Modern Law of Marine Insurance Volume Five, The
CHAPTER 7
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Implied marine warranties and the Insurance Act 2015
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Early express warranties
7.2 The term “warranty”, in use in marine policies by at the latest the end of the 17th century,1 referred in its origins to three quite separate concepts. 7.3 First, a warranty could be used to secure a promise as to the truth of statements made to the underwriters by the assured (or, in the overwhelming majority of cases, his broker) in the course of the presentation of the risk. The warranty could relate to the accuracy of a statement of fact or of the assured's intentions or opinions. Warranties of this type were thought necessary in the light of the courts' view that a false statement made in pre-contractual negotiations conferred upon the underwriters the right to treat the policy as a nullity only if it was in some way material to the risk being run. By contrast, a warranty removed the need for any investigation into materiality: all that mattered was whether or not the statement was true,2 and the courts regularly urged underwriters to use warranties if they wished to avoid the inconvenience of having to prove materiality. 7.4 Second, a warranty defined the limits of the risk run by the underwriters and operated as an exclusion. The “free from average” warranty was introduced in 1749 and incorporated into the Lloyd's Ship and Goods (SG) Policy wording formally adopted by the London market in 1789. By that provisionPage 147
corn and fish are warranted free from average, unless general, or the ship stranded: sugar, tobacco, and some other specific goods, free from average, under 5 per cent. (and all other goods, under 3 per cent) unless general, or the ship be stranded.3