Premium warranty—Marine Insurance Act 1906, s 53(1)

Having honoured a constructive total loss claim, the claimant insurer sought to recover on a reinsurance policy. At first instance, the reinsurer denied liability on the basis that there had never been a concluded contract of reinsurance; alternatively, any such contract was subject to a premium warranty that had been broken, triggering an automatic termination of cover before the casualty. HHJ Chambers held in favour of the insurer. A contract of reinsurance had been concluded, and on terms such that non-payment of premium merely gave rise to a right to serve a notice of cancellation, which had never been done. The reinsurer appealed solely on the ground that no contract had been concluded. It argued that the insurer’s slip, containing the offer of cover, erroneously omitted an IACS classification warranty and the warranty could not be read into it. However, its response should be construed as referring back to a previous communication containing a quotation on the basis of terms expressly including the warranty. There was therefore no agreement on a fundamental clause.