluded or by showing that the insurer waived the condition. R.S.O. 1990, c. M.2, s. 43 (2).

Alteration of port of departure

44.  Where the place of departure is specified by the policy and the ship, instead of sailing from that place, sails from any other place, the risk does not attach. R.S.O. 1990, c. M.2, s. 44.

Sailing for different destination

45.  Where the destination is specified in the policy and the ship, instead of sailing for that destination, sails for any other destination, the risk does not attach. R.S.O. 1990, c. M.2, s. 45.

Change of voyage

46.  (1)  Where, after the commencement of the risk, the destination of the ship is voluntarily changed from the destination contemplated by the policy, there is said to be a change of voyage. R.S.O. 1990, c. M.2, s. 46 (1).

Insurer discharged from time of change

(2)  Unless the policy otherwise provides, where there is a change of voyage, the insurer is discharged from liability as from the time of change, that is to say, as from the time when the determination to change it is manifested; and it is immaterial that the ship may not in fact have left the course of voyage contemplated by the policy when the loss occurs. R.S.O. 1990, c. M.2, s. 46 (2).

Deviation

47.  (1)  Where a ship, without lawful excuse, deviates from the voyage contemplated by the policy, the insurer is discharged from liability as from the time of deviation and it is immaterial that the ship may have regained its route before any loss occurs. R.S.O. 1990, c. M.2, s. 47 (1).

Idem

(2)  There is a deviation from the voyage contemplated by the policy,

(a) where the course of the voyage is specially designated by the policy and that course is departed from; or

(b) where the course of the voyage is not specifically designated by the policy but the usual and customary course is departed from. R.S.O. 1990, c. M.2, s. 47 (2).

Intention immaterial

(3)  The intention to deviate is immaterial and there must be a deviation in fact to discharge the insurer from liability under the contract. R.S.O. 1990, c. M.2, s. 47 (3).

Several ports of discharge

48.  (1)  Where several ports of discharge are specified by the policy, the ship may proceed to all or any of them, but, in the absence of any usage or sufficient cause to the contrary, it must proceed to them, or such of them as it goes to, in the order designated by the policy, and if it does not there is a deviation. R.S.O. 1990, c. M.2, s. 48 (1).

Idem

(2)  Where the policy is to “ports of discharge”, within a given area, which are not named, the ship must, in the absence of any usage or sufficient cause to the contrary, proceed to them, or such of them as it goes to, in their geographical order, and if it does not there is a deviation. R.S.O. 1990, c. M.2, s. 48 (2).

Delay in voyage

49.  In the case of a voyage policy, the adventure insured must be prosecuted throughout its course with reasonable dispatch, and, if without lawful excuse it is not so prosecuted, the insurer is discharged from liability as from the time when the delay became unreasonable. R.S.O. 1990, c. M.2, s. 49.

Excuses for deviation or delay

50.  (1)  Deviation or delay in prosecuting the voyage contemplated by the policy is excused,

(a) where authorized by any special term in the policy; or

(b) where caused by circumstances beyond the control of the master and his or her employer; or

(c) where reasonably necessary in order to comply with an express or implied warranty; or

(d) where reasonably necessary for the safety of the ship or subject-matter insured; or

(e) for the purpose of saving human life or aiding a ship in distress where human life may be in danger; or

(f) where reasonably necessary for the purpose of obtaining medical or surgical aid for any person on board the ship; or

(g) where caused by the barratrous conduct of the master or crew, if barratry is one of the perils insured against. R.S.O. 1990, c. M.2, s. 50 (1).

Ship to resume course when cause ceases

(2)  When the cause excusing the deviation or delay ceases to operate, the ship must resume its course and prosecute its voyage with reasonable dispatch. R.S.O. 1990, c. M.2, s. 50 (2).

Assignment of Policy

Policy assignable

51.  (1)  A marine policy is assignable unless it contains terms expressly prohibiting assignment and it may be assigned either before or after loss. R.S.O. 1990, c. M.2, s. 51 (1).

Effect of assignment

(2)  Where a marine policy has been assigned so as to pass the beneficial interest in such policy, the assignee of the policy is entitled to sue thereon in the assignee’s own name, and the defendant is entitled to make any defence arising out of the contract that the defendant would have been entitled to make if the action had been brought in the name of the person by or on behalf of whom the policy was effected. R.S.O. 1990, c. M.2, s. 51 (2).

How assignable

(3)  A marine policy may be assigned by endorsement thereon or in other customary manner. R.S.O. 1990, c. M.2, s. 51 (3).

Assured who has no interest cannot assign

52.  Where the assured has parted with or lost an interest in the subject-matter insured, and has not, before or at the time of so doing, expressly or impliedly agreed to assign the policy, any subsequent assignment of the policy is inoperative; provided that nothing in this section affects the assignment of a policy after loss. R.S.O. 1990, c. M.2, s. 52.

