Policy Wording

Please note the changes in the Policy Wording 2017 compared to the 2016 wording

• In 1.17 of the General Terms, our policy is now subject to the Insurance Act 2015 instead of the Marine Insurance Act.
• We have also added “liability” to clause (a) of the Exclusions and Limitations.

The Marine Insurance Act is replaced by the Insurance Act 2015 since August 2016.  In our Policy Wording 2017 the new Act will be incorporated. You will note that Charterama will not be utilizing any of the opt outs permitted in the Act. The differences are basically about 4 relevant changes:

Disclosure

In the Marine Insurance Act the insured has the duty to disclose all known material circumstances. In the new Act the insured has a duty to make a “fair presentation of the risk” to the insurer. Obviously still with obligations from the insured to disclose but where the Marine Insurance Act had a single remedy of avoidance as from inception for nondisclosure and misrepresentation, the new Act introduced proportionate remedies for non-disclosure and misrepresentation.

Warranties

In the Marine Insurance Act a breach of warranty discharges the insurer’s liability under the insurance contract in its entirety, and permanently, from the date of breach, even if the breach is only trivial or does not in any way relate to the insured’s loss.
In the new Act the insurer may not rely on the insured’s breach of a warranty or other policy term to avoid paying a claim if the breach could not have increased the risk of loss.

Fraudulent acts

Under the Marine Insurance Act there are co-existing remedies of forfeiture under common law and avoidance under statute. The new Act has a new single statutory regime for fraudulent claims, whereby the insurer is not liable to pay fraudulent claims and may elect to terminate the contract, and refuse to pay claims relating to losses suffered after the fraudulent act; but whether or not it terminates the contract, the insurer will remain liable for all legitimate losses suffered before the fraudulent act.

Contracting out

The new Act allows parties to agree on different terms or agree to exclude certain changes, provided any “disadvantageous term” (for the insured) meets certain “transparency requirements”. Meaning that the insurer must take sufficient steps to draw the disadvantageous term to the insured’s attention in advance and the disadvantageous term must be clear and unambiguous as to its effect.