Marine Insurance Claim in the Philippines: How to File and What the Law Says

Marine insurance in the Philippines is governed by the Insurance Code, as amended by Republic Act No. 10607. A marine insurance claim is a demand for indemnity for loss of or damage to a vessel, cargo, freight, or other insured maritime interest. To recover, the claimant must show an insurable interest, that the loss was proximately caused by an insured peril, and that notice of loss and proof of loss were given as the policy requires. The insurer, in turn, may raise defenses such as concealment, breach of the implied warranty of seaworthiness, or deviation.

What marine insurance covers

Section 101 of the Insurance Code defines marine insurance broadly. It includes insurance against loss of or damage to vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, and other property in connection with risks or perils of navigation, transit, or transportation. It also covers property while being prepared for shipment, while awaiting shipment, and during delays, storage, transhipment, or reshipment.

The same provision covers marine protection and indemnity insurance — insurance against legal liability for loss, damage, or expense incident to the ownership, operation, chartering, maintenance, use, repair, or construction of a vessel, including liability for personal injury, illness, death, or damage to another's property.

Who has an insurable interest

A claim can only succeed if the claimant has an insurable interest in the thing insured. Under Section 13, every interest in property of such a nature that a contemplated peril might directly damnify the insured is an insurable interest. Section 17 provides that the measure of that interest is the extent to which the insured might be damnified by loss or injury.

For ships specifically, Section 102 states that the owner of a ship has in all cases an insurable interest in it, even when it has been chartered by one who covenants to pay its value in case of loss — but the insurer is liable only for the part of the loss the insured cannot recover from the charterer. Section 108 gives the charterer an insurable interest to the extent he is liable to be damnified by the ship's loss. Section 15 provides that a carrier or depository has an insurable interest in a thing held by him, to the extent of his liability but not exceeding its value.

The implied warranty of seaworthiness

Every marine insurance upon a ship, freight, freightage, or anything subject to marine insurance carries an implied warranty that the ship is seaworthy (Section 115). A ship is seaworthy when reasonably fit to perform the service and to encounter the ordinary perils of the voyage contemplated by the parties (Section 116).

Section 118 explains that this warranty extends not only to the structure of the ship but also requires that it be properly laden and provided with a competent master, sufficient competent officers and seamen, and the requisite appurtenances and equipment. Where the ship becomes unseaworthy during the voyage, an unreasonable delay in repairing the defect exonerates the insurer on the ship or shipowner's interest from liability for any loss arising from it (Section 120).

Notice and proof of loss

For non-life insurance, the Insurance Code gives the Commissioner of Insurance the authority to specify the period for submitting the notice of loss (Section 90). When a policy requires preliminary proof of loss, the insured need not give proof of the kind required in court — the best evidence in his power at the time is sufficient (Section 91).

Defects in a notice or preliminary proof that the insured could remedy are waived if the insurer fails to specify them, without unnecessary delay, as grounds for objection (Section 92). Delay in presenting notice or proof is likewise waived if caused by any act of the insurer, or if the insurer omits to object promptly and specifically on that ground (Section 93).

How to file a marine insurance claim

1. Review the policy. Confirm the risks insured against, the period of cover, and the requirements for notice and proof of loss (Section 51).
2. Give notice of loss promptly. For non-life insurance, follow the period the Commissioner may prescribe (Section 90).
3. Submit proof of loss. Provide the best evidence available, such as survey reports, receipts, and documents showing the extent of damage (Section 91).
4. Establish the proximate cause. The insurer is liable where a peril insured against was the proximate cause of the loss, even if an uninsured peril was a remote cause (Section 86).
5. Watch for defenses. The insurer may raise concealment, false representation, breach of warranty, or deviation.

Frequently asked questions

What is a marine insurance claim in the Philippines? It is a demand for indemnity under a marine insurance policy governed by the Insurance Code, covering loss or damage to vessels, cargo, freight, and related maritime interests.

Does the owner of a chartered ship still have an insurable interest? Yes. Under Section 102, the owner has an insurable interest even when the ship is chartered by one who covenants to pay its value in case of loss, though the insurer is liable only for the part of the loss not recoverable from the charterer.

What happens if the ship is not seaworthy? Every marine insurance on a ship or freight implies a warranty of seaworthiness (Section 115). Breach of that warranty can exonerate the insurer, and unreasonable delay in repairing a defect that makes the ship unseaworthy during the voyage also exonerates the insurer from liability for losses arising from it (Section 120).

Practical takeaways

• Marine insurance covers vessels, cargo, freight, and protection and indemnity liabilities under Section 101 of the Insurance Code.
• The claimant must have an insurable interest measured by the extent of possible damnification (Sections 13 and 17).
• Seaworthiness is an implied warranty in every marine policy on a ship or freight (Section 115).
• Notice and proof of loss requirements should be complied with promptly; defects the insurer does not timely object to may be waived (Sections 92 and 93).
• The insurer is liable when an insured peril is the proximate cause of the loss (Section 86).

Primary sources

The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.

• REPUBLIC ACT NO. 10607 - AN ACT STRENGTHENING THE INSURANCE INDUSTRY, FURTHER AMENDING PRESIDENTIAL DECREE NO. 612, OTHERWISE KNOWN AS “THE INSURANCE CODE”, AS AMENDED BY PRESIDENTIAL DECREE NOS. 1141, 1280, 1455, 1460, 1814 AND 1981, AND BATAS PAMBANSA BLG. 874, AND FOR OTHER PURPOSES

• IRR of REPUBLIC ACT NO. 10635 - 2022 IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT 10635, "ACT ESTABLISHING THE MARINA AS THE SINGLE MARITIME ADMINISTRATION RESPONSIBLE FOR THE IMPLEMENTATION AND ENFORCEMENT OF THE INTERNATIONAL CONVENTION ON STANDARDS OF TRAINING, CERTIFICATION AND WATCHKEEPING FOR SEAFARERS, 1978, AS AMENDED, AND INTERNATIONAL AGREEMENTS OR COVENANTS RELATED THERETO:

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.