Insurance Law Implications of Delay in Maritime Transport
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CHAPTER 7
Hull and machinery insurance and delay considerations
Introduction
7.1 The MIA 1906 provides that an insurer of a ship is not liable for any loss proximately caused by delay, although the delay is caused by a peril insured against.1 The common law origin of the provision goes back to Shelbourne v Law 2 where it was held that loss of earnings due to detention and delay of a vessel during repairs necessitated by a collision are not recoverable under a hull and machinery policy. The origin was therefore with respect to the exclusion of this type of consequential losses arising from delay from the scope of hull and machinery policies. In Phoenix Shipping Co v Apex Shipping Corp 3 it was enunciated:‘It is clear beyond doubt that an insurance on a subject matter, whether described as ‘hull and machinery’ or ‘ship’ or ‘vessel’ does not indemnify the assured against loss of earnings, or wasted expenditure during periods of delay.’4