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Insurance Law Implications of Delay in Maritime Transport


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CHAPTER 1

Introduction to delay as a risk and fortuity considerations

Introduction

1.1 The occurrence of delay or some loss of time is frequent in maritime transport. This emanates firstly from the fact that many incidents may result in delay, such as including but not limited to perils of the seas, strikes, collisions, detentions, port congestions or health condition of crew members. Secondly, modern speed of transport requires either timely prosecution of marine adventures where a specific time frame is agreed, or failing this, their prosecution in reasonable time. All these circumstances as well as a mere loss of time upon the voyage insured may result in various types of losses and expenses that may be incurred by several parties such as shipowners, voyage and time charterers, cargo interests and project owners whose projects depend upon the timely arrival of goods carried by sea. These losses may be recoverable from the parties who are liable for delay under individual contracts, or depending upon the terms of the contracts, may have to be borne by the parties themselves who incur the losses. The relevant interests of the parties which can be affected by these losses or expenses can also be insurable under several types of marine insurance policies such as cargo, hull and machinery, freight, loss of hire and marine delay in start-up insurance. 1.2 Losses arising from delay have traditionally been excluded under cargo, hull and machinery and freight policies under the Common law. The exclusion of delay losses in cargo policies was due to an analogy with inherent vice and naturally occurring losses. This approach was then embodied in s 55(2)(b) of the MIA 1906 in respect of cargo and hull and machinery policies which provides that:

‘Unless the policy otherwise provides, the insurer on ship or goods is not liable for any loss proximately caused by delay, although the delay be caused by a peril insured against’.

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