Premium

When premium payable

53.  Unless otherwise agreed, the duty of the assured or the assured’s agent to pay the premium and the duty of the insurer to issue the policy to the assured or the agent are concurrent conditions, and the insurer is not bound to issue the policy until payment or tender of the premium. R.S.O. 1990, c. M.2, s. 53.

Policy effected through broker

54.  (1)  Unless otherwise agreed, where a marine policy is effected on behalf of the assured by a broker, the broker is directly responsible to the insurer for the premium and the insurer is directly responsible to the assured for the amount that may be payable in respect of losses or in respect of returnable premium. R.S.O. 1990, c. M.2, s. 54 (1).

Lien on policy

(2)  Unless otherwise agreed, the broker has, as against the assured, a lien upon the policy for the amount of the premium and the broker’s charges in respect of effecting the policy, and a broker who has dealt with the person who employs the broker as a principal has also a lien on the policy in respect of any balance on any insurance account that may be due to the broker from such person, unless when the debt was incurred the broker had reason to believe that such person was only an agent. R.S.O. 1990, c. M.2, s. 54 (2).

Effect of receipt on policy

55.  Where a marine policy effected on behalf of the assured by a broker acknowledges the receipt of the premium, such acknowledgment is, in the absence of fraud, conclusive as between the insurer and the assured, but not as between the insurer and broker. R.S.O. 1990, c. M.2, s. 55.

Loss and Abandonment

Included and excluded losses

56.  (1)  Subject to this Act and unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, but, subject as aforesaid, the insurer is not liable for any loss that is not proximately caused by a peril insured against. R.S.O. 1990, c. M.2, s. 56 (1).

Idem

(2)  In particular,

(a) the insurer is not liable for any loss attributable to the wilful misconduct of the assured, but, unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew;

(b) unless the policy otherwise provides, the insurer on ship or goods is not liable for any loss proximately caused by delay, although the delay is caused by a peril insured against;

(c) unless the policy otherwise provides, the insurer is not liable for ordinary wear and tear, ordinary leakage and breakage, inherent vice or nature of the subject-matter insured, or for any loss proximately caused by rats or vermin, or for any injury to machinery not proximately caused by maritime perils. R.S.O. 1990, c. M.2, s. 56 (2).

Partial and total loss

57.  (1)  A loss may be either total or partial and any loss, other than a total loss as hereinafter defined is a partial loss. R.S.O. 1990, c. M.2, s. 57 (1).

Total loss

(2)  A total loss may be either an actual total loss or a constructive total loss. R.S.O. 1990, c. M.2, s. 57 (2).

Idem

(3)  Unless a different intention appears from the terms of the policy, an insurance against total loss includes a constructive as well as an actual total loss. R.S.O. 1990, c. M.2, s. 57 (3).

Recovery of partial loss

(4)  Where the assured brings an action for a total loss and the evidence proves only a partial loss, the assured may, unless the policy otherwise provides, recover for a partial loss. R.S.O. 1990, c. M.2, s. 57 (4).

Where goods incapable of identification

(5)  Where goods reach their destination in specie, but by reason of obliteration of marks, or otherwise, they are incapable of identification, the loss, if any, is partial and not total. R.S.O. 1990, c. M.2, s. 57 (5).

Actual total loss

58.  (1)  Where the subject-matter insured is destroyed or so damaged as to cease to be a thing of the kind insured, or where the assured is irretrievably deprived thereof, there is an actual total loss. R.S.O. 1990, c. M.2, s. 58 (1).

Notice of abandonment

(2)  In the case of an actual total loss no notice of abandonment need be given. R.S.O. 1990, c. M.2, s. 58 (2).

Missing ship

59.  Where the ship concerned in the adventure is missing and after the lapse of a reasonable time no news of it has been received, an actual total loss may be presumed. R.S.O. 1990, c. M.2, s. 59.

Effect of transshipment, etc.

60.  Where, by a peril insured against, the voyage is interrupted at an intermediate port or place under such circumstances as, apart from any special stipulation in the contract of affreightment, to justify the master in landing and reshipping the goods or other movables, or in transshipping them, and sending them on to their destination, the liability of the insurer continues despite the landing or transshipment. R.S.O. 1990, c. M.2, s. 60.

Constructive total loss defined

61.  (1)  Subject to any express provision in the policy, there is a constructive total loss where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable or because it could not be preserved from actual total loss without an expenditure that would exceed its value when the expenditure had been incurred. R.S.O. 1990, c. M.2, s. 61 (1).

