Marine Insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination.
Marine insurance consists of several warranties. A warranty means a stipulation upon which the fulfillment of the very contract depends. It is an undertaking by the insured to the insurer that something shall or shall not be done or some conditions are to be fulfilled. Since it is undertaking of the insured, he should abide by the warranty and any breach of warranty will discharge the insurer from any liability. In the insurance contract, it is found in the form of a condition which must be complied with. When these conditions are not attained by the insured, the insurance contract becomes voidable at the option of the insurer.
Warranties are of two-types like express warranties and implied warranties.
Express warranty denotes to those undertakings which are explicitly expressed on the face of the insurance policy. The following are some of the general examples of express warranty.
- The ship will sail on the scheduled date.
- The time of the sailing of the ship should-be strictly followed.
- The subject matter insured is safe on a particular date.
- The navigation is prohibited during certain Period or during certain regions.
- Both the ship and the cargo should remain in a neutral state.
- The sailing of the ship will be conducted with the help of an armed guard.
Implied warranty denotes a type of warranty which is not explicitly expressed in the policy but is understood by the implication of the law. Like express warranties, implied warranties are binding to both the parties. The following are some of the common examples of implied warranties:
(1) Seaworthiness: The ship under voyage should be seaworthy at the commencement of the voyage. Seaworthiness denotes all-rightness of the ship in all respect. The ship must be all right, it must not be overloaded, it must be well equipped by experienced officers and crew and the sailing will be conducted with adequate provision for fuel and water Seaworthiness is essential at the commencement of the voyage.
(2) Legality of the voyage: The venture or the Voyage should be a legal one. The voyage should not be engaged in smuggling arms and ammunition or illicit liquors. So the voyage on gall should take lawful goods and commodities.
(3) Non-Deviation: There is an implied warranty that the ship should not deviate from its normal course. The ship must follow the specified course affected in the policy. If no course is affected by the Policy, the ship should follow the normal course.