JEE PRINCESS C.
CORTEZ INSURANCE
MARINE INSURANCE
A. CONCEALMENT
The rules are stricter than an ordinary insurance because the vessels
insured are often absent or afloat, hence, the insurer cannot easily
obtain information regarding the property insured.
Sec. 110. Information of the belief or expectation of a third
person, in reference to a material fact, is material.
PRESUMPTION
Sec. 111. A person insured by a contract of marine insurance is
presumed to have knowledge, at the time of insuring, of a prior
loss, if the information might possibly have reached him in the
usual mode of transmission and at the usual rate of
communication.
NOTE: This presumption is rebuttable.
Sec. 112. A concealment in a marine insurance, in respect to any
of the following matters, does not vitiate the entire contract, but
merely exonerates the insurer from a loss resulting from the risk
concealed:
a. The national character of the insured;
b. The liability of the thing insured to capture and
detention;
c. The liability to seizure from breach of foreign laws of
trade;
d.
a. The want of necessary documents; and
e. The use of false and simulated papers.
B.REPRESENTATION
In marine insurance, the materiality of the facts represented is
determined by the same rules that apply to concealment.
Representation is material if it will affect the decision of the insurer to
take the risk or to fix the premium and other terms and conditions of
the policy.
Only factual representations are covered by the rules on
representation. Expectations of the insured are not material unless it
will amount to a promissory representation (Aquino).
Sec. 114. The eventual falsity of a representation as to
expectation does not, in the absence of fraud, avoid a contract of
marine insurance.
BAR (2011): Shipowner X, in applying for a marine insurance
policy from ABC, Co., stated that his vessel usually sails middle
of August and with normally 100 tons of cargo. It turned out later
that the vessel departed on the first week of September and with
only 10 tons of cargo. Will this avoid the policy that was issued?
a. Yes, because there was breach of implied warranty.
b. No, because there was no intent to breach an implied
warranty.
c. Yes, because it relates to a material representation.
d. No, because there was only representation of intention.
SUGGESTED ANSWER:
d. No, because there was only representation of intention.
C. IMPLIED WARRANTIES
BAR (2000): What warranties are implied in marine insurance?
SUGGESTED ANSWER:
1. That the ship is seaworthy to make the voyage and/or to take
in certain cargoes;
Sec. 116. A ship is seaworthy when reasonably fit to perform the
service and to encounter the ordinary perils of the voyage
contemplated by the parties to the policy.
LlB 3A
The warranty of seaworthiness may be waived if the insurer paid the
insured of the value of the lost cargoes, but the insurer can still raise
the fact that the vessel is seaworthy in the exercise of its right of
subrogation against the party who is at fault.
Generally, it is only the commencement of the voyage that is the
reckoning point to determine if the implied warranty of seaworthiness
was complied with (Aquino).
SEC. 120. When the ship becomes unseaworthy during the
voyage to which an insurance relates, an unreasonable delay in
repairing the defect exonerates the insurer on ship or shipowner’s
2. That the ship shall not deviate from the voyage insured;
interest from liability from any loss arising therefrom.
2. That the ship shall not deviate from the voyage insured;
3. That the ship shall carry the necessary documents to show
nationality or neutrality and that it will not carry document which
will cast reasonable suspicion thereon;
It is the presence of documents and the absence of documents that
will cast suspicion that are impliedly warranted. However, implied
warranties flow from the express warranty of neutrality or nationality
(Aquino).
4. That the ship shall not carry contraband, especially if it is
making voyage through belligerent waters.
If an integral voyage is illegal in any respect at its commencement,
no insurance can legally be effected on any part of it, though such
part, taken itself, would be legal (Aquino).
D. VOYAGE AND DEVIATION
The course of the voyage shall be determined in the following order:
1. the course agreed upon by the parties;
2. if nothing was agreed upon, one which conforms to the
course of sailing fixed by mercantile usage;
3. if there is no mercantile usage, one which a master of
ordinary skill and discretion would find to be the most
natural, direct and advantageous (Sec. 123 and 124).
Sec. 126. A deviation is proper:
a. When caused by circumstances over which neither the
master nor the owner of the ship has any control;
b. When necessary to comply with a warranty, or to avoid
a peril, whether or not the peril is insured against;
c. When made in good faith, and upon reasonable
grounds of belief in its necessity to avoid a peril; or
d. When made in good faith, for the purpose of saving
human life or relieving another vessel in distress.
Sec. 128. An insurer is not liable for any loss happening to the
thing insured subsequent to an improper deviation.
BAR (2005): On a clear weather, MV Sundo, carrying insured
cargo, left the port of Manila bound for Cebu. While at sea, the
vessel encountered a strong typhoon forcing the captain to steer
the vessel to the nearest island where it stayed for 7 days. The
vessel ran out of provisions for its passengers. Consequently, the
vessel proceeded to Leyte to replenish its supplies.
a) Assuming that the cargo was damaged because of
such deviation, who between the insurance company
and the owner of the cargo bears the loss? Explain.
SUGGESTED ANSWER: The insurance company should bear the
loss. In the case at bar, the strong typhoon was a circumstance
beyond the control of the captain and the deviation was necessary to
avoid a peril, whether or not insured against. Hence, the deviation
was proper.
SOURCE:
 Aquino, Timoteo B. (2014) The Essentials of Insurance
Law, pg. 258-268.
 RA 10607 Insurance Code of the Philippines, Sec. 109-128