CONTRACT OF INSURANCE AND RULES FOR CONSTRUCTION OF POLICY

CONTRACT OF INSURANCE AND RULES FOR CONSTRUCTION OF POLICY:-

Contract of Insurance: Classification of contract of Insurance Nature of various Insurance
Contracts- Parties there to- Principles of good faith – non disclosure – Misrepresentation in
Insurance Contract- Insurable Interest- Premium: Definition- method of payment, days of
grace, forfeiture, return of premium, Mortality; The risk – Meaning and scope of risk, Causa  
Proxima, Assignment of the subject matter.

The following are the rules referred to by this Act for the construction of a policy in
the above or other like form, where the context does not otherwise require: —  
 

1. Lost and not lost. — Where the subject-matter is insured “lost or not lost” and the loss has
occurred before the contract is concluded, the risk attaches unless, at such time the assured
was aware of the loss, and the insurer was not.  
 

2. From. — Where the subject-matter is insured “from” a particular place, the risk does not
attach until the ship starts on the voyage insured.  
 

3. At and from. — 

(a) Where a ship is insured “at and from” a particular place, and she is at
that place in good safety when the contract is concluded, the risk attaches immediately.  
(b) If she be not at that place when the contract is concluded, the risk attaches as soon as she
arrives there in good safety, and, unless the policy otherwise provides, it is immaterial that
she is covered by another policy for a specified time after arrival.  
(c) Where chartered freight is insured “at and from” a particular place, and the ship is at that
place in good safety when the contract is concluded, the risk attaches immediately. If she be
not there when the contract is concluded, the risk attaches as soon as she arrives there in good
safety.  
(d) Where freight, other than chartered freight, is payable without special conditions and is
insured “at and from” a particular place, the risk attaches pro rata as the goods or
merchandise are shipped; provided that if there be cargo in readiness which belongs to the
ship-owner, or which some other person has contracted with him to ship, the risk attaches as
soon as the ship is ready to receive such cargo.  
 

4. From the loading thereof. — Where goods or other movables are insured “from the
loading thereof”, the risk does not attach until such goods or movables are actually on board,
and the insurer is not liable for them while in transit from the shore to the ship.  
 

5. Safely landed. — Where the risk on goods or other movables continues until they are
“safely
landed”, they must be landed in the customary manner and within a reasonable time after
arrival at the
port of discharge, and if they are not so landed the risk ceases.  
 

6. Touch and stay.—In the absence of any further license or usage, the liberty to touch and
stay “at any port or place whatsoever” does not authorise the ship to depart from the course of
her voyage from the port of departure to the port of destination.  
 

7. Perils of the seas. — The term “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.  
 

8. Pirates. — The term “pirates” includes passengers who mutiny and rioters who attack the
ship from the shore.  
 

9. Thieves. — The term “thieves” does not cover clandestine theft or a theft committed by
any one of the ship’s company, whether crew or passengers.  
 

10. Restraint of Princes. — The term “arrests, etc., of kings, princes, and people” refers to
political or executive acts, and does not include a loss caused by riot or by ordinary judicial
process.  
11. Barratry. — The term “barratry” includes every wrongful act wilfully committed by the
master of crew to the prejudice of the owner, or, as the case may be, the charterer.  
 

12. All other perils. — The term “all other perils” includes only perils similar in kind to the
perils specifically mentioned in the policy.  
 

13. Average unless general. — The term “average unless general” means a partial loss of the
subject-matter insured other than a general average loss, and does not include “particular
charges”.  
 

14. Stranded. — Where the ship has stranded, the insurer is liable for the excepted losses
although the loss is not attributable to the stranding, provided that when the standing takes
place the risk has attached and, if the policy be on goods, that the damaged goods are on
board.  
 

15. Ship. — The term “ship” includes the hull, material and outfit, stores and provisions for
the
officers and crew, and, in the case of vessels engaged in a special trade, the ordinary fittings
requisite for the trade, and also, in the case of a steamship, the machinery, boilers, and coals
and engine stores, if owned by the assured and also in the case of a ship driven by power
other than steam, the machinery and fuels and engine stores, if owned by the assured.  
 

16. Freight. — The term “freight” includes the profit derivable by a ship-owner from the
employment of his ship to carry his own goods or movables as well as freight payable by a
third party, but does not
include passage money.  
 

17. Goods. — The term “goods” means goods in the nature of merchandise, and does not
include personal effects or provisions and stores for use on board.  In the absence of any
usage to the contrary, deck cargo and living animals must be insured specifically, and not
under the general denomination of goods.