Liability of insurer in marine insurance

Abstract

The recent legislation regulating the business of insurance underlines .the importance that insurance is assuming locally. This trend is further enhanced by rapid development in transhipment trade, ship repair and related industry. Our Commercial Code contains only a few provisions regulating the business of marintne insurance and as these are inadequate, our Courts whenever faced with marine insurance problems, refer to English case law and Anglo American text writers. The contract of insurance is one involving 'maximum. good faith' because the insurer has to rely on the assured in order to assess the risk involved. The principle of good faith in turn affords protection to the insurer, who may avoid liability if he proves any form of 'bad faith' or even misrepresentation even if not made fraudulently or violates a warrant comprised in the policy, on the part of the assured. On the other hand, the possibility to insure against loss and the right to be indemnified encourages business transactions. As already indicated the provisions of tbe Commercial Code on Marine Insurance are inadequate and as a result of this, extensive reference to the Marine Insurance Act 1906 and English caselaw has to be made in order to understand the Limitation of Insurer's Laibility in Marine Insurance. Moreover it is felt that as the business of insurance is likely to increase and moreover as we have our own national insurance company, the present provision regulations this matter have to be improved upon, or a completely new legislation re-drafted on the same lines of the marine Insurance Act 1906.