Idem

(2)  In particular, there is a constructive total loss,

(a) where the assured is deprived of the possession of a ship or goods by a peril insured against, and

(i) it is unlikely that the assured can recover the ship or goods, as the case may be, or

(ii) the cost of recovering the ship or goods, as the case may be, would exceed their value when recovered; or

(b) in the case of damage to a ship, where it is so damaged by a peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired, and in estimating the cost of repairs, no deduction is to be made in respect of general average contributions to those repairs payable by other interests, but account is to be taken of the expense of future salvage operations and of any future general average contributions to which the ship would be liable if repaired; or

(c) in the case of damage to goods, where the cost of repairing the damage and forwarding the goods to their destination would exceed their value on arrival. R.S.O. 1990, c. M.2, s. 61 (2).

Effect of constructive total loss

62.  Where there is a constructive total loss, the assured may either treat the loss as a partial loss or abandon the subject-matter insured to the insurer and treat the loss as if it were an actual total loss. R.S.O. 1990, c. M.2, s. 62.

Notice of abandonment

63.  (1)  Subject to this section, an assured who elects to abandon the subject-matter insured to the insurer must give notice of abandonment and if the assured fails to do so the loss can only be treated as a partial loss. R.S.O. 1990, c. M.2, s. 63 (1).

How given

(2)  Notice of abandonment may be given in writing or by word of mouth, or partly in writing and partly by word of mouth, and may be given in any terms that indicate the intention of the assured to abandon the insured interest in the subject-matter insured unconditionally to the insurer. R.S.O. 1990, c. M.2, s. 63 (2).

Idem

(3)  Notice of abandonment must be given with reasonable diligence after the receipt of reliable information of the loss, but where the information is of a doubtful character, the assured is entitled to a reasonable time to make inquiry. R.S.O. 1990, c. M.2, s. 63 (3).

Refusal to accept

(4)  Where notice of abandonment is properly given, the rights of the assured are not prejudiced by the fact that the insurer refuses to accept the abandonment. R.S.O. 1990, c. M.2, s. 63 (4).

Acceptance

(5)  The acceptance of an abandonment may be either express or implied from the conduct of the insurer and the mere silence of the insurer after notice is not an acceptance. R.S.O. 1990, c. M.2, s. 63 (5).

Irrevocable

(6)  Where notice of abandonment is accepted, the abandonment is irrevocable and the acceptance of the notice conclusively admits liability for the loss and the sufficiency of the notice. R.S.O. 1990, c. M.2, s. 63 (6).

Where unnecessary

(7)  Notice of abandonment is unnecessary where, at the time when the assured receives information of the loss, there would be no possibility of benefit to the insurer if notice were given. R.S.O. 1990, c. M.2, s. 63 (7).

Waived

(8)  Notice of abandonment may be waived by the insurer. R.S.O. 1990, c. M.2, s. 63 (8).

Where risk reinsured

(9)  An insurer who has reinsured a risk need not give notice of abandonment. R.S.O. 1990, c. M.2, s. 63 (9).

Effect of abandonment

64.  (1)  Where there is a valid abandonment, the insurer is entitled to take over the interest of the assured in whatever may remain of the subject-matter insured and all proprietary rights incidental thereto. R.S.O. 1990, c. M.2, s. 64 (1).

Idem

(2)  Upon the abandonment of a ship, the insurer thereof is entitled to any freight in course of being earned and which is earned by the ship subsequent to the casualty causing the loss, less the expenses of earning it incurred after the casualty, and, where the ship is carrying the owner’s goods, the insurer is entitled to a reasonable remuneration for the carriage of them subsequent to the casualty causing the loss. R.S.O. 1990, c. M.2, s. 64 (2).

Partial Losses (Including Salvage and General Average and Particular Charges)

Particular average loss

65.  (1)  A particular average loss is a partial loss of the subject-matter insured, caused by a peril insured against, and which is not a general average loss. R.S.O. 1990, c. M.2, s. 65 (1).

Particular charges

(2)  Expenses incurred by or on behalf of the assured for the safety or preservation of the subject-matter insured, other than general average and salvage charges, are called particular charges and particular charges are not included in particular average. R.S.O. 1990, c. M.2, s. 65 (2).

Salvage charges, recoverable

66.  (1)  Subject to any express provision in the policy, salvage charges incurred in preventing a loss by perils insured against may be recovered as a loss by those perils. R.S.O. 1990, c. M.2, s. 66 (1).

defined

(2)  “Salvage charges” means the charges recoverable under maritime law by a salvor independently of contract but do not include the expenses of services in the nature of salvage rendered by the assured or the assured’s agents or any person employed for hire by them for the purpose of averting a peril insured against, and such expenses, where properly incurred, may be recovered as particular charges or as a general average loss according to the circumstances under which they were incurred. R.S.O. 1990, c. M.2, s. 66 (2).

General average loss

67.  (1)  A general average loss is a loss caused by or directly consequential on a general average act and includes a general average expenditure as well as a general average sacrifice. R.S.O. 1990, c. M.2, s. 67 (1).

