MARINE INSURANCE.

A POLICY of marine insurance is a contract whereby one person in consideration of a premium undertakes to indemnify another from loss which may be caused by certain perils named in the policy. It is a contract in which, by the law of England, the strictest good faith is required, otherwise it will not be binding on the underwriter. The principles of marine insurance differ materially from those of fire insurance and life insurance, a marine insurance being strictly a contract of indemnity against loss, as will be seen hereafter.

INSURABLE INTERESTS.

Any person who has an interest in a ship, goods, freight, money, or profits, &c., may insure his interest, but no one can become entitled to any benefit under a policy unless he has some interest in the subject insured. He need not have a right to the whole, nor even to any definite part, but he must have some interest in it. The interest need not be existing at the time the policy is made, it is sufficient if there is an interest at the time of the loss, therefore freight which will hereafter arise from a voyage may be insured. The policy need not disclose the nature of the interest; thus, if a mortgagee insures he need not state in the policy that he is mortgagee.

If the ship is sold, the purchaser does not become entitled to any benefit of the policies then effected on her unless he has made an express agreement to that effect with the former owner.

A consignee who is owner of goods can lawfully insure them; but if he is only agent for another person, then he can only insure for the benefit of the real owner. The owner of goods can also insure the profit or commission which he expects to make upon the goods. The master may insure his wages, but the seamen cannot do so. Money advanced on bottomry can also be insured by the lender, to protect himself from the loss which he would sustain if the ship did not reach her destination.

A charterer who has advanced money to the shipowner on account of freight, has an insurable interest in the amount he has advanced, but if the money is advanced, not as part of the freight, but only as a loan to meet disbursements, then the charterer has no insurable interest in it.

An underwriter who has insured any risk may re-insure the same risk, so as to indemnify himself against loss under the policy he has underwritten.

A contract of marine insurance is in the eye of the law strictly a contract of indemnity, to protect the insured against loss, and not to enable him to make a profit out of the insurance. An insurer, therefore, cannot insure goods in which he has no interest, neither can he insure any greater sum than the amount of his interest in the subjectmatter insured; but he may in the policy fix his own value on the interest, and that will be binding on both assured and underwriter provided that the interest has not been over-valued with any fraudulent intention. if any fraudulent over-valuation has been made, the policy is altogether void, and the assured cannot recover anything under it, not even the real amount of his interest.

Wager Policies:—A policy on a British ship or her cargo is void under the Statute 19 Geo. III., c. 37, if, on the face of it, it professes to dispense with the necessity of any proof of the interest of the assured, either by the words "interest or no interest," or "without further proof of interest than the policy," or "without benefit of salvage to the insurer," or "policy to be deemed proof of interest," or any similar words with the same object. A mere valued policy, however, is not within the Act, and so long as the assured has some bona fide interest, it is quite competent for him to fix his own value upon it in the policy.

Illegal Insurances :-Voyages which are prohibited by the law, and goods which are intended for some illegal trade (such as smuggling, &c.) cannot be insured. If a policy is void in consequence of its having been effected for an illegal voyage, the assured cannot recover back the premium, unless he can show that he was altogether ignorant of the illegal intention.

The subjects of a neutral state have a right to trade with a

belligerent (subject, of course, to the risk of the goods being seized by the other belligerent), and an insurance of such goods is therefore valid, and the underwriter is liable if he was informed of the nature of the risk before the policy was effected.

A vessel attempting to run a blockade is liable to be confiscated if captured, but the voyage is not an illegal one, and an insurance can therefore be effected on it; but to make the underwriter liable he should be informed of the object of the voyage, as it is not an ordinary risk.

INSURANCE AGENTS.

Insurances effected with private underwriters are usually negotiated by brokers. An insurance broker who undertakes to effect an insurance is bound to exercise proper skill and diligence, and he must insert all clauses usually inserted in policies for the voyage intended to be insured against. If he fail to do so he is liable to his employer for any loss which the latter may sustain in consequence of such neglect. The agent who effects an insurance is entitled to a commission of £5 per cent. on the premium, but under the Stamp Acts he is not entitled to charge any commission unless a properly stamped policy has been executed. Any insurance agent or other person who issues a document purporting to be a copy of a policy while there is not in existence a policy duly stamped, whereof such document is a copy, is liable to a penalty of £100.

