The Marine Insurance Act of 1906 - Essay Example

Section 3 (2) a of MIA 1906, identifies a marine adventure as any ship, goods, or movables which are exposed to marine or maritime perils.

In the case, Miles insured ms Flora against any perils during the voyage through the Grose & Co. brokers who effected the deal at 2 million US dollars on the terms of the Time Clauses Hulls (1983). The contract was for 12 months which covered the ship’s voyage from Lisbon to Plymouth and was aimed to protect Miles, the assured, against any perils that may occur during this voyage. Based on section 3(2) a of MIA 1906 there was a marine adventure during the time of ms Flora’s voyage from Lisbon to Plymouth.

The insurer is hereby obligated to cover any losses to the ship incurred during the voyage at this as agreed in the insurance contract defined in section 1 of the MIA 1906. The contract meets the definition of marine insurance in section 1 of MIA 1906 and marine adventure in section 3 (2) of MIA 1906 and thereby the insurer is obligated to honor the contract in case of any losses. About section 5 (1) of MIA 1906, every person who is interested in a marine sail or adventure has an insurable interest.

Additionally, section 5 (2) of the MIA 1906 provides that if an individual is interested in a maritime adventure in which he stands any legal relation to the specific adventure or to an insurable property that is exposed to a risk therein, in which consequence, he can benefit through due arrival or safety of the insurable property, or can be prejudiced by its damage, liability, detention or incur losses in respect thereof. Consequently, Miles as the owner of the ms Flora has a valid insurable interest to indemnify the ship against any risks or perils during the time of its voyage, in this case from Plymouth to Lisbon.

Section 4 (1) of MIA 1906 details that any maritime insurance through gaming or wagering is void. Section 4 (2) a of MIA 1906 explains that every contract in marine insurance through gaming or wagering occurs where the insured does not have an insurable interest as outlined by the act and where the contract is agreed with no anticipations of acquiring such interest. According to Section 4 (2) b of MIA 1906 gaming and wagering may also occur when the policy is made with interest or no interest or with no further proof of the policy or still without any salvage benefits to the insuring company.

Provided there is no salvage possibility, a policy can be effected without salvage benefits to the insurer. However, given the fact that Miles meets the requirements of the insurable interest as specified in section 5 (1) of the MIA 1906, the policy on gaming and wagering may not be applied to this case.