INSURANCE LAW
UNIT 6- VOYAGE CHANGE OF VOYAGE, DEVIATION PERILS OF SEA
SYNOPSIS
Introduction
Voyage policy
How voyage policy works
Risks covered in voyage policy
Principle of Deviation
Voluntary departure
Unjustified deviation
The effect of deviation
INTRODUCTION
According to the Indian Marine Insurance Act 1963, voyage policy is a
type of marine insurance policy that provides coverage for losses due to
unforeseen risks to cargo during a specific voyage.
The doctrine of deviation is a long-standing feature of English maritime
law. Deviation, in this context, means the voluntary and unjustified
departure of a ship from her agreed route.
In the law of carriage of goods by sea, deviation is treated as a breach of
contract which has special consequences.
VOYAGE POLICY
“A voyage policy is marine insurance coverage for risks to a ship’s cargo
during a specific voyage.”
A voyage policy is a marine insurance policy, that provides coverage due
to unforeseen risks to cargo that is being transported by ship.
The policy covers damage caused by, for example, earthquake, lightning,
fire, and collision.
It won’t cover losses or damage that occured as the result of a terrorist
attack, war, or nuclear fusion. We also call it marine cargo insurance.
The term ‘cargo’ refers to goods or produce that are transported by sea,
land, or air.
Voyage policies, which protect just the goods in transit and not the vessel,
are important for businesses involved in international trade.
HOW VOYAGE POLICIES WORK
Any insurance policy is designed to indemnify the insured against risks of
damage to property, the environment, or human life in the event of a natural
calamity, accident, theft, etc. A voyage involves the following high-stake risks:
1. Damage to valuable cargo or the expensive ship
2. Damage to the environment due to leakage of oil
3. Loss of life or harm to the captain and crew
To safeguard against the risk of damage to cargo, a voyage policy is taken
before the inception of a voyage. It is valid for that particular voyage and ends
when the cargo arrives at its destination. It doesn’t cover the port stay and
loading/ unloading of cargo.
The policy contract contains complete details of the risk, along with information
about the bill of lading, name of the vessel, etc. As a voyage policy protects
only the cargo in transit and not the ship, it is mostly taken by cargo owners
involved in international trade.
WHAT RISKS ARE COVERED?
A voyage policy covers only unforeseeable and unpreventable risks. At the
beginning of the voyage, the ship must be seaworthy for that transit for the
policy to uphold.
It is considered seaworthy when it is fit to encounter the ordinary perils of the
seas in the transit. In addition, the ship’s crew must be reasonably competent.
The policy covers the cargo during the whole voyage by sea, even if there are
delays en route. It is feasible to extend it to include extra cover against perils
like a strike, riot, civil commotion, etc.
PRINCIPLE OF DEVIATION
When a ship intentionally changes her route or remains in port without just
cause, the ship’s new route or delay is called a deviation.
Unless the contract permitted otherwise, in either case there is a breach of
contract by the party responsible for the deviation.
In the law of carriage of goods by sea, deviation has special penalty. From the
minute this happens, the voyage is altered, the contract determined, and the
insurer discharged from later responsibilities.
By the contract, the insurer only runs the risk of the contract agreed upon, and
no other and it is, therefore, a situation understood in the policy, that the ship
shall continue to her port of destination by the shortest, direct and safest route,
and on no account to depart from that route, but in cases of urgent and critical
situation.
VOLUNTARY DEPARTURE
In case the ship changes the route under free will, deviation has occurred.
But there are cases in which deviation is not regarded as unreasonable, such as
exceptional circumstances that cannot be controlled by the captain and the
ship’s crew;
deviations from the route due to the need to save human lives at risk due to an
accident, to avoid or reduce maritime pollution due to an accident, to disembark
diseased crew or passengers, or in general for reasons that obey any security
need on board the ship.
UNJUSTIFIABLE DEVIATION
For example: It may be possible to deviate in order to prosecute the voyage with
safety. A master is always under a duty to use reasonable care to ensure the
success of the voyage, by protecting his ship and cargo from avoidable risks. In
some circumstances, there may even be an obligation on the shipowner to
deviate in order to protect the cargo interests. Deviation in order to save human
life is always justified, but no to save property, unless this is expressly provided
for in the charterparty.
In Leduc v Ward the carriage contract permitted the shipowners “Liberty to call
at any port in any order”. The ship loaded a cargo at Fiume for carriage to
Dunkirk. She deviated via Glasgow instead of proceeding directly to Dunkirk,
which added some 1000 miles to the voyage. The court held that the deviation
to Glasgow was unjustifiable.
An unjustified deviation would result in the carriage contract being suspended.
However, if after the unjustified deviation occurred, the cargo owner instructs
the carrier to proceed to the customary route to perform the dead, contract, the
carrier is entitled to rely on exemption clauses contained in the contract which
has been brought to life by the cargo owner’s instructions.
EFFECTS OF DEVIATION
At the time of deviation, the voyage is altered. Thus, the marine insurer is free
from its responsibilities.
The marine insurance contract requires the insurance company to make payment
only if it follows the stated port route. In case of any deviation, the insurer can
refuse to settle the loss or damage.
A breach of contract occurs when any unjustified and voluntary deviation
happens.
In such a case, the insurance company has the right to terminate the policy.
If it would do so, the policyholder would also lose the benefit of immunity in
the insurance contract. Thus, it would have to bear all losses or
damages on its own.