Abstract

Article

Marine Insurance - Range

The identification of a contract of Marine insurance sometimes gives rise to difficulty because of the mixed nature of its cover. It is a matter of characterisation of the policy in its entirety. Gibbs v Mercantile Mutual Insurance (Australia) Limited (2003) 214 CLR 604 at 610; Leon v Casey [1932] 2 KB 576; Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226. If a contract of insurance promises to indemnify the insured against losses which are substantially incidental to a marine adventure, it is a contract of Marine insurance within the meaning of s 7 of the Marine  Insurance Act, and ss 9(1)(d) and 9(1A) of the Insurance Contracts Act would exclude it from itsown operation otherwise. DMS Maritime Pty Ltd v Navigators Coorp Underwriters Ltd [2020] QSC 382. It does not cease to be so because it also protects the insured against land risks which are incidental to a sea voyage (s. 8(1), but it would do so in respect of losses which are not substantially incident to marine adventure. Leon v Casey (supra).

The question is not whether a policy looks like a traditional marine insurance policy, nor the nature of the loss giving rise to the claim, but whether the insured perils are consequent on or incidental to the navigation of the sea. Continental Illinois National Bank & Trust Co of Chicago v Bathurst (The “Captain Panagos DP”) [1985] 1 Lloyd’s Rep 625; Gibbs v Mercantile Mutual Insurance (supra). Primarily, a policy of insurance will not insure in respect of a marine adventure unless the ship the subject of the policy will be used for voyages that involve traversing the open sea. An adventure involving a ship that is not intended to leave a river is not a marine adventure for this purpose, but a policy insuring the risks involved in a marine adventure may also cover risks that occur in rivers, creeks, bays, inlets, harbours, dry docks or ports, or on land. But to qualify as a risk of a marine adventure, and comes within the primary scope of the Act, the risk must be incidental to or a consequence of a voyage or intended voyage on the open sea. In form, it may be identical to a Marine policy and insure against the same kind of risks, but, unless the risk involves, or is incidental to, or a consequence of, a voyage on the open sea, it will not do so. A Marine policy may cover risks in loading and unloading cargo, the hazards of docks, ports, harbours and rivers, and even the risks associated with the building of a ship. This includes Liability cover for the perils of the sea that are incidental to, or consequent on, the use or intended use of ships engaged in the international or coasting trade or on voyages across the open sea. Events when a vessel is not at sea may not be caused by perils of the seas, but may be consequent on exposure to maritime adventures.

 

AApplication of  the Insurance Contracts Act to Composite Policies

If the policy provides cover for only one kind of risk, the question whether it is within the type of cover excluded from the operation of the Insurance Contracts Act will depend upon the characterisation of the contract in its entirety. But sub-ss 9(1A), (1B) and (1C) of the ICA require that it must be performed at another level if a single contract of insurance includes two groups of covers, one of which could be characterised as a contract which would be affected by the section, and the other not. If that distinction may be made, the ICA will not apply to the first group, but it will apply to the second. The characterisation is applied to the groups individually. The exemption is given only to the exent element. The grouping of provisions must be consistent with the contractual intention, objectively ascertained, as to the nature of insurance cover provided by the contract concerned and how it might be conceptually subdivided. DMS Maritime Pty Ltd v Navigators Coorp Underwriters Ltd [2020] QSC 382.