The slides, written out
AI-drawn illustration. Simplified to explain the idea, not to scale.
Slide 1 · MARINE
MARINE
INSURANCE
FUNDAMENTALS
4 KEY PRINCIPLES EVERY
MARINER SHOULD KNOW
INSURABLE
INTEREST
WARRANTIES
UTMOST
GOOD FAITH
SUE &
LABOUR
Slide 2 · 1
1. INSURABLE INTEREST
You can only insure a marine adventure if you stand to benefit from its safety, suffer from its loss, or may incur a liability in respect of it.
WHO HAS IT?
Shipowner
Cargo Owner
Mortgagee (Bank)
Bareboat (Demise) Charterer
Time / Voyage Charterer (Freight Interest)
Person Advancing Freight
Master & Crew (via P&I Club for wages and liabilities)
MULTIPLE INTERESTS CAN EXIST
SHIPOWNER
MORTGAGEE (BANK)
CARGO OWNER
MARINE ADVENTURE
CHARTERER (FREIGHT INTEREST)
PERSON ADVANCING FREIGHT
KEY EXAM POINT
The insurable interest must exist at the time of loss (Marine Insurance Act 1906 – Section 6).
Slide 3 · 3
3. WARRANTIES & UTMOST GOOD FAITH
Marine insurance is based on promises and full disclosure of material facts that affect the risk.
WARRANTIES
UTMOST GOOD FAITH
A warranty is a promise that certain conditions exist or will be complied with.
All material facts that may influence the insurer's decision must be disclosed.
COMMON EXAMPLES
EXAMPLES OF MATERIAL FACTS
Warranty of Seaworthiness
Known vessel defects or structural weaknesses
Warranty of Legality
Dangerous or sensitive cargoes
Warranty of Neutrality
High-risk trading areas (war, piracy, sanctions)
Institute Classification Clause
Overdue vessel status
Any circumstance affecting the risk or premium
Breach of warranty (MIA 1906 Section 33) historically discharged the insurer from liability. Modern UK law may also be affected by the Insurance Act 2015.
A failure to make a fair presentation (Insurance Act 2015) may lead to reduced claim recovery.
KEY TAKEAWAY
Warranties are promises; utmost good faith is disclosure.
Both are essential for a valid and enforceable marine insurance contract.
Slide 4 · 4
4. SUE & LABOUR
The duty to take steps to avert or minimise
an insured loss – and the right to recover
the cost of taking those steps.
WHAT IS COVERED?
Emergency towing
and assistance
Temporary repairs
to prevent further loss
Cargo protection
measures
Measures taken to
safeguard life and
property
Additional fuel,
diversion expenses,
etc.
LEGAL BASIS
Marine Insurance Act 1906
– Section 78
Sue & Labour expenses are
recoverable in addition to the
sum insured, provided they are
reasonable and incurred to avert
or minimise an insured loss.
IMPORTANT DISTINCTIONS
SUE & LABOUR
Expenses to avert or minimise loss.
Recoverable in addition to
the insured value.
SALVAGE CHARGES
Reward for salvors under a
salvage contract.
Recoverable within
the insured value.
GENERAL AVERAGE
Sacrifice voluntarily made for
the common safety.
Recoverable within
the insured value.
KEY TAKEAWAY
Act promptly and reasonably to protect the property.
Reasonable mitigation costs may be recoverable in addition to the
insured loss, subject to policy terms.
Drafted by SailR from our daily lessons. AI-drawn illustration. Simplified to explain the idea, not to scale. Last updated 19 Oct 2026.
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