Report No. 21

Rules for Construction of Policy

The following are the rules referred to by this Act for the construction of a policy in the above or other like form, where the context does not otherwise require:

1. Lost or not lost.- Where the subject-matter is insured "Lost or not lost", and the loss has occurred before the contract is concluded, the risk attaches unless, at such time, the assured was aware of the loss, and the insurer was not.

2. From.- Where the subject-matter is insured "from" a particular place, the risk does not attach until the ship starts on the voyage insured.

3. As and from Ship.- (a) Where a ship is insured "at and from" a particular place, and she is at that place in good safety when the contract is concluded, the risk attaches immediately.

(b) If she be not at that place when the contract is concluded, the risk attaches as soon as she arrives there in good safety, and, unless the policy otherwise provides, it is immaterial that she is covered by another policy for a specified time after arrival.

(c) Freight.-Where chartered freight is insured "at and from" a particular place, and the ship is at that place in good safety when the contract is concluded, the risk attaches immediately. If she be not there when the contract is concluded, the risk attaches as soon as she arrives there in good safety.

(d) Where freight, other than chartered freight, is payable without special conditions and is insured "at and from" a particular place, the risk attaches pro rata as the goods or merchandise are shipped:

Provided that if there be cargo in readiness which belongs to the ship owner, or which some other person has contracted with him to ship, the risk attaches as soon as the ship is ready to receive such cargo.

4. From the loading thereof.- Where goods or other movables are insured "from the loading thereof", the risk does not attach until such goods or movables are actually on board, and the insurer is not liable for them while in transit from the shore to the ship.

5. Safely landed.- Where the risk on goods or other movables continues until they are "safely landed", they must be landed in the customary manner and within a reasonable time after arrival at the port of discharge, and if they are not so landed the risk ceases.

6. Touch and stay.- In the absence of any further license or usage, the liberty to touch and stay "at any port or place whatsoever" does not authorise the ship to depart from the course of her voyage from the port of departure to the port of destination.

7. Perils of the seas.- The term "perils of the seas" refers only to fortuitous accidents or casualties of the seas. It does not include the ordinary action of the winds and waves.

8. Pirates.- The term "pirates" includes passengers who mutiny and rioters who attack the ship from the shore.

9. Thieves.- The term "thieves" does not cover clandestine theft or theft committed by any one of the ship's company, whether crew or passengers.

10. Restraints of princes.-- The term "arrests, &c., of kings, princes and people" refers to political or executive acts, and does not include & loss caused by riot of by ordinary judicial process.

11. Barratry.- The term "barratry" includes every wrongful act wilfully committed by the master or crew to the prejudice of the owner, or, as the case may be, the charterer.

12. All other perils.- The term "all other perils" includes only perils similar in kind to the perils specifically mentioned in the policy.

13. Average unless general.- The term "average unless general" means a partial loss of the subject-matter insured other than a general average loss, and does not include "particular charges".

14. Stranded.-- Where the ship has stranded, the insurer is liable for the excepted losses, although the loss is not attributable to the stranding, provided that when the stranding takes place the risk has attached and, if the policy be on goods, that the damaged goods are on board.

15. Ship.- The term "ship" includes the hull, materials and outfit, stores and provisions for the officers and crew, and, in the case of vessels engaged in a special trade, the ordinary fittings requisite for the trade, and also, in the case of a steamship, the machinery, boilers, and coals and engine stores, if owned by the assured, and also, in the case of a ship driven by power other than steam, the machinery and fuels and engine stores, if owned by the assured.

16. Freight.- The term "freight" includes the profit derivable by a ship owner from the employment of his ship to carry his own goods or movable as well as freight payable by a third party, but does not include passage money.

17. Goods.- The term "goods" means goods in the nature of merchandise, and does not include personal effects or provisions and stores for use on board.

In the absence of any usage to the contrary, deck cargo and living animals must be insured specifically, and not under the general denomination of goods.

Explanation of abbreviations used in Notes on Clauses:-

Chalmers Dover or	Chalmers, Marine Insurance, 1956 edition
Dover, Handbook.	Dover, Handbook to Marine Insurance, Fifth edition (1957)
Keate	Keate, Guide to Marine Insurance Twelfth Edition (1958).