the whole venture, the expenses are no longer recoverable from underwriters under the sue and labour clause, for the expenses are not special, but common to several if not to all interests in the venture; they are not particular, but general; they are not the payments of servants or factors, but the recompense of salvors; they are not suing and labouring expenses, but they are General Average expenditures. They will be discussed later under the heading of “General Average.”

CHAPTER XIV

INSURANCES ON TIME: TIME POLICIES

The
The

Insurances on Time.-The discussions contained in the preceding pages have referred to the nature and obligations of the contract of marine insurance as embodied in the ordinary form of voyage policy on goods and on ship. only other usual form of policy is the time policy. system of insuring for a period of time has, on the evidence of the Ordinance of Louis XIV. (Tit. vi., Art. 7), prevailed for at least two centuries. It is worth noting that the ordinance provides for the insurance on time of both ships and cargoes, together or separately (conjointement ou séparément).

Insurance of Goods on Time. The insurance of goods on time is of a somewhat different character from the insurances so far discussed. Goods have so far been considered as in transit from one port to another, so that the specification of any particular time during which they are at risk is unnecessary. But it was specially stated above (p. 41) that a voyage insurance on goods at and from one port to another, with leave to call at intermediate ports, does not cover the goods if the ship is used either at loading, calling, or discharging port as a mere storehouse. Take, for instance, vessels kept lying at port of call waiting for orders to proceed to destination. The cause of delay in getting orders is usually the state of the market, and the delay is consequently far more than is required for merely getting the orders for which the ship originally put in. Consequently, unless the cargo-owner desires himself to run

the risk of loss during this extraordinary delay at port of call, he should specially insure the cargo for the period during which the vessel is thus extraordinarily delayed. The same principle regulates the period for which the cargo is covered at the ports of loading and discharge; for any period exceeding what is the reasonable time for loading or discharging, according to the custom of the port where the loading or discharge occurs, the assured cannot claim the protection of his voyage policy, and if he does not wish himself to bear the burden of the risk for this period he must effect a special insurance.

Open Covers.-There are other forms of time insurance on goods. The one that first occurs is the ordinary open cover. It is a kind of floating contract covering so much per vessel irrespective of the amount which has already been declared by other vessels. Such a document usually runs a year; or, to use the technical form, the sailings of the vessels declared on the policy are warranted to occur not later than 30th June or 31st December of a named year.

In every case with which the writer is acquainted the open cover is a mere document of honour; it is an unstamped undertaking given by the underwriter without receipt of anything of the nature of consideration. In it the underwriter undertakes to issue stamped policies for an amount not exceeding a named sum by every vessel, sailing before a fixed date, of specified class, size, or character in which the assured has interest to insure, the rate of premium being either stated definitely or as "to be agreed." The open cover also usually contains a clause providing for its cancellation by either of the parties on giving notice, ordinarily of one month's duration. This kind of document is nothing but a perpetual cover-note running without break between certain dates. Like a cover-note it is an honour document not enforceable in any court of law, but equally with the cover-note it is an undertaking to issue a stamped enforceable document for a consideration in some way specified. But the stamped enforceable documents are in every respect ordinary voyage policies without any special

significance arising out of their origin in what is really a time contract.

Time Policy on Goods.-But there are cases in which the contract of insurance on goods is actually embodied in a time policy, such are the insurances on effects of captains and officers of steamers running in regular employments. From the nature of the interest insured it is almost certain that some of the articles (clothing, etc.) insured at the beginning of the period are during the currency of the policy replaced by others of the same kind. So far as the writer is aware no question of the attachment of the policy to these later acquired effects has ever arisen, and it seems hardly likely that the question will ever arise in any case of bona fide insurance. But this consideration is useful as affording a stepping-stone to an insurance of a similar character which might be adopted by a merchant.

Suppose a merchant is in the habit of shipping weekly from London to New York about £2000 worth of goods; he would have in the year fifty-two risks of £2000 each. These he could insure by fifty-two separate policies of £2000 each, or by one policy covering £2000 on each shipment made by the merchant, one a week for the year. This would be a time policy, and to be legal it must not extend beyond twelve months (see p. 20).1 There are two possible ways of working a policy like this :

(1) It might be arranged that no shipment should exceed £2000, and that the underwriter should make a return of premium for the amount by which the value of any shipment fell short of £2000: e.g. a return of premium on £580 if the shipment amounted only to £1420, on £400 for a shipment of £1600, etc. etc.2 This system would give to the assured a policy covering an actual insurable

1 The requirements of the Stamp Act would be fully met by a payment of 3d. per cent on £104,000. Possibly, as the policy is a time policy, 6d. per cent on £2000 would suffice; or, taking the passage at twelve days, there would be on an average two shipments always at risk, i.e. £4000, so that 6d. per cent on £4000 might be taken as ample payment of stamp duty on this policy regarded as a time policy.

2 In such cases the Revenue Authorities would probably consent to a return of the proportionate amount of stamp duty.

interest, the amount of which could always be substantiated in a court of law.

(2) There might be no arrangement for return of premium, in which case the underwriter would nevertheless be entitled to ask for proof of amount of interest in case claim were made against him.

Floating Policy. The ordinary floating policy on goods is not strictly speaking a time policy; it is really a consolidation of a series of voyage policies. The amount is the aggregate amount of various shipments declared on the policy; the voyages covered are those stated in the text of the policy, and the stamp ought to be 3d. on every £100, or fraction of £100, contained in the insured value of each separate shipment. The mention of any time within which the policy must be used up is merely an underwriter's device to make sure that the amount of his liability in any one year is definitely ascertained. No provision of the Stamp Act is broken by extending the period within which declarations may be made.

These are the usual forms of insurance common in England which may with more or less accuracy be described as time insurances on goods. On the Continent, especially in manufacturing districts at some distance from the seaboard, the needs of commercial men have led to the completer elaboration of time policies on goods. There it is often impossible to name the vessel which will convey the goods to their destination over sea, and the goods pass from the maker's and owner's control within a short distance of the factory door. One of the most interesting forms of policy arising out of these circumstances is that common in Switzerland under the name of "Pauschal-police." By it insurance is effected on all the shipments of goods made by the assured on certain voyages or to certain destinations, not exceeding a fixed amount per diem in return for a certain fixed premium; for instance, "on all goods which happen to be in transit on one and the same day from A. to B., C., D., or E., and vice versa, the company hereby insures the sum of one million francs as their aggregate value, in return for an annual premium of four per mille, that is, 4000 francs." In such policies the maximum line in any one con 1 And in the United States of America.