Question

An assured contests an indemnity claim of $15,000.00 for losses suffered under a
Marine Insurance policy, which the underwriter declines on the defense that he (the
insurer) had avoided the contract as a result of a breach of warranty on the part of the
insured. The adjudication established and upheld the avoidance against the insured.
Investigation however revealed that 65% of the loss occurred prior to the ascertained
breach of warranty.
i. Determine whether or not the insured has a recoverable claim.
ii. If yes, what is the measure of the indemnity?
iii. Support your answer with the relevant marine insurance principle.

Answer 1

1. Yes, the insured has a recoverable claim but not 100% because, according to the policy, the insurance company will give only 65% of the insurance.

2. The measure of the indemnity that is the insurable value, or we can say the invoice value will be $15,000.00 * 65/100 = $9,750.

3. The basic concept of Marine Insurance is taken from the Marine Insurance Act, 1963. As in all agreement of insurance on the property, the agreement of Marine Insurance is dependent on the basic concept of Indemnity, Utmost Good Faith, Insurable Interest, Proximate Cause, Subrogation, and Contribution. It positively can retrieve in respect of a loss the “estimate of insurance.” In the case of a worth policy, the estimate of insurance is the worth specific by the policy, which, in broad terms, is the amount admit with the insurers. The claim in the insurance is analyzed officially as a claim for expected (unascertained) harm coming speedily on the matter of the loss or harm to the cargo.

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