Last amended by Insurance Act 2015 in 2015. Replaced the duty of disclosure (s.18) with the duty of fair presentation for non-consumer contracts; modified the remedy for breach of utmost good faith (s.17).
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
The Marine Insurance Act 1906 codified the common law of marine insurance as it had developed over centuries, principally through Lloyd's of London. Although directed at marine risks, its principles — particularly the duty of utmost good faith (uberrimae fidei), insurable interest, warranties, and subrogation — historically governed all types of insurance contract until reformed by the Insurance Act 2015 and the Consumer Insurance (Disclosure and Representations) Act 2012.
Key Points
- Defines a contract of marine insurance (s.1)
- Requires insurable interest (ss.4–15)
- Duty of utmost good faith (s.17) — now modified by Insurance Act 2015
- Disclosure obligations (s.18) — largely replaced for non-consumer contracts
- Warranties must be exactly complied with (s.33) — now modified by Insurance Act 2015
- Measure of indemnity and total/partial loss (ss.67–78)
- Subrogation rights of the insurer (s.79)
- Defines marine insurance as covering losses incident to marine adventure (s.1-3)
- Establishes requirement of insurable interest (s.4-15)
- Codifies duty of utmost good faith (uberrima fides) (s.17) — now modified by Insurance Act 2015
- Sets out rules on warranties and their breach (s.33-41)
- Provides for partial and total loss, actual and constructive (s.56-63)
- Establishes subrogation rights and contribution between insurers (s.79-80)
- Contract of marine insurance defined — insurer indemnifies assured against marine losses (s.1)
- Insurable interest required (ss.5-14)
- Utmost good faith (uberrima fides) — duty of disclosure of material facts (s.17-20) — modified by Insurance Act 2015 for non-consumer
- Warranties — must be exactly complied with; breach automatically discharges insurer (modified by Insurance Act 2015)
- Types of loss: total loss (actual and constructive), partial loss, general average
- Subrogation — insurer steps into shoes of assured after payment (s.79)
Parts & Sections
Amendments History
2012 — Consumer Insurance (Disclosure and Representations) Act 2012
Removed consumer insurance contracts from the 1906 Act's disclosure regime.
2015 — Insurance Act 2015
Replaced the duty of disclosure (s.18) with the duty of fair presentation for non-consumer contracts; modified the remedy for breach of utmost good faith (s.17).
2015 — Insurance Act 2015
Modified the duty of disclosure and the remedies for breach of the duty of fair presentation, replacing the harsh 'avoidance' remedy with proportionate remedies.
2015 — Insurance Act 2015
Reformed duty of disclosure (replacing duty of utmost good faith for non-consumer insurance) and warranties.
Frequently asked questions
- What is the purpose of the Marine Insurance Act 1906?
- The Marine Insurance Act 1906 codified the common law of marine insurance, which had developed over centuries, principally through Lloyd's of London. While specifically directed at marine risks, its principles historically governed all types of insurance contracts until they were reformed by later legislation, including the Insurance Act 2015 and the Consumer Insurance (Disclosure and Representations) Act 2012.
- How does the Act define a contract of marine insurance?
- A contract of marine insurance is defined as an agreement where the insurer undertakes to indemnify the assured against marine losses. This indemnity is provided in the manner and to the extent agreed upon in the contract. The Act specifically covers losses that are incident to a marine adventure.
- What is the duty of utmost good faith in marine insurance?
- The Act establishes that marine insurance contracts are based on the duty of utmost good faith, known as uberrimae fidei. If this duty is not observed by either party, the other party may avoid the contract. However, this duty has been modified for non-consumer contracts by the Insurance Act 2015, which replaced the strict disclosure duty with a duty of fair presentation.
- What happens if a warranty in a marine insurance policy is breached?
- Under the original provisions of the Act, warranties in a marine insurance contract had to be exactly complied with. A breach of a warranty automatically discharged the insurer from liability. These strict rules have since been modified by the Insurance Act 2015, which introduced more proportionate remedies for breaches rather than automatic discharge.
- What are subrogation rights in the context of marine insurance?
- Subrogation allows the insurer to step into the shoes of the assured after making a payment for a loss. This means the insurer acquires the rights of the assured to recover the loss from any third party responsible. The Act also provides for contribution between insurers in certain circumstances.