Marine insurance is the oldest branch of insurance and retains doctrines found nowhere else. Under the Insurance Code it covers, broadly, vessels, goods, freight, profits, and other subjects exposed to maritime perils, together with the inland marine risks the Code includes, such as goods in transit by land or air as an incident of a marine voyage and certain bridges, tunnels, and instrumentalities of transportation. The perils insured against are the PERILS OF THE SEA, meaning the fortuitous accidents or casualties peculiar to the sea, such as stranding, sinking, collision, and heavy weather of an extraordinary character; these are distinguished from PERILS OF THE SHIP, which are the ordinary wear and tear, the natural and inevitable action of the sea, and losses from the inherent defect or ordinary decay of the thing insured, and which the insurer does NOT cover. Three doctrines dominate disputes. First, the implied warranty of SEAWORTHINESS: in every marine insurance upon a ship or freight, there is an implied warranty that the ship is seaworthy, meaning reasonably fit to perform the service and encounter the ordinary perils of the voyage; the warranty attaches at the commencement of the risk, and where the voyage is in stages requiring different equipment or preparation, seaworthiness is required at the start of each stage. A breach avoids the policy, and no showing that the unseaworthiness caused the loss is required for the ship's own policy. Second, DEVIATION: a departure from the course of the voyage or an unreasonable delay is proper only where caused by circumstances beyond the control of the master, or necessary to comply with a warranty, or to avoid a peril, or to save human life or aid a ship in distress; an IMPROPER deviation exonerates the insurer from liability from the time it begins. Third, AVERAGE: a GENERAL average loss is one deliberately incurred for the common safety of the venture, such as jettisoning cargo to lighten a ship, and it is contributed to by all the interests saved in proportion to their value; a PARTICULAR average is a partial loss borne alone by the owner of the thing damaged. So marine insurance covers perils of the sea but not perils of the ship, imposes an implied warranty of seaworthiness, is avoided by improper deviation, and allocates deliberate sacrifices through general average.
What It Covers
Vessels, goods, freight, profits, and other subjects exposed to maritime perils, plus the inland marine risks the Code includes.
Perils of the SEA vs. Perils of the SHIP
Perils of the sea are fortuitous accidents peculiar to the sea — stranding, sinking, collision, extraordinary heavy weather — and ARE covered. Perils of the ship are ordinary wear and tear, the natural action of the sea, and loss from inherent defect or ordinary decay — and are NOT.
The Implied Warranty of Seaworthiness
Every marine policy on a ship or freight carries an implied warranty of SEAWORTHINESS — reasonably fit to perform the service and meet the ordinary perils. It attaches at the commencement of the risk, and where the voyage is in stages, at the start of each stage. Breach avoids the policy.
Deviation
A departure from the course or an unreasonable delay is proper only if caused by circumstances beyond the master's control, necessary to comply with a warranty, to avoid a peril, or to save human life or aid a ship in distress. An IMPROPER deviation exonerates the insurer from the time it begins.
General vs. Particular Average
GENERAL average — a loss deliberately incurred for the common safety (jettisoning cargo to lighten the ship) — is contributed to by ALL interests saved in proportion to value. PARTICULAR average is a partial loss borne alone by the owner of the thing damaged.
Frequently Asked Questions
What are perils of the sea? Fortuitous accidents or casualties peculiar to the sea, such as stranding, sinking, collision, and heavy weather of an extraordinary character, as distinguished from perils of the ship, which are ordinary wear and tear and inherent defect and are not covered.
What is the warranty of seaworthiness? An implied warranty in every marine insurance on a ship or freight that the vessel is reasonably fit to perform the service and encounter the ordinary perils of the voyage. It attaches at the commencement of the risk, and at each stage of a staged voyage.
What is an improper deviation? A departure from the course of the voyage or an unreasonable delay not caused by circumstances beyond the master's control, not necessary to comply with a warranty, avoid a peril, or save life. It exonerates the insurer from the time the deviation begins.
What is general average? A loss deliberately incurred for the common safety of the maritime venture, such as jettisoning cargo, which all the interests saved must contribute to in proportion to their value.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
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