General average act

(2)  There is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperilled in the common adventure. R.S.O. 1990, c. M.2, s. 67 (2).

General average contribution

(3)  Where there is a general average loss, the party on whom it falls is entitled, subject to the conditions imposed by maritime law, to a rateable contribution from the other parties interested, and such contribution is called a general average contribution. R.S.O. 1990, c. M.2, s. 67 (3).

General average expenditure, sacrifice

(4)  Subject to any express provision in the policy, where the assured has incurred a general average expenditure, the assured may recover from the insurer in respect of the proportion of the loss that falls upon the assured; and, in the case of a general average sacrifice, the assured may recover from the insurer in respect of the whole loss without having enforced the assured’s right of contribution from the other parties liable to contribute. R.S.O. 1990, c. M.2, s. 67 (4).

General average contribution, recovery

(5)  Subject to any express provision in the policy, where the assured has paid, or is liable to pay, a general average contribution in respect of the subject insured, the assured may recover therefor from the insurer. R.S.O. 1990, c. M.2, s. 67 (5).

Where insurer not liable for loss

(6)  In the absence of express stipulation, the insurer is not liable for any general average loss or contribution where the loss was not incurred for the purpose of avoiding, or in connection with the avoidance of, a peril insured against. R.S.O. 1990, c. M.2, s. 67 (6).

Where two interests owned by assured

(7)  Where ship, freight, and cargo, or any two of those interests, are owned by the same assured, the liability of the insurer in respect of general average losses or contributions is to be determined as if those subjects were owned by different persons. R.S.O. 1990, c. M.2, s. 67 (7).

Measure of Indemnity

Extent of liability of insurer for loss

68.  (1)  The sum that the assured can recover in respect of a loss on a policy of insurance, in the case of an unvalued policy to the full extent of the insurable value, or in the case of a valued policy to the full extent of the value fixed by the policy, is called the measure of indemnity. R.S.O. 1990, c. M.2, s. 68 (1).

Idem

(2)  Where there is a loss recoverable under the policy, the insurer, or each insurer if there is more than one, is liable for such proportion of the measure of indemnity as the amount of the insurer’s subscription bears to the value fixed by the policy in the case of a valued policy or to the insurable value in the case of an unvalued policy. R.S.O. 1990, c. M.2, s. 68 (2).

Total loss

69.  Subject to this Act and to any express provision in the policy, where there is a total loss of the subject-matter insured,

(a) if the policy is a valued policy, the measure of indemnity is the sum fixed by the policy;

(b) if the policy is an unvalued policy, the measure of indemnity is the insurable value of the subject-matter insured. R.S.O. 1990, c. M.2, s. 69.

Partial loss of ship

70.  Where a ship is damaged but is not totally lost, the measure of indemnity, subject to any express provision in the policy, is as follows:

1. Where the ship has been repaired, the assured is entitled to the reasonable cost of the repairs, less the customary deduction, but not exceeding the sum insured in respect of any one casualty.

2. Where the ship has been only partially repaired, the assured is entitled to the reasonable cost of such repairs, computed as above, and also to be indemnified for the reasonable depreciation, if any, arising from the unrepaired damage, provided that the aggregate amount shall not exceed the cost of repairing the whole damage, computed as above.

3. Where the ship has not been repaired and has not been sold in its damaged state during the risk, the assured is entitled to be indemnified for the reasonable depreciation arising from the unrepaired damage, but not exceeding the reasonable cost of repairing such damage, computed as above. R.S.O. 1990, c. M.2, s. 70.

Partial loss of freight

71.  Subject to any express provision in the policy, where there is a partial loss of freight, the measure of indemnity is such proportion of the sum fixed by the policy in the case of a valued policy, or of the insurable value in the case of an unvalued policy, as the proportion of freight lost by the assured bears to the whole freight at the risk of the assured under the policy. R.S.O. 1990, c. M.2, s. 71.

Partial loss of goods, merchandise, etc.

72.  Where there is a partial loss of goods, merchandise, or other movables, the measure of indemnity, subject to any express provision in the policy, is as follows:

1. Where part of the goods, merchandise, or other movables insured by a valued policy is totally lost, the measure of indemnity is such proportion of the sum fixed by the policy as the insurable value of the part lost bears to the insurable value of the whole, ascertained as in the case of an unvalued policy.

2. Where part of the goods, merchandise, or other movables insured by an unvalued policy is totally lost, the measure of indemnity is the insurable value of the part lost, ascertained as in case of total loss.

3. Where the whole or any part of the goods or merchandise insured has been delivered damaged at its destination, the measure of indemnity is such proportion of the sum fixed by the policy in the case of a valued policy, or of the insurable value in the case of an unvalued policy, as the difference between the gross sound and damaged values at the place of arrival bears to the gross sound value.

