Sketch of the mode in which the business of Marine Insurance is practically con ducted. Instructions to the broker to the party who wishes to protect his property by a contract of fected with On receiving this information, the broker proceeds to procure the insurance to be effected, either with some of the public insurance companies, or with the private underwriters meeting at Lloyd's. (q) If the broker determines to insure Insurance efwith a company, he has merely to go to the manager of the public compacompany, and state the particulars of the risk to be insured; nies. the rate of premium at which the company consent to take the risk is first agreed upon; and the manager then writes out a memorandum for the policy, shortly specifying the leading particulars of the adventure, and the rate of premium, which the broker signs, and the party is thus provisionally insured; the company then fills up a stamped policy according to the particulars disclosed to them, which is generally ready for delivery in four or five days; the insurance is then legally complete, and the policy is handed over to the broker, who either transmits it at once to his employer, or holds it himself. If the broker, on the other hand, prefers effecting the insurance at Lloyd's, the course pursued is somewhat different; in this case, the broker himself procures a blank form of policy, duly stamped, which he fills up with the particulars of the risk, and inserts therein such an amount of (9) See supra, 4. Insurance effected with private underwriters at Lloyd's. Sketch of the mode in which Marine Insu cally conducted. premium as his knowledge of the actual state of insurance the business of business leads him to believe that the underwriters would be rance is practi- willing to take as the price of the risk he is commissioned to insure. The stamped policy, thus filled up, he takes to Lloyd's rooms, where all the private underwriters meet, and there hands it about among the different underwriters, to whom he is known, who either accept or reject it, according to their own views of the nature of the risk, or the state of their account at the time; the policy is thus handed about, until the aggregate amount subscribed by the different underwriters equals the whole sum for which it is desired that the insurance shall be effected. Very frequently the broker, instead of thus handing about the policy itself, makes out a memorandum, technically called a slip or label, containing the heads of the risk, the sum to be insured, and the rate of premium, to which the underwriters put their names, and the sums they are willing to subscribe, with the dates of their subscription, and from which the broker afterwards fills up a stamped policy, which the underwriters then subscribe for the sums noted in the label. (r) The policy thus effected either remains in the hands of the broker, or is by him transmitted to his principal. By the general practice in this country, the premium, which in theory ought to be, and indeed on the face of the policy is acknowledged to have been, paid at once to the underwriter on his subscription of the policy, is never in fact paid to him at that time, but is passed into an account kept between him and the broker, in which the underwriter enters the sum which ought to have been paid him by way of premium to the debit of the broker, and in case of a loss occurring, only pays to the assured the balance which remains due after deducting the sum due for premium from the amount which he (the underwriter) has to pay as his proportional share of the loss. This is supposing only a single insurance transaction to be (r) This label, owing to our stamp laws, is inadmissible in evidence, and has no legally binding force or validity. pending between the same broker and the same underwriter: in actual practice there are generally several such transactions, and in that case, by the practice of Lloyd's, all the sums due from the same broker to the same underwriter for premiums are set off, in the mutual account kept between them, against the sums due from the underwriter to the broker for losses, and no cash passes between them unless it is found, on what is called the adjustment, or making up a claim for any particular loss, that the underwriter owes the broker more for losses than the broker owes him for premiums; in such case, the underwriter pays him the balance of the loss by a bill at three months; but very generally no money payment at all takes place between the broker and underwriter, till the general settlement of accounts between them, on the 31st of December in every year. The broker keeps the same kind of account with the merchant or ship-owner who employs him, and, in case of loss, either pays the amount by bill at three months, or lets it run on in the general account, against the sums he has advanced on account of his employer for premiums, &c. Such is the mode of settlement in account generally adopted at Lloyd's, as between the assured, policy brokers, and private underwriters, as we shall see more at large hereafter. Of course the underwriter requires, before payment, or passing the loss in account, to be satisfied that it has really taken place, and taken place under such circumstances as to entitle the assured to recover on the policy. If he has reason to believe that he has any good and valid defence to the claim, it will be for him to consider whether he will submit to the payment, or try the question of his liability at law. In the course of this work it will be our business to consider the nature of the several defences which will exempt him from all liability on the contract; and the mode by which both the assured and the underwriter must proceed Sketch of the mode in which to enforce their claims, or insist upon their exemptions from the business of liability, in an action at law. Marine Insu rance is practically conducted. It will be sufficient here to have presented the student (for whom alone this section, and indeed the whole of this introductory chapter is designed) with the preceding succinct statement of the mode in which, in the actual course of business, policies are effected, and payment of losses usually made. 17 CHAP. II. OF THE POLICY. SECT. I. Different Kinds of Policies, -as Interest and Wager, Valued and Open, Time and Voyage Policies. of insurance is § 16. THE written instrument in which the contract of What a policy marine insurance is embodied is called a policy of insurance. (a) The statutable definition given in our law of a Policy of Insurance is, that it is a printed or written contract of insurance, in which the premium, the risk insured against, the names of the underwriters, and the sum insured, are to be specified. (b) Before directing our attention to the language and construction of our common form of policy, we will advert briefly to the division frequently made of policies into interest and wager, valued and open, time and voyage policies. An interest policy is one which shows by its form that the assured has a real, substantial interest in the thing insured: in other words, that the contract of insurance embodied by the policy is a contract of indemnity, and not a wager. All the common forms of policy are adapted to transactions of this nature; and every policy is taken to be an interest policy, unless the contrary is clearly expressed on the face of it. (c) A wager policy is one which shows on the face of it, that the contract it embodies is not really an insurance, but a wager; i. e., a pretended insurance, founded on an ideal risk, where the assured has no interest in any thing insured, and can, therefore, sustain no loss by the happening of any of the (a) From the Italian polizza d'asse curazione. (b) 35 Geo. III., c. 63 § 11. (c) See Cousins v. Nantes, 3 Taunt. 513. Policies divided into interest and wager, valued and open, time and voyage policies. Interest and wager policies. Definition of a wager policy. C |