A Breton pot-fishing vessel springs a leak offshore and has to be towed in. The hull insurer refuses to pay: the corrosion of the shell plating, it says, is a matter of inherent vice and inadequate maintenance. The owner, whose vessel had passed its safety inspections, is baffled.
The principle: perils of the sea are covered
The French Insurance Code lays down broad cover: the insurer is liable for material damage caused to the insured property by any peril of the sea or by an event of force majeure (Article L. 172-11). Fault on the part of the insured is not enough to exclude cover, unless the insurer establishes a lack of reasonable care to protect the vessel from the risks that materialised; only intentional fault and inexcusable fault of the insured are excluded (Article L. 172-13). Fault of the master or crew does not deprive the owner of cover, save in the case of intentional fault by the master (Articles L. 172-14 and L. 173-5).
The exclusions relied on by the insurer
Inherent vice. The insurer does not cover damage and loss resulting from an inherent vice of the vessel, unless it is a latent defect (Article L. 173-4; see also Article L. 172-18). The boundary is a technical one: progressive corrosion visible during inspections is not a latent defect; an undetectable structural weakness is.
Lack of care. The insured must exercise reasonable care in all matters relating to the vessel (Article L. 172-19). The insurer relies on this breach where maintenance has been neglected. It bears the burden of proving that the damage is due to that lack of care (Article L. 172-13).
The policy conditions. French policies and English clauses (Institute Time Clauses) add their own exclusions and obligations: maintenance of class, notification of casualties, navigation limits.
What the claims settlement covers
The settlement of damage reimburses only the cost of the repairs needed to restore the vessel to a seaworthy condition, to the exclusion of any compensation for depreciation or loss of use (Article L. 173-11). Abandonment, which transfers the vessel to the insurer against payment of the insured value, is available in the event of total loss, repairs amounting to three quarters of the agreed value, impossibility of repair, or absence of news (Article L. 173-13).
Two years to bring a claim
Claims arising from a marine insurance contract are time-barred after two years (Article L. 172-31). Discussions with the insurer’s surveyor do not suspend that period.
What the firm checks first
- The policy: French or English conditions, exclusions, agreed value.
- The survey: cause of the casualty, inherent vice or latent defect, state of maintenance.
- Class certificates and safety inspections.
- The burden of proof for each exclusion.
- The two-year time limit.
For the firm’s involvement, see Marine insurance.
Further reading
- Cargo insurance: claiming under the policy after cargo damage
- Boat damaged in winter storage or dry stack: the custodian’s liability
- Pilot error: whom to sue, and for how much?
This analysis is part of the firm’s work in maritime law.
Frequently asked questions
Does the master’s fault allow the insurer to refuse cover?
No, save in the case of intentional fault by the master (Articles L. 172-14 and L. 173-5 of the Insurance Code).
Are wear and corrosion covered?
Inherent vice is not covered, unless it is a latent defect (Article L. 173-4 of the Insurance Code). Everything depends on the cause established by the survey.
Is loss of use of the vessel compensated?
No, the settlement of damage excludes any compensation for loss of use, unless there is specific cover (Article L. 173-11 of the Insurance Code).