4. “Gross value” means the wholesale price or, if there is no such price, the estimated value, with, in either case, freight, landing charges, and duty paid beforehand; provided that, in the case of goods or merchandise customarily sold in bond, the bonded price is deemed to be the gross value.

5. “Gross proceeds” means the actual price obtained at a sale where all charges on sale are paid by the sellers. R.S.O. 1990, c. M.2, s. 72.

Apportionment of valuation

73.  (1)  Where different species of property are insured under a single valuation, the valuation must be apportioned over the different species in proportion to their respective insurable values, as in the case of an unvalued policy. The insured value of any part of a species in such proportion of the total insured value of the same as the insurable value of the part bears to the insurable value of the whole, ascertained in both cases as provided by this Act. R.S.O. 1990, c. M.2, s. 73 (1).

Idem

(2)  Where a valuation has to be apportioned and particulars of the prime cost of each separate species, quality, or description of goods cannot be ascertained, the division of the valuation may be made over the net arrived sound values of the different species, qualities, or descriptions of goods. R.S.O. 1990, c. M.2, s. 73 (2).

General average contributions and salvage charges

74.  (1)  Subject to any express provision in the policy, where the assured has paid, or is liable for, any general average contribution, the measure of indemnity is the full amount of such contribution, if the subject-matter liable to contribution is insured for its full contributory value; but, if such subject-matter is not insured for its full contributory value, or if only part of it is insured, the indemnity payable by the insurer must be reduced in proportion to the under-insurance, and where there has been a particular average loss that constitutes a deduction from the contributory value, and for which the insurer is liable, that amount must be deducted from the insured value in order to ascertain what the insurer is liable to contribute. R.S.O. 1990, c. M.2, s. 74 (1).

Extent of liability

(2)  Where the insurer is liable for salvage charges, the extent of the insurer’s liability must be determined on the like principle. R.S.O. 1990, c. M.2, s. 74 (2).

Liabilities to third parties

75.  Where the assured has effected an insurance in express terms against any liability to a third party, the measure of indemnity, subject to any express provision in the policy, is the amount paid or payable by the assured to such third party in respect of such liability. R.S.O. 1990, c. M.2, s. 75.

General provisions as to measure of indemnity

76.  (1)  Where there has been a loss in respect of any subject-matter not expressly provided for in the foregoing provisions of this Act, the measure of indemnity shall be ascertained, as nearly as may be, in accordance with those provisions, in so far as applicable to the particular case. R.S.O. 1990, c. M.2, s. 76 (1).

Idem

(2)  Nothing in this Act relating to the measure of indemnity affects the rules relating to double insurance, or prohibits the insurer from disproving interest wholly or in part, or from showing that at the time of the loss the whole or any part of the subject-matter insured was not at risk under the policy. R.S.O. 1990, c. M.2, s. 76 (2).

Particular average warranties

77.  (1)  Where the subject-matter insured is warranted free from particular average, the assured cannot recover for a loss of part, other than a loss incurred by a general average sacrifice, unless the contract contained in the policy is apportionable, but, if the contract is apportionable, the assured may recover for a total loss of any apportionable part. R.S.O. 1990, c. M.2, s. 77 (1).

Idem

(2)  Where the subject-matter insured is warranted free from particular average, either wholly or under a certain percentage, the insurer is nevertheless liable for salvage charges, and for particular charges and other expenses properly incurred pursuant to the provisions of the suing and labouring clause in order to avert a loss insured against. R.S.O. 1990, c. M.2, s. 77 (2).

Idem

(3)  Unless the policy otherwise provides, where the subject-matter insured is warranted free from particular average under a specified percentage, a general average loss cannot be added to a particular average loss to make up the specified percentage. R.S.O. 1990, c. M.2, s. 77 (3).

Determination of specified percentage

(4)  For the purpose of ascertaining whether the specified percentage has been reached regard shall be had only to the actual loss suffered by the subject-matter insured, and particular charges and the expenses of and incidental to ascertaining and proving the loss must be excluded. R.S.O. 1990, c. M.2, s. 77 (4).

Successive losses

78.  (1)  Unless the policy otherwise provides and subject to this Act, the insurer is liable for successive losses even though the total amount of such losses may exceed the sum insured. R.S.O. 1990, c. M.2, s. 78 (1).

Idem

(2)  Where, under the same policy, a partial loss that has not been repaired or otherwise made good is followed by a total loss, the assured can only recover in respect of the total loss. R.S.O. 1990, c. M.2, s. 78 (2).

Effect on liability under suing and labouring clause

(3)  Nothing in this section affects the liability of the insurer under the suing and labouring clause. R.S.O. 1990, c. M.2, s. 78 (3).

Suing and labouring clause

79.  (1)  Where the policy contains a suing and labouring clause, the engagement thereby entered into is deemed to be supplementary to the contract of insurance and the assured may recover from the insurer any expenses properly incurred pursuant to the clause, although the insurer may have paid for a total loss or that the subject-matter may have been warranted free from particular average, either wholly or under a certain percentage. R.S.O. 1990, c. M.2, s. 79 (1).

