Marine warranties, voyage, deviation and perils of the sea

1. Warranties: meaning and effect

Section 35(1) defines a warranty as a promissory warranty: an undertaking by the assured that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or an affirmation or negation of a particular state of facts. Rules:

• A warranty may be express or implied (s.35(2)).
• It is a condition that must be exactly complied with, whether it be material to the risk or not. If not complied with, the insurer is discharged from liability as from the date of breach, without prejudice to liability incurred before (s.35(3)). In De Hahn v. Hartley (1786) a warranty that the ship would sail with fifty hands was broken when she sailed with forty-six, though she took on the rest soon after; the insurer was discharged.
• Breach is excused where, by change of circumstances, the warranty ceases to apply, or compliance becomes unlawful by a later law (s.36(1)).
• Remedying the breach before loss is no defence (s.36(2)), but the insurer may waive the breach (s.36(3)).

A warranty differs from a representation: a representation need only be substantially true and avoids the contract only if material (s.22); a warranty must be literally true or performed.

2. Kinds of warranties

Express warranties (s.37) may be in any form of words from which the intention to warrant is inferred, must be in or written on the policy or a document incorporated by reference, and do not exclude implied warranties unless inconsistent. Common express warranties:

• Warranty of neutrality (s.38): the property shall have a neutral character at the start and, so far as the assured can control, throughout; a ship warranted neutral must carry proper papers.
• Warranty of good safety (s.40): if the subject matter is warranted “well” or “in good safety” on a day, it is enough that it is safe at any time that day.
• Trading limits (the ship will not go beyond named waters), sailing dates, nature of cargo, towage, class of ship, and “free of capture and seizure”.

Implied warranties, which arise by law:

• Seaworthiness (s.41). In a voyage policy, the ship shall be seaworthy at the commencement of the voyage for the purpose of the adventure; if the policy attaches in port, she must be reasonably fit to meet the ordinary perils of the port; where the voyage is in stages, seaworthy at the start of each stage. A ship is seaworthy when reasonably fit in all respects to encounter the ordinary perils of the seas of the adventure (s.41(4)). In a time policy there is no such warranty, but the insurer is not liable for loss attributable to unseaworthiness where the ship was sent to sea unseaworthy with the privity of the assured (s.41(5)).
• Cargo-worthiness (s.42). No warranty that the goods are seaworthy, but in a voyage policy on goods the ship must be seaworthy as a ship and reasonably fit to carry the goods.
• Legality (s.43). The adventure insured is lawful and, so far as the assured can control, shall be carried out in a lawful manner. This cannot be waived, because a court will not enforce a contract to cover an illegal venture.
• There is no implied warranty of nationality (s.39).

3. The voyage: commencement, change of voyage, deviation and delay

• Commencement (s.44). Under an “at and from” or “from” policy, there is an implied condition that the adventure will be commenced within a reasonable time, failing which the insurer may avoid.
• Wrong port of departure or destination (ss.45, 46). If the ship sails from a different place, or for a different destination, the risk never attaches.
• Change of voyage (s.47). Where, after the risk has begun, the destination is voluntarily changed, the insurer is discharged from the time the determination to change is manifested, even if the ship has not yet left the course when the loss occurs.
• Deviation (s.48). Where the ship, without lawful excuse, departs from the course specifically designated by the policy, or, if none is designated, from the usual and customary course, the insurer is discharged from the time of deviation; it is immaterial that she regained her route before the loss. The intention to deviate is immaterial: there must be a deviation in fact.
• Several ports of discharge (s.49). They must be visited in the order designated, or, if unnamed, in geographical order; otherwise there is deviation.
• Delay (s.50). In a voyage policy the adventure must be prosecuted with reasonable dispatch; unreasonable delay without lawful excuse discharges the insurer from the time it became unreasonable.

Change of voyage and deviation contrasted. In a change of voyage the destination is changed; in deviation the destination remains the same but the route is departed from. Change of voyage operates from the moment the decision is manifested; deviation only from the moment of actual departure from the course.

When deviation or delay is excused (s.51(1)):

• (a) where authorised by a special term in the policy (a liberty clause);
• (b) where caused by circumstances beyond the control of the master and his employer;
• (c) where reasonably necessary to comply with an express or implied warranty;
• (d) where reasonably necessary for the safety of the ship or subject matter;
• (e) for saving human life, or aiding a ship in distress where human life may be in danger;
• (f) where reasonably necessary to obtain medical or surgical aid for anyone on board;
• (g) where caused by barratry of the master or crew, if barratry is insured.

