8. A policy of sea-insurance is not valid when it is made. for any time exceeding twelve months (¿). Sect. 8. Statutory requisites of A policy of sea insurance is not valid unless it specifies the a policy. particular risk or adventure (k), the names of the subscribers or underwriters, and the sum or sums insured (1). By a document called an " open cover" an underwriter agreed to re-insure an insurance company to the extent of the excess, over certain amounts mentioned in the document, of the risks to be undertaken by them from time to time, on goods shipped by certain steamship lines. The limit of the excess on any one ship was specified. The Court of Appeal held that the document was a contract for sea-insurance within sect. 93 (1) of the Stamp Act, 1891, and that it did not specify the sum insured, and was therefore invalid as a policy (m). Every policy must contain the name or firm of one or more persons interested in the insurance, or of the consignor or consignee of the property insured, or of the person or persons residing in this country who shall receive the order for and effect the insurance, or of the person or persons who shall give such order to the agent immediately employed to effect the insurance; otherwise the same is to be null and void to all intents and purposes (n). 9. We will now advert briefly to the division frequently Classifications made of policies into interest and wager, valued and open, of policies. named and floating, time and voyage policies. wager An interest policy is one which shows by its form that the Interest and assured has a real, substantial interest in the thing insured: policies. in other words, that the contract 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; (i) Stamp Act, 1891, s. 93 (2), (3). (k) See Edwards v. Aberay ron Mutual Ship Ins. Society (1875), 1 Q. B. D. 563. (7 Stamp Act, 1891, s. 93 (3). In re The Arthur Average Association, (1875) L. R. 10 Ch. 542, on the (n) 28 Geo, 3, c. 56, ss. 1, 2, Sect. 9. and every policy is taken to be an interest policy, unless the contrary is clearly expressed on the face of it (0). Definition of a ▲ wager policy, (sometimes called an honour policy), is one wager policy. which contains words implying that the contract it embodies is not really an insurance, but a wager; i. e., a pretended insurance, founded on a fictitious risk, where the assured has no interest in any thing insured, and can, therefore, sustain no loss by the happening of any of the casualties against which the supposed insurance professes to protect him (p). Form of a wager policy. Definition of a valued, and of an open policy. A wager policy is generally known by having one or other of the following clauses written on the face of it :-"interest or no interest"; or, "without further proof of interest than the policy"; or, "policy to be deemed sufficient proof of interest" (q); or, "without benefit of salvage to the insurer," or some analogous clause, showing that the assured means to give no proof of his having any interest whatever in the subject insured, except the mere production of the policy itself; and thereby bringing him directly within the scope of the Act 19 Geo. 2, c. 37, s. 1, which prohibits all such policies, as gaming policies, except in certain specified cases. A valued policy is one in which the agreed value of the subject insured, as between the assured and underwriter, for the purposes of the insurance, is expressed on the face of the policy. An open policy is one in which the value of the subject insured is not thus fixed or agreed in the policy, as between the assured and the underwriter, but is left to be estimated in case of loss. The chief practical difference between valued and open policies in case of loss is that in the former the value is fixed (0) See Cousins v. Nantes (1811), 3 Taunt. 513. (p) Though such a policy is termed a wager policy, it may in fact be made in order to protect an insurable interest. On the other hand a policy in form an interest policy may not be intended to protect a real interest, and may be void for want of insurable interest. See post, ss. 311-313; see also the Marine Insurance Bill, 1899, 8. 4. (1) Murphy v. Bell (1828), 4 Bing. 567. The clause which makes the policy itself proof of interest is commonly called the "p. p. i." clause. by the policy; in the latter it must be proved by the production of tradesman's bills, invoices, bills of shipping charges, surveyor's estimates, and other necessary vouchers. As the value of ship and freight is more difficult to prove in this way than the value of goods, the former interests are generally insured in valued, the latter frequently in open policies. Sect. 9. A voyage policy is one in which the limits of the voyage Voyage and time policies. are designated in the policy by specifying a certain place at which it is to begin (called the terminus a quo); and another at which it is to end (called the terminus ad quem): as, for instance, where a ship is insured "at and from London to Buenos Ayres." A time policy is one in which the limits of the risk are designated only by certain fixed periods of time, at which it is respectively to begin and end: as where a ship is insured "from the first day of January, A.D. 1901, to the 1st day of June, 1901," or for 3, 6, or 