What not recoverable

(2)  General average losses and contributions and salvage charges as defined by this Act are not recoverable under the suing and labouring clause. R.S.O. 1990, c. M.2, s. 79 (2).

Idem

(3)  Expenses incurred for the purpose of averting or diminishing any loss not covered by the policy are not recoverable under the suing and labouring clause. R.S.O. 1990, c. M.2, s. 79 (3).

Duty to minimize loss

(4)  It is the duty of the assured and the agents of the assured in all cases to take such measures as may be reasonable for the purpose of averting or minimizing a loss. R.S.O. 1990, c. M.2, s. 79 (4); 1993, c. 27, Sched.

Rights of Insurer on Payment

Right of subrogation

80.  (1)  Where the insurer pays for a total loss, either of the whole or, in the case of goods, of any apportionable part of the subject-matter insured, the insurer thereupon becomes entitled to take over the interest of the assured in whatever may remain of the subject-matter so paid for, and the insurer is thereby subrogated to all the rights and remedies of the assured in and in respect of that subject-matter as from the time of the casualty causing the loss. R.S.O. 1990, c. M.2, s. 80 (1); 1993, c. 27, Sched.

Partial loss

(2)  Subject to the foregoing provisions, where the insurer pays for a partial loss, the insurer acquires no title to the subject-matter insured or such part of it as may remain, but the insurer is thereupon subrogated to all rights and remedies of the assured in and in respect of the subject-matter insured as from the time of the casualty causing the loss in so far as the assured has been indemnified according to this Act by such payment for the loss. R.S.O. 1990, c. M.2, s. 80 (2).

Right of contribution

81.  (1)  Where the assured is over-insured by double insurance, each insurer is bound to contribute rateably to the loss in proportion to the amount for which the insurer is liable under the contract. R.S.O. 1990, c. M.2, s. 81 (1).

Idem

(2)  Any insurer who pays more than that insurer’s proportion of the loss, is entitled to maintain an action for contribution against the other insurers, and is entitled to the like remedies as a surety who has paid more than the surety’s proportion of the debt. R.S.O. 1990, c. M.2, s. 81 (2).

Effect of under-insurance

82.  Where the assured is insured for an amount less than the insurable value or, in the case of a valued policy, for an amount less than the policy valuation, the assured is deemed to be the assured’s own insurer in respect of the uninsured balance. R.S.O. 1990, c. M.2, s. 82.

Return of Premium

Enforcement of return

83.  Where the premium, or a proportionate part thereof, is declared by this Act to be returnable,

(a) if already paid, it may be recovered by the assured from the insurer; and

(b) if unpaid, it may be retained by the assured or the agent of the assured. R.S.O. 1990, c. M.2, s. 83.

Return by agreement

84.  Where the policy contains a stipulation for the return of the premium, or a proportionate part thereof, on the happening of a certain event and that event happens, the premium, or, as the case may be, the proportionate part thereof, is thereupon returnable to the assured. R.S.O. 1990, c. M.2, s. 84.

Return for failure of consideration

85.  (1)  Where the consideration for the payment of the premium totally fails and there has been no fraud or illegality on the part of the assured or the agents of the assured, the premium is thereupon returnable to the assured. R.S.O. 1990, c. M.2, s. 85 (1).

Idem

(2)  Where the consideration for the payment of the premium is apportionable and there is a total failure of any apportionable part of the consideration, a proportionate part of the premium is, under the like conditions, thereupon returnable to the assured. R.S.O. 1990, c. M.2, s. 85 (2).

Idem

(3)  In particular,

(a) where the policy is void, or is avoided by the insurer as from the commencement of the risk, the premium is returnable, provided that there has been no fraud or illegality on the part of the assured; but if the risk is not apportionable, and has once attached, the premium is not returnable;

(b) where the subject-matter insured, or part thereof, has never been imperilled, the premium, or, as the case may be, a proportionate part thereof, is returnable; provided that where the subject-matter has been insured “lost or not lost” and has arrived in safety at the time when the contract is concluded, the premium is not returnable unless at such time the insurer knew of the safe arrival;

(c) where the assured has no insurable interest throughout the currency of the risk, the premium is returnable, provided that this rule does not apply to a policy effected by way of gaming or wagering;

(d) where the assured has a defeasible interest that is terminated during the currency of the risk, the premium is not returnable;

(e) where the assured has over-insured under an unvalued policy, a proportionate part of the premium is returnable;

(f) subject to the foregoing provisions, where the assured has over-insured by double insurance, a proportionate part of the several premiums is returnable; provided that, if the policies are effected at different times, and any earlier policy has at any time borne the entire risk, or if a claim has been paid on the policy in respect of the full sum insured thereby, no premium is returnable in respect of that policy, and when the double insurance is effected knowingly by the assured no premium is returnable. R.S.O. 1990, c. M.2, s. 85 (3).

