Insurance

Notes

1 E J MacGillivray and others, MacGillivray on Insurance Law (13th edn, Sweet & Maxwell 2015).

2 Prudential Insurance Co v IRC [1904] 2 KB 658, 663.

3 Consideration is usually represented by the payment of premium or the promise to pay a premium, although it is possible for other consideration to be provided for and it is unlikely that a contract of insurance will be unenforceable due to the inability of the insured to identify any consideration.

4 Marine insurance contracts are an exception to this general principle. Section 22 of the Marine Insurance Act 1906 provides that: ‘Contract must be embodied in a policy. Subject to the provisions of any statute, a contract of marine insurance is inadmissible in evidence unless it is embodied in a marine policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded, or afterwards.’

5 Providing the contract is not a contract of marine insurance. Further, whilst the contract may be valid and enforceable, an oral contract of insurance it is likely to have been agreed in contravention of the insurers’ regulatory obligations to achieve contract certainty by the complete and final agreement of all terms between the insured and insurer by the time that they enter into the contract; h­t­t­p­:­/­/­w­w­w­.l­o­n­d­o­n­m­a­r­k­e­t­g­r­o­u­p­.c­o­.u­M­n­d­e­x­.p­h­p­?­o­p­t­i­o­n­=­c­o­m­_­c­o­n­t­e­n­t­&v­i­e­w­=­a­r­t­i­c­l­e­&i­d­=­2­1­0­:­i­n­d­e­x­&c­a­t­i­d­=­3­5­:­c­o­n­t­r­a­c­t­-­c­e­r­t­a­i­n­t­y­-­g­u­i­d­a­n­c­e­&I­t­e­m­i­d­=­1­3­6­ (last accessed 8 February 2016).

6 Lucena v Craufurd (1806) 2 Bos & PNR 269, 127 ER 630 (HL).

7 (1766) 3 Burr 1905.

8 Insurance Act 2015 s 3(4).

9 ibid s 3(3).

10 ibid Sched 1 s 2.

11 ibid Sched 1 s 4.

12 Section 33(1) of the Marine Insurance Act 1906 relates to and defines a promissory warranty as ‘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 he affirms or negatives the existence of a particular state of facts’.

13 Section 33(3) of the Marine Insurance Act 1096 provides: ‘A warranty … is a condition which must be exactly complied with, whether it be material to the risk or not. If it be 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 him before that date.’

14 Section 10(1) of the Insurance Act 2015 provides that: ‘Any rule of law that a breach of warranty (express or implied) in a contract of insurance results in the discharge of the insurer’s liability under the contract is abolished.’

15 Insurance Act 2015 s 11.

16 See h­t­t­p­:­/­/­w­w­w­.g­a­r­d­.n­o­/­w­e­b­/­u­p­d­a­t­e­s­/­c­o­n­t­e­n­t­/­5­1­8­5­7­/­s­p­e­c­i­a­l­i­s­t­-­o­p­e­r­a­t­i­o­n­s­-­l­i­m­i­t­a­t­i­o­n­-­o­n­-­p­i­-­c­o­v­e­r­ (last accessed 9 February 2016).

17 See ch 12.

18 The Welcar form uses the term “Assured(s)” rather than “Insured(s)” but the difference in nomenclature is not of any significance and this chapter uses the term insured(s) for consistency throughout.

19 National Oilwell (UK) Ltd v Davy Offshore Ltd [1993] 2 Lloyd’s Rep 582.

20 BP Exploration Operating Co Ltd v Kvaerner Oil Field Products Ltd [2004] Ewhc 999 (Comm).

21 The Welcar form provides that ‘the interest of the Other Assured(s) shall be covered throughout the entire Policy Period for their direct participation in the venture, unless specific contract(s) contain provisions to the contrary’.

22 882 S.W.2d 160 (Mo. App. Ct. 1994).

23 794 P.2d 1077 (1990).

24 See n19.

25 Assuming the policy is not governed by the Insurance Act 2015.

26 The standard declarations include the statement that: ‘The Project Period may be extended at terms and premium to be agreed by the lead Underwriter.’

27 See paragraphs 14.19–14.21 on warranties above

28 The insurers’ total liability for any single physical damage claim will typically be capped at 125 per cent of latest Schedule B values.

29 Cassel v Lancashire & Yorkshire Accident Insurance Co (1885) 1 TLR 495.

30 Thames and Mersey Marine Insurance Co v Hamilton Fraser & Co (The Inchmaree) (1887) 12 App Cas 484.

31 Promet Engineering (Singapore) Pte Ltd v Sturge and Ors (The Nukila) [1997] 2 Lloyd’s Rep 146 (CA).

32 [2000] 1 Lloyd’s Rep 612.

33 [1983] 2 Lloyd’s Rep 91, [1984] QB 127.