Chapter VII：Marine Insurance
Except as otherwise provided for in this Chapter, the provisions of the Insurance Law, shall apply to the marine insurance.
All rights or interests pertaining to property may expose to the perils incidental to the navigation of the sea may be the subject of a marine insurance.
A contract of maritime insurance may be extended to cover risks on land, inland rivers, lakes or any inland waterways.
Unless otherwise stipulated in the contract, the period of insurance with respects to a ship, her equipment and appurtenances shall commence from the time of the anchor of the ship is weighted or her moorings are removed, until her anchor is dropped or her moorings are set at the port of destination; whereas the period of insurance with respect to cargo shall commence from the time the cargo leave the shore until the cargo landed at the port of destination.
Unless otherwise stipulated in the contract, the insurer is liable for any damages, losses and expenses incurring to the subject of insurance caused by any accidents or calamities at sea.
In case of incurring any loss insured, it is the duty of the purchaser or assured to take such measures as may be necessary to avert or minimize a loss of the subject matter insured. The insurer shall not be liable to the purchaser or insured for any consequent losses caused by the purchaser or insured failed to perform such duty.
The insurer shall reimburse the expenses incurred by the purchaser or assured for fulfilling his duty subject to the preceding paragraph even though the total sum of the said reimbursement and the indemnity of the insurance exceed the value of the subject matter insured.
The reimbursement paid by the insurer with regards to the expenses set forth in the preceding paragraph shall not exceed the amount insured. If the amount insured is less than the value of the subject matter insured, the amount recoverable hereunder shall be ascertained in proportion of the amount insured compared to the value of the subject matter insured.
An insurer shall not be liable for the loss caused by the intentional act or gross negligence of the purchaser of the insurance or the assured or the agent of either.
If the ship in which the cargo is to be loaded has not been determined at the time of making the contract of insurance, the purchaser or insured shall, when he becomes aware that such cargo having been loaded on a ship, without delay despatch notice to the insurer of the name of the ship, the date of loading, the cargo being loaded and its value. If no such notice was despatched, the insurer would not be liable for any damages resulted therefore.
The purchaser or assured may terminate the contract when the insurer becomes bankrupt.
In the insurance of a ship, the insurable value shall be the value of the ship at the time when the liability of the insurer commences as well as the insurance premium.
In the insurance of cargo, the insurable value shall be the value of the cargo calculated at the time and place of loading, together with the expenses of loading, taxes, freight due and the insurance premium.
In the insurance of prospective profit to the commissions, remuneration and any other pecuniary benefits acquired at the arrival of the cargo, the insurable value shall be the actual amount at the time of the insurance attached.
In the insurance of freight, the insurable value shall be the aggregate of the total amount of freight payable to the carrier and the insurance premium, whereas the insurable freight shall be limited to the uncollectible fright in case if the non-delivery of the cargo.
The insurance mentioned in the preceding paragraph may include the charter hires for the ship and prospective profit to the contract of carriage.
The measure of damages to the cargo is in comparison with as the value of the cargo in its damaged condition bears to the value which it would have in a sound condition at the port of arrival.
The measure of partial loss of a ship is subject to the reasonable costs of repairs, but not exceeding the amount insured in respect of any one casualty.
The amount of indemnification for the ship with partial loss but has not been repaired, is limited to the depreciation in the market value of the ship arising from the unrepaired loss, but not exceeding the reasonable estimated cost of repairing such loss.
Where, during the period of the insurance, a partial loss, which has not been repaired is followed by a total loss, there shall not be entitled to claim for damages to the unrepaired partial damage mentioned in the preceding paragraph.
The measure of a partial loss of freight is such proportion of the amount insured as the proportion of the freight lost bears to the whole freight.
The damaged cargo could only be sold with the consent of the insurer unless there is subject to a force majeure or done by the shipmaster acting in accordance with the relevant laws and regulations. The measure of damages shall be the difference between the net proceeds of the sale and the insured value, after deducting any arising expenses that could have been saved by the sale.
Abandonment in marine insurance means an act of the assured, where incurring the cases as provided in Articles 143 to 145, transfers all the rights and interests of the subject-matter insured to the insurer and demand the full amount insured of the subject-matter insured.
In the following cases, the insured may abandon the ship insured:
1. if the ship has been captured.
2. if the ship has become unrepairable or the total repair cost exceeds the value insured.
3. if the ship is missing for more than two months;
4. if the ship has been under arrest for more than two months and not released.
The arrest mentioned in the preceding sub-paragraph 4 does not include the seizure, provisional arrest and injunction may be applied by claimant by way of a court order.
In the following cases, the insured may abandon the cargo insured:
1. The ship has become unable to navigate due to disaster or other accident for more than two months and the cargo has not yet delivered to the consignee, the purchaser of insurance or the assured.
2. if the carrying ship is missing for more than two months.
3. if the aggregated costs of restoring the damage, for which the insurer is liable to, and continuing or forwarding the cargo to their destination would exceed their value on destination.
Abandonment of freight may be effected upon the abandonment of the ship or the cargo.
Abandonment shall be effected with respects to the whole of the subject matter insured; provided that, if one of the subject-matters covered under the policy was to conform any cases of abandonment, the insured may abandon that particular subject-matter and claim its amount insured thereof.
Abandonment shall be unconditional.
Where an abandonment was valid by way of acceptance or judgment, the subject matter insured is deemed to be owned by the insurer from the date on which the cause of abandonment occurred.
The insured’s rights and interests on the subject matter insured shall not prejudice before the abandonment has been accepted.
Measures taken by the insurer or the assured with the object of saving, protecting or recovering the subject-matter insured shall not be considered as a waiver or acceptance of abandonment.
Where notice of abandonment is expressly accepted by the insurer, the abandonment is irrevocable by the parties.
The purchaser or assured shall immediately give notice to the insurer once he is aware of the occurrence of risks insured.
The insurer shall pay the insured amount within thirty days from the date of receiving the supporting documents submitted by the purchaser or the assured.
The insurer shall still pay the full insured amount even if there have any doubt on the supporting documents mentioned in the preceding paragraph and once the purchaser or assured have furnished a guarantee.
With regards to the circumstances mentioned in the preceding paragraph, the rights of the insurer to claim for a refund of the payment shall be extinguished if not duly exercised upon a lapse of one year after the payment is made.
Where the purchaser or assured failed to dispatch notice the insurer or his agent of the damage to the cargo after one month from the date of the cargo were received, the cargo shall be deemed as without loss.
The right of abandonment shall be extinguished if not duly exercised within two months counting from the date on which abandonment may be effected after the occurrence of the cause of abandonment is known.