Mutual Insurance

Modification of Act in case of mutual insurance

86.  (1)  Where two or more persons mutually agree to insure each other against marine losses there is said to be a mutual insurance. R.S.O. 1990, c. M.2, s. 86 (1).

Premium provisions not applicable

(2)  The provisions of this Act relating to the premium do not apply to mutual insurance, but a guarantee, or such other arrangement as may be agreed upon, may be substituted for the premium. R.S.O. 1990, c. M.2, s. 86 (2).

Modification of provisions of Act

(3)  The provisions of this Act, in so far as they may be modified by the agreement of the parties, may in the case of mutual insurance be modified by the terms of the policies issued by the association or by the rules and regulations of the association. R.S.O. 1990, c. M.2, s. 86 (3).

Application of Act

(4)  Subject to the exceptions mentioned in this section, this Act applies to a mutual insurance. R.S.O. 1990, c. M.2, s. 86 (4).

Supplemental

Ratification by assured

87.  Where a contract of marine insurance is in good faith effected by one person on behalf of another, the person on whose behalf it is effected may ratify the contract even after becoming aware of a loss. R.S.O. 1990, c. M.2, s. 87.

Implied obligations varied by agreement or usage

88.  (1)  Where any right, duty, or liability would arise under a contract of marine insurance by implication of law, it may be negatived or varied by express agreement, or by usage, if the usage is such as to bind both parties to the contract. R.S.O. 1990, c. M.2, s. 88 (1).

Idem

(2)  This section extends to any right, duty, or liability declared by this Act which may be lawfully modified by agreement. R.S.O. 1990, c. M.2, s. 88 (2).

Reasonable time, etc., a question of fact

89.  Where by this Act any reference is made to reasonable time, reasonable premium, or reasonable diligence, the question what is reasonable is a question of fact. R.S.O. 1990, c. M.2, s. 89.

Rules of common law saved

90.  The rules of the common law, including the law merchant, save in so far as they are inconsistent with the express provisions of this Act, continue to apply to contracts of marine insurance. R.S.O. 1990, c. M.2, s. 90.

SCHEDULE

(Section 31)

________

Form of Policy

Be it known that ............................... as well in ................................... own name as for and in the name and names of all and every other person or persons to whom the same doth, may, or shall appertain, in part or in all doth make assurance and cause .......................................... and them, and every of them, to be insured lost or not lost, at and from ......................................... upon any kind of goods and merchandises, and also upon the body, tackle, apparel, ordnance, munition, artillery, boat, and other furniture, of and in the good ship or vessel called the ............................................... whereof is master under God, for this present voyage, ..................... or whosoever else shall go for master in the said ship, or by whatsoever other name or names the said ship, or the master thereof, is or shall be named or called; beginning the adventure upon the said goods and merchandises from the loading thereof aboard the said ship, ................................ upon the said ship, etc., ................................ and so shall continue and endure, during its abode there, upon the said ship, etc. And further, until the said ship, with all its ordnance, tackle, apparel, etc., and goods and merchandises whatsoever shall be arrived at ....................... upon the said ship, etc., until it hath moored at anchor twenty-four hours in good safety; and upon the goods and merchandises, until the same be there discharged and safely landed. And it shall be lawful for the said ship, etc., in this voyage, to proceed and sail to and touch and stay at any ports or places whatsoever ..................... without prejudice to this insurance. The said ship, etc., goods and merchandises, etc., for so much as concerns the assured by agreement between the assured and assurers in this policy, are and shall be valued at ...............................

(Sue and labour clause) (Waiver clause)

Touching the adventures and perils which we, the assurers, are contented to bear and do take upon us in this voyage: they are of the seas, men-of-war, fire, enemies, pirates, rovers, thieves, jettisons, letters of mart and countermart, surprisals, takings at sea, arrests, restraints, and detainments of all kings, princes, and people, of what nation, condition, or quality soever, barratry of the master and mariners, and of all other perils, losses, and misfortunes, that have or shall come to the hurt, detriment, or damage of the said goods and merchandises, and ship, etc., or any part thereof. And in case of any loss or misfortune it shall be lawful to the assured, their factors, servants, and assigns, to sue, labour, and travel for, in and about the defence, safeguards, and recovery of the said goods and merchandises, and ship, etc., or any part thereof, without prejudice to this insurance; to the charges whereof we, the assurers, will contribute each one according to the rate and quantity of our sum herein assured. And it is especially declared and agreed that no acts of the insurer or insured in recovering, saving, or preserving the property insured shall be considered as a waiver, or acceptance of abandonment. And it is agreed by us, the insurers, that this writing or policy of assurance shall be of as much force and effect as the surest writing or policy of assurance heretofore made in Lombard Street, or in the Royal Exchange, or elsewhere in London. And so we, the assurers, are contented, and do hereby promise and bind ourselves, each one for our own part, our heirs, executors, and goods to the assured, their executors, administrators, and assigns, for the true performance of the premises, confessing ourselves paid the consideration due unto us for this assurance by the assured, at and after the rate of

