Whether a boatowner knows it or not, there are two occasions upon which he will warrant to his marine insurer that his vessel and all of its appurtenances are in tight, staunch, and seaworthy condition. No words need to be spoken and nothing needs to be written in order for these warranties to be conveyed. The warranties of seaworthiness are silently implied into every hull insurance policy by longstanding principles of marine insurance law. It is important for boatowners to understand these warranties, the manner in which they are conveyed, and the moments they attach, since the penalty for breaching a warranty of seaworthiness is loss of coverage and avoidance of insurance claims.
The first occasion upon which the boatowner conveys an implied warranty of seaworthiness is the moment his insurance coverage takes affect. When he applies for marine insurance, a boatowner impliedly warrants that his entire vessel and its appurtenances are tight, staunch, and fit for their intended purposes. The boatowner impliedly assures his insurer that he knows of no unsafe or unseaworthy conditions that would increase the risk of loss, or cause the insurer to charge a higher premium. If the boatowner knows of any such conditions, he has a duty to disclose them to the insurer at the time of application, since they are material to the risk of loss, and to the premium the insurer sets. If no such conditions are disclosed, the insurer is justified in assuming that the vessel is seaworthy in all respects, since the law presumes that the insurer would not accept the risk of insuring the vessel if it was unseaworthy. However, if a claim is made, and it is discovered that the claim arose from an unseaworthy condition that was known by the boatowner, but was not revealed at the time of application, then the insurer may deny the claim and void the policy as if it never existed.
Many insurers do not rely entirely upon the boatowner’s implied warranty, but also require the boatowner to obtain a marine survey by a competent professional. In addition to impliedly warranting that he knows of no unseaworthy conditions at the time of application, the boatowner must also certify within a reasonable time, that he has corrected any unseaworthy conditions discovered by the marine surveyor. Failure to do so will result in cancellation of the policy. In the event a claim arises due to unseaworthy conditions that were discovered during the survey, but were never corrected, or were falsely reported as corrected, then the insurer may deny the claim and cancel the policy.
The second occasion upon which a boatowner gives an implied warranty that his vessel is seaworthy, is each time his boat leaves the dock. Before each trip, the boatowner warrants to his insurer that he knows of no unseaworthy conditions, and that he has not turned a blind eye to any indications that an unseaworthy condition may exist. An unseaworthy condition is any condition that would render the boat unfit for its intended purposes. If the boatowner knowingly gets underway with his boat in unseaworthy condition, and the unseaworthy condition causes the boat to be lost or damaged, the insurer may deny the claim and void the policy. For example, a boatowner who departs on a voyage, knowing that his engine room fire suppression system is not working properly, and who presents a claim arising from an engine room fire, may expect his claim to be denied and his policy to be voided due to his breach of the implied warranty of seaworthiness. Similarly, if a vessel sinks on a calm, sunny day, it is presumed to have been unseaworthy. The burden will then be upon the owner to demonstrate that the boat was seaworthy before it sank, or that the loss was caused by a latent defect.
The best advice is to disclose all unseaworthy conditions known to you at the time you apply for insurance, and to exercise good seamanship by making all necessary repairs before leaving the dock. Insuring a boat is not as simple as insuring a home or a car, where such implied warranties do not exist. A boatowner has the duty to both disclose and correct all unseaworthy conditions that are known to him before a claim arises. Otherwise, the implied warranties of seaworthiness may convert the purchase of insurance coverage into an expensive exercise in futility.
© 2001 Stephen F. White