When the excusing cause ends, the ship must resume her course with reasonable dispatch (s.51(2)). Deviation to save property only is not excused: in Scaramanga v. Stamp (1880) a ship that deviated to tow a disabled vessel for reward, when the crew could have been saved without towing, was held to have deviated without excuse.

4. Perils of the sea and other insured perils

Rule 7 of the Schedule: “perils of the seas” refers only to fortuitous accidents or casualties of the seas; it does not include the ordinary action of the winds and waves. Examples: stranding, sinking, collision, heavy weather beyond the ordinary, striking a submerged object, entry of sea water through an accidental hole.

• Hamilton, Fraser & Co. v. Pandorf & Co. (1887, House of Lords): rats gnawed a pipe on board, sea water entered and damaged a cargo of rice. Held, a loss by perils of the sea: the entry of sea water was fortuitous.
• Samuel v. Dumas (1924, House of Lords): a ship deliberately scuttled by her owners is not lost by a peril of the sea, because there is nothing fortuitous about it.
• Ordinary wear and tear, leakage, inherent vice and loss caused by rats or vermin as such are excluded (s.55(2)(c)); so is loss proximately caused by delay (s.55(2)(b)).

Other perils named in the policy and explained in the Schedule: pirates (including passengers who mutiny and rioters attacking from shore, Rule 8); thieves (not clandestine theft or theft by the ship’s company, Rule 9); restraint of princes (political or executive acts, not riot or ordinary judicial process, Rule 10); barratry (every wrongful act wilfully committed by the master or crew to the prejudice of the owner or charterer, Rule 11); all other perils (only perils similar in kind to those named, Rule 12).

5. The Inchmaree clause (short note)

In Thames and Mersey Marine Insurance Co. v. Hamilton, Fraser & Co. (1887), the ship Inchmaree was damaged when a valve was negligently left closed and a donkey engine pumping water into her boilers burst. The House of Lords held this was not a peril of the sea nor a peril “of the like kind”: it had nothing to do with the sea. To fill the gap, underwriters introduced the Inchmaree clause, now the additional perils clause of hull policies, covering loss or damage caused by bursting of boilers, breakage of shafts, latent defects in machinery or hull, and negligence of master, officers, crew or repairers, provided the loss has not resulted from want of due diligence by the assured, owners or managers. It extends hull cover beyond the narrow meaning of perils of the sea.

6. Problem

A ship belonging to India is captured in England for smuggling activities. Is the insurer liable for the loss of the ship? (January 2026)

Issue. Whether seizure of the ship by a foreign State for smuggling is a loss by an insured peril, and whether the illegality bars the claim.

Law. There is an implied warranty that the adventure is lawful and, so far as the assured can control, carried out lawfully (s.43). The insurer is not liable for loss attributable to the wilful misconduct of the assured (s.55(2)(a)). “Restraint of princes” does not include loss by ordinary judicial process (Rule 10), and hull policies usually carry a “free of capture and seizure” exclusion unless war and strike risks are bought. Barratry, if insured, covers wrongful acts of the master or crew against the owner (Rule 11).

Application. If the owner was party to the smuggling, the adventure was being carried out unlawfully within his control: the warranty of legality is broken and the insurer is discharged; the loss is also due to his wilful misconduct. Seizure by customs authorities and confiscation through legal process is not a “restraint of princes” in the sense of the policy, and in any case is commonly excluded by the capture and seizure clause. If, however, the master and crew smuggled without the owner’s knowledge, the owner has not broken a warranty he could control, and the seizure may be a loss by barratry, recoverable if barratry is an insured peril.

Conclusion. Ordinarily the insurer is not liable. It is liable only if the smuggling was the crew’s own wrongful act against the owner and barratry is covered.

How this is examined

“What is warranty? Explain the different kinds of warranties in marine insurance” (January 2026, February 2025): sections 1 and 2. “What is deviation? When is deviation permitted?” (February 2025) and “Discuss change of voyage and deviation” (June 2025): section 3. Short notes: “Perils of the sea” (January 2026, February 2025) and the “Inchmaree clause” (June 2025). The smuggling problem (January 2026) is solved above.