This chapter commences with a brief overview of the nature of contracts of insurance generally, introducing the concepts of utmost good faith and fair presentation, indemnity, and proximate cause of loss, leaving more detailed explanations of these concepts to the on-line chapter on insurance. It then takes the terms of a typical marine cargo insurance policy, the Institute Cargo Clauses, and examines them in some detail, including the extent of risk coverage provided, including excluded causes of loss, when risk attaches to the insured property and when cover under the policy ends. In the process it provides examples of the way in which the insuring provisions of a contract interact with the issue of causation of loss in `all risks’ and other policies.
Chapter
Put broadly, insurance is a contractual process whereby risk is transferred from a person who might incur a loss to an insurer. Whilst insurance law is at root merely an example of applied contract, in fact it has some unique characteristics and practices and a terminology all of its own. In this chapter we will consider the key characteristics of insurance law. After examining the meaning of insurance, including the concepts of indemnity and insurable interest in liability and property insurance, we move to the structure of insurance policies. The ways the courts have interpreted insurance wordings and insurance warranties, conditions precedent, and basis of the contract clauses are dealt with before the extensive reforms wrought by the Insurance Act 2015 are introduced. Insurance policies, even so-called all risks policies, do not cover all causes of loss which an insured might suffer, so the concept of causation in insurance is particularly important and this is dealt with next. The chapter closes by reviewing insurance claims, including the effect of fraudulent claims, how the level of disclosure expected of an insured is far higher than in a non-insurance context, and how these issues have been the subject of substantial reform under the newInsurance Act.
Chapter
This chapter focuses on the context in which risk in a commercial transaction can be transferred. There is always, in all sales of goods, the risk that the goods will be damaged or lost in transit from seller to buyer, except when the sale is conducted face to face. The parties may seek to control this risk in a number of ways, but typically will transfer its financial impact to a third party through insurance. In the international sales of goods, particularly where the goods are transported by sea, not only are the physical risks increased when compared to a domestic sale, but the logistics are such that determining the cause of the loss may be difficult, and attributing liability problematic. Consequently, it is preferable to have the security of a claim against an identifiable financially secure party in the event of loss. In documentary sales the buyer is induced to make payment or at least to accept risk of loss or damage to the goods only because that risk is insured. Consequently, contracts of marine cargo insurance have an essential role to play in such sales, and it is to this form of insurance that the chapter is devoted.