In witness whereof we, the assurers, have subscribed our names and sums assured in

(Memorandum)

N.B.—Corn, fish, salt, fruit, flour, and seed are warranted free from average, unless general, or the ship be stranded; sugar, tobacco, hemp, flax, hides and skins are warranted free from average, under five pounds per cent; and all other goods, also the ship and freight, are warranted free from average, under three pounds per cent, unless general, or the ship be stranded.

Rules for Construction of Policy

The following are the rules referred to by this Act for the construction of a policy in the above or other like form, where the context does not otherwise require:

Lost or not lost

1.  Where the subject-matter is insured “lost or not lost” and the loss has occurred before the contract is concluded, the risk attaches, unless at such time the assured was aware of the loss, and the insurer was not.

From

2.  Where the subject-matter is insured “from” a particular place, the risk does not attach until the ship starts on the voyage insured.

At and from

3.  (a)  Where a ship is insured “at and from” a particular place, and it is at that place in good safety when the contract is concluded, the risk attaches immediately.

(Ship)

(b)  If the ship be not at that place when the contract is concluded, the risk attaches as soon as it arrives there in good safety, and, unless the policy otherwise provides, it is immaterial that it is covered by another policy for a specified time after arrival.

(Freight)

(c)  Where chartered freight is insured “at and from” a particular place, and the ship is at that place in good safety when the contract is concluded, the risk attaches immediately. If it be not there when the contract is concluded, the risk attaches as soon as it arrives there in good safety.

Idem

(d)  Where freight, other than chartered freight, is payable without special conditions and is insured “at and from” a particular place, the risk attaches proportionately as the goods or merchandise are shipped; provided that if there be cargo in readiness which belongs to the ship-owner, or which some other person has contracted with the ship-owner to ship, the risk attaches as soon as the ship is ready to receive such cargo.

From the loading thereof

4.  Where goods or other movables are insured “from the loading thereof”, the risk does not attach until such goods or movables are actually on board, and the insurer is not liable for them while in transit from the shore to the ship.

Safely landed

5.  Where the risk on goods or other movables continues until they are “safely landed”, they must be landed in the customary manner and within a reasonable time after arrival at the port of discharge, and if they are not so landed the risk ceases.

Touch and stay

6.  In the absence of any further licence or usage, the liberty to touch and stay “at any port or place whatsoever” does not authorize the ship to depart from the course of its voyage from the port of departure to the port of destination.

Perils of the sea

7.  The term “perils of the sea” refers only to fortuitous accidents or casualties of the seas. It does not include the ordinary action of the winds and waves.

Pirates

8.  The term “pirates” includes passengers who mutiny and rioters who attack the ship from the shore.

Thieves

9.  The term “thieves” does not cover clandestine theft or a theft committed by any one of the ship’s company, whether crew or passengers.

Restraint of princes

10.  The term “arrests, etc., of kings, princes, and people” refers to political or executive acts, and does not include a loss caused by riot or by ordinary judicial process.

Barratry

11.  The term “barratry” includes every wrongful act wilfully committed by the master or crew to the prejudice of the owner, or, as the case may be, the charterer.

All other perils

12.  The term “all other perils” includes only perils similar in kind to the perils specifically mentioned in the policy.

Average unless general

13.  The term “average unless general” means a partial loss of the subject-matter insured other than a general average loss, and does not include “particular charges.”

Stranded

14.  Where the ship has stranded, the insurer is liable for the excepted losses, although the loss is not attributable to the stranding, provided that when the stranding takes place the risk has attached and, if the policy be on goods, that the damaged goods are on board.

Ship

15.  The term “ship” includes the hull, materials and outfit, stores and provisions for the officers and crew, and, in the case of vessels engaged in a special trade, the ordinary fittings requisite for the trade, and also, in the case of a steamship, the machinery, boilers, and coals, oils, and engine stores, if owned by the assured.

Freight

16.  The term “freight” includes the profit derivable by a ship-owner from the employment of the owner’s ship to carry the owner’s own goods or movables, as well as freight payable by a third party, but does not include passage-money.

Goods

17.  The term “goods” means goods in the nature of merchandise, and does not include personal effects or provisions and stores for use on board.

In the absence of any usage to the contrary, deck cargo and living animals must be insured specifically, and not under the general denomination of goods.

R.S.O. 1990, c. M.2, Sched.; 1993, c. 27, Sched.

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