12 months, &c. Policies are also occasionally effected which, in form, partake of the nature both of time and voyage policies; as where a ship is insured "from London to Buenos Ayres for six months; " or, "from the first of January, 1901, to the 1st of June, in the same year, on the ship at and from London to Buenos Ayres; " or "for twelve months from the date of sailing from Leith." These policies, however, as we shall see more at large hereafter, are effectively time policies; the risk commencing and expiring with the limits of time specified therein. A named policy is one in which the adventure is limited to a ship specifically named therein, as where goods by the ship Emma are insured from Hamburg to London. A floating policy is one in which there is no limitation of the risk to a particular ship, as where goods "on ship or ships" are insured for the same voyage (r). (r) A floating policy is defined in the Marine Insurance Bill, 1899, s. 30 (1), as "a policy which de scribes the insurance in general Policies are both time and voyage policies. Named and floating policies. 10. The Forms of Policy employed in different mercantile communities are exceedingly various; the merchants and underwriters of our own country have adhered with persevering tenacity to the old and hardly intelligible form which was introduced at an early period into England (s); and although this has always been regarded by our Courts of Law as an absurd and incoherent instrument (t), yet length of time and a variety of decisions have now given it such a degree of certainty that it is likely now to be retained among the chief instruments of English commerce («). The following is the common printed form of policy which was adopted as the statutory form in the previous Stamp Acts. S. G. (x). [ £ [ BE IT KNOWN THAT (1) (1) & (2) Blanks for the name or as well in names of the party for whom or by whom the ] own name as for and in the name and Delivered the names of all and other person or persons, to whom day of the same doth, may or shall appertain, in part or in every 19. all; doth make assurance, and cause (2) [ [aggregate of policy is effected. or not lost." ] and them and every of them to be (3) Clause "lost insured, (3) lost or not lost, at and from (4) [ ](5) upon any [STAMP.] £10,000 kind of goods and merchandises, and also upon the body, sums insured.] tackle, apparel, ordnance, munition, artillery, boat and other furniture, of and in the good ship or vessel, (6) called the [ ]; whereof is master, under God, for the present to be defined by subsequent declara- (s) It was adopted as a statutory (t) Per Buller, J., 4 T. R. 210, "It is wonderful that policies should be drawn with so much laxity": Lawrence, J., in Marsden v. Reed (1803), 3 East, 579. "This policy of insurance is a very strange instrument, as we all know and feel": per Mansfield, C. J., in Le Cheminant v. Pearson (1812), 4 Taunt, 380, &c. () The Marine Insurance Bill, 1899, recognized it as the standard form of policy. See Sched. I. (x) For the suggested meanings of these letters, see Gow, p. 30, voyage (6) [ ], Sect. 10. or whosoever else shall go for master in the said ship, or by whatsoever other name or names the same ship or the master thereof is or shall be named and called. of the com (7) BEGINNING the adventure upon the said goods (7) Description and merchandises from the loading thereof on board mencement, conthe said ship [ upon the said ship, &c. [ tinuance, and ]; termination of and so shall continue and endure, during her abode there on the said ship, &c.; and further, until the said ship, with all her ordnance, tackle, apparel, &c., and goods and merchandises whatsoever, shall be arrived at [ ]; upon the said ship, &c., until she hath moored at anchor twenty-four hours in good safety, and upon the goods and merchandises, until the same be there discharged and safely landed. the risk. touch and stay. (8) AND it shall be lawful for the said ship, &c., in (8) Liberty to this voyage, to proceed, sail to, and touch, and stay at any ports, or places whatsoever, [ insurance. ]without prejudice to this (9) THE said ship, &c., goods and merchandises, &c., for so much as concerns the assured, by agreement between the assured and assurers in this policy, are and shall be valued at [ ]. (9) Valuation blank for insert clause, and ing value. (10) Clanse perils insured enumerating the against. (10) TOUCHING the adventures and perils which we, the assurers, are contented to bear and do take upon us in this voyage, they are of the seas, men-of-war, fire, enemies, pirates, rovers, thieves, jettisons, letters of mart and counter-mart, surprisals, takings at sea, arrests, restraints and detainments of all kings, princes and people of what nation, condition or quality soever, barratry of the master and mariners, and of all other perils, losses and misfortunes that have or shall come to the hurt, detriment or damage of the said goods and merchandises, and ship, &c., or any part thereof. (11) AND in case of any loss or misfortune, it shall (11) Sue and be lawful to the assured, their factors, servants and assigns, to sue, labour, and travel for, in, or about the defence, safeguard, and recovery of the said goods and merchandises, and ship, &c., or any part thereof, without labour clauses. |