The broker is liable to the underwriter for the amount of the premium, but in respect of losses under the policy, the underwriter is liable to account with the assured, and not with the broker. The shipowner, however, is liable to the broker, and not to the underwriter, for the amount of the premium of insurance, and after issuing a policy the underwriter must look to the broker for payment of the premium; he cannot claim it from the shipowner, as the receipt in the policy discharges him from liability.

The broker has a lien on the policy for the amount due to him for premiums, and he can therefore retain it until he is paid.

A part owner of a ship has no implied authority to effect an insurance as agent for his co-owners, and if he insures without

authority he cannot charge the premiums against his co-owners, unless they have since adopted the insurance. A part owner who is ship's husband, however, usually receives authority to insure in the agreement by which he is appointed.

MISREPRESENTATION AND CONCEALMENT.

In effecting a contract of insurance the utmost good faith must be observed by both parties, and if the assured, before effecting the insurance, either wilfully or through ignorance misrepresents or conceals any facts which might have influenced the underwriter in accepting the risk or in fixing the amount of the premium, the policy will be void, even if the underwriter has not been in any way prejudiced by the concealment or misrepresentation. If, however, the assured merely states his bona fide belief that a certain fact is true without alleging it as a fact, that will not avoid the policy. The misrepresentation need not be in writing, a merely verbal misstatement is sufficient to avoid a policy. If the representation is inserted in the policy it then becomes a warranty, and must be literally and strictly complied with; if not inserted in the policy the assured is protected, provided that the representation is substantially true.

A "concealment," in order to vitiate a policy, must be the suppression of some material fact known to the assured, and which the underwriter has not the means of knowing. Any circumstance is considered material which would probably make the risk appear greater to the underwriter.

Good faith forbids either party, by concealing what he knows, to draw the other into a bargain from his ignorance of the facts. The facts lie most commonly in the knowledge of the assured only; the underwriter trusts to his representation, and relies upon the assured not keeping back any circumstance to mislead him, or which would influence him in estimating the risk. The keeping back such circumstance is a fraud, and although the suppression may happen simply through a mistake, the policy is void because the risk is different from that which was understood and intended to be incurred by the underwriter.

The assured, however, is not bound to mention what the underwriter knows, or ought to know. For example, the contents of Lloyd's Lists are supposed to be known to the underwriters; but the assured must not make any misrepresentation to prevent the underwriter from looking at the List. Nor is it necessary for the assured to give information as to what lessens the risk, nor general topics of speculation, nor loose rumours, nor the difficulty of the voyage, &c., and he need not explain customs of trade, or other similar matters which are supposed to be common knowledge.

If it should turn out that in consequence of some misrepresentation, the ship has not been legally insured the underwriter is bound to return the premium unless the misrepresentation was fraudulent.

WARRANTIES.

A warranty in marine insurance is a condition or contingency on which the validity of the entire policy depends. Warranties are of two kinds (1) express, and (2) implied.

Express Warranties :-An express warranty is a statement inserted in writing on the face of the policy, either in the body of the policy, or in the margin, or at the foot, or contained in an annexed paper which is particularly referred to in the body of the policy. Every express warranty must be strictly and literally complied with, otherwise the policy is invalid. It is perfectly immaterial for what purpose a warranty is introduced, but when inserted the contract does not exist unless the warranty is strictly complied with.

The most usual express warranties which are inserted in policies are the following: That the ship will sail on, or before, a certain day, that the ship was safe on a certain day, that the ship (in time of war) is neutral property, &c., and no express form of words is necessary to constitute a warranty.

If a ship is warranted "to sail" before a certain day she must commence her voyage before that day. The warranty is not complied with by the vessel raising her anchor, getting under sail, and moving onwards, unless she has everything ready for the performance of the