Category: Marine · Reviewed by Amy Price, Account Executive · Last reviewed 2026-06-05
The Marine Insurance Act 1906 is the United Kingdom statute that codifies the common law of marine insurance, defining the marine insurance contract, insurable interest, utmost good faith, warranties, the kinds of loss, average, subrogation and the SG Form historically used at Lloyd’s.
Category: Marine insurance Also known as: MIA 1906, the Act, Chalmers Act (after Sir Mackenzie Chalmers, its principal draftsman) First codified: 21 December 1906 Related legislation: Insurance Act 2015 [2]; Consumer Insurance (Disclosure and Representations) Act 2012 [3]; Carriage of Goods by Sea Act 1992 [4]
The Marine Insurance Act 1906 is the foundational statute of English marine insurance law. It does not create the law afresh but codifies more than two centuries of common law developed by the English courts, particularly the decisions of Lord Mansfield and his successors in the Court of King’s Bench. The Act applies to any contract of marine insurance, whether written at Lloyd’s, in the company market or elsewhere, and remains in force more than a century after its enactment [1].
The statute defines a contract of marine insurance in s.1 as a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure. Sections 2 and 3 extend the definition to mixed sea and land risks and define marine adventure and maritime perils. The Act covers the formation, terms, performance and termination of the marine insurance contract, the rights of the parties on loss, and the procedural rules governing claims and recoveries [1].
Schedule 1 to the Act sets out the SG Form, the standard policy form used at Lloyd’s since the late 17th century, together with rules for its construction. Although the SG Form is no longer in active use, having been replaced from 1982 by the MAR Form and the Institute Clauses, it remains historically important and the rules of construction continue to inform interpretation of modern wordings [1][5].
The Act is divided into parts dealing with: insurance (ss.1–3), insurable interest (ss.4–15), insurable value (ss.16), disclosure and representations (ss.17–21), the policy (ss.22–32), warranties (ss.33–41), the voyage (ss.42–49), assignment (ss.50–51), premium (ss.52–54), loss and abandonment (ss.55–63), partial losses including particular average and general average (ss.64–66), measure of indemnity (ss.67–78), rights of insurer on payment (ss.79–80), return of premium (ss.82–84) and mutual insurance (s.85) [1].
Section 4 prohibits wagering contracts: a contract of marine insurance by way of gaming or wagering is void. Section 5 defines insurable interest, requiring the assured to stand in a legal or equitable relation to the adventure or to any insurable property at risk therein. Section 17 imposes the duty of utmost good faith, providing that the contract may be avoided by either party if utmost good faith is not observed. Sections 18 to 20, which set out the assured’s duty of disclosure and the avoidance remedy for material misrepresentation or non-disclosure, have been substantially modified for non-consumer contracts by the Insurance Act 2015, which introduced a proportionate remedies regime in place of automatic avoidance [1][2].
Sections 33 to 41 govern warranties. A warranty under the Act is a promissory undertaking that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby the assured affirms or negatives the existence of a particular state of facts. The historic rule that breach of warranty automatically discharged the insurer’s liability from the date of breach has been replaced by the Insurance Act 2015 with a suspensive effect: liability is suspended during the period of breach and resumes when the breach is remedied [1][2]. Section 39 implies a warranty of seaworthiness into voyage policies. Section 55 sets out the perils insured against and the statutory exclusions, including wilful misconduct, ordinary wear and tear, inherent vice and rats and vermin.
Sections 64 to 66 define the law of average: particular average (a partial loss caused by a peril insured against, not being a general average loss), general average (a sacrifice or expenditure voluntarily and reasonably made in time of peril for the common safety), and the rules for contribution between interests. Section 78 preserves the assured’s duty to sue and labour. Section 79 confirms the insurer’s right of subrogation on payment [1].
The Consumer Insurance (Disclosure and Representations) Act 2012 governs disclosure in consumer marine policies, principally pleasure craft cover written for individuals [3].
Marine insurance practitioners refer to the Act constantly. Brokers and underwriters use its definitions when setting cover, claims adjusters apply its loss provisions, and average adjusters depend on its framework when distributing general average and apportioning losses. The Act is the default framework, but its provisions are routinely modified by express contract terms in the policy wording. For example, the warranty of seaworthiness in s.39 is excluded in modern hull wordings, and the disclosure regime in s.18 has been overlaid by the Insurance Act 2015 for commercial contracts [1][2][5].
When a coverage dispute arises, the starting point is always the express terms of the policy; if the policy is silent, the Act fills the gap. Courts construe Institute Clauses against the background of the Act, and many modern decisions concern the interaction between the Act and modern wordings. The leading texts (Arnould on Marine Insurance, Templeman on Marine Insurance and Carver on Bills of Lading) remain organised around the statutory framework.
In subrogated recoveries the insurer relies on s.79 to step into the assured’s rights against third parties. In claims involving general average the insurer pays the assured’s contribution determined under the York-Antwerp Rules, with the right of contribution flowing from s.66 [1].
The Act applies in England, Wales, Scotland and Northern Ireland and has been adopted, often in near-identical form, in many common law jurisdictions including Australia (Marine Insurance Act 1909), Canada (Marine Insurance Act 1993), India (Marine Insurance Act 1963) and Singapore. Lloyd’s policies historically used the SG Form set out in Schedule 1, but from 1 January 1982 the market moved to the MAR Form (a short schedule) used with the Institute Clauses for cargo, hull, war and strikes risks. The MAR Form was updated to MAR 91 and continues in use [5].
The Insurance Act 2015 reforms apply only to contracts entered into on or after 12 August 2016 and may be partly contracted out of in non-consumer contracts subject to transparency requirements in s.16 of that Act [2].
A 1995 vintage bulk carrier insured on Institute Time Clauses–Hulls 1/11/95 grounds in a foreign port. The owner notifies underwriters and salvors are engaged. Issues that arise include: was the vessel seaworthy when it sailed (s.39, modified by the policy), what was the cause of the grounding (s.55 perils), is the damage particular average or constructive total loss (ss.60–64), are the salvors’ costs sue and labour or general average (ss.66, 78), and what subrogated rights does the insurer have against any third party responsible (s.79). Each question is approached by reference to the statute as modified by the policy wording and the Insurance Act 2015.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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