died from a pistol wound, inflicted by his own hand, and that he intended inflicting such a wound to destroy his own life. Held, that the policy was avoided even though the deceased was of unsound mind and unconscious of his acts when he inflicted the wound.

– Bigelow v. Life Insurance Co., 93 U. S. 284.

Notice of Death. In life insurance the company generally requires immediate notice of death and due proof that the person insured is dead.

QUESTIONS

1. In its simplest form, what is life insurance?

2. What are the different forms of life insurance agreements?

3. When may a person be said to have an insurable interest in the life of another?

4. Has a creditor an insurable interest in the life of a debtor?

5. Has a nephew an insurable interest in the life of an uncle?

6. What are the rules concerning an insurable interest at the time the policy is taken out and subsequently?

7. How are premiums on life insurance graded?

8. How is the amount of the premium determined?

9. How does the concealment of a material fact affect a contract of life insurance?

10. What will render a life insurance contract void?

11. How are answers to questions in the application considered?

12. Are life insurance policies uniformly the same? Explain. 13. What are the usual premium provisions in a policy?

14. Under what conditions is an insurance company liable if the person insured commits suicide?

5. MARINE INSURANCE

Definition. Marine insurance is a contract by which the insurer agrees to indemnify the insured against certain perils or risks to which his ships, cargo, and profits may be exposed during a certain trip or during a specified time.

Insurable Interest. The rules governing this class of insurance closely follow the laws of fire insurance. The person procuring the policy must have an insurable interest in the property insured. The owner always has an insurable interest, even though the property has been chartered to a person who agrees to pay its value in case of loss. The charterer also has an insurable interest in the ship. Practically the same rules apply to the insurable interest here as in fire insurance.

Effect of Fraud. The requirement of good faith between the parties is even greater in marine insurance than in any other branch of insurance. The reason for this is that the insured has every opportunity to know all of the facts and the insurer but limited opportunity to determine them. A concealment of a material fact either innocently or fraudulently avoids the

contract.

Misrepresentation. So a material misrepresentation of a fact, whether innocently or fradulently made, avoids the contract. The rule is even more strict here than in fire insurance.

A policy of marine insurance was obtained at and from Genoa. The load was put on at Leghorn, bound for Dublin, but the vessel put in at Genoa and had been there about five months before sailing. Richardson contended that the policy was vitiated because of the nondisclosure to the insurer that the vessel was not loaded at Genoa. Held, that Hodgson could not recover. The concealment of the port of loading vitiated the policy.

Hodgson v. Richardson, 1 W. Black (Eng.) 463.

Warranty. A warranty, as in fire insurance, must be strictly performed. In marine insurance there are three implied warranties which are understood in every contract. They are in respect to seaworthiness, deviation, and legality.

Seaworthiness. There is implied the warranty that the ship is seaworthy at the time of the commencement of the risk. A ship is seaworthy when reasonably fit to perform the services and encounter the ordinary perils incident to the voyage. This means that the ship shall be stanch, properly rigged, and provided with a competent master and a sufficient number of seamen.

The steamship West was insured for a voyage from Montreal to Halifax. At the time of starting the voyage there was a defect in the boiler of the vessel which was not apparent in a river, but which disabled the vessel when she got into salt water. It was held that the implied warranty of seaworthiness had not been complied with as the vessel sailed with a defect which rendered her unseaworthy for the complete voyage.

Quebec Marine Ins. Co. v. Com. Bank, 7 Moore, Þ.C.N.S. (Eng.) 1.

Deviation. The second implied warranty is that there shall be no voluntary deviation or departure from the course fixed by mercantile usage, for the voyage contemplated by the policy; and also that there shall be no unreasonable delay in commencing or making the voyage.

A deviation is justified when caused by circumstances over which neither the owner nor master had any control, as when forced from the course by stress of weather, a mutinous crew,

etc.

If the master of a vessel which has been insured, in departing from the usual course of the voyage from necessity, because of leaking of the vessel, acts in good faith and according to his best judgment, and has no other object than to conduct the vessel by the safest and shortest course to the port of destination, the insurance will not be forfeited.

- Turner v. Insurance Co., 25 Maine 515.

Legality. The third implied warranty is that the voyage shall be legal, both in its nature and in the manner in which it is prosecuted. Smuggling voyages and trading trips to an enemy's port are cases of illegal voyage.

Losses. The loss may be total, in which case the whole insurance is ordinarily recoverable; or it may be partial, and then only a pro rata part can be recovered. When the loss is total, it may be an actual total loss or a constructive total loss. An actual total loss occurs when the subject insured wholly perishes, as when a vessel is so completely wrecked that it can not be repaired.

When a policy of insurance upon a vessel is against "actual total loss only," if the vessel is afloat or it is practicable to put her afloat, or if she is capable of being repaired, at any expense, it is not such a total loss. Carr v. Insurance Co., 109 N. Y. 504.

A constructive total loss occurs when the article insured is so far damaged or lost that it can not be reclaimed or repaired, except at a greater cost than its value. For example, a vessel may be sunk in shallow water, but the cost of raising it would be greater than it is worth.

An insured vessel was thrown on the rocks, her rudder and keel torn off, one side beaten in so that the cargo of salt was washed out and the vessel was in danger of destruction. Held that the vessel was a constructive total loss. — King v. Middletown Ins. Co., 1 Conn. 184.

The rule adopted in some jurisdictions is, that if the property insured by a marine insurance policy is damaged to such an extent that its value is reduced one half or more; that is, if there is a one-half loss or more, the person insured may abandon the property as a constructive total loss, and claim the full amount

of insurance. Notice of the abandonment must be given the insurers so that they may take measures to claim the property and avail themselves of whatever may be saved.

General Average. From very early times, it has been the custom where goods were thrown overboard to save the vessel from sinking, for the owners of goods on board and the owners of the vessel to share proportionately the loss caused by sacrificing certain goods that the vessel and a portion of the cargo might be saved.

QUESTIONS

1. What is marine insurance?

2. Has a person who hires a ship for the season an insurable interest? 3. Will a misrepresentation innocently made affect a marine policy? Explain.

4. What are the three implied warranties in marine insurance?

5. Explain the terms "total loss" and "partial loss."

6. When is a loss said to be a "constructive total loss"?

7. What is the meaning of the term "general average"?

6. CASUALTY INSURANCE

Definition. Casualty insurance is an indemnity against loss resulting from bodily injury or the destruction of certain kinds of property. It may be accident insurance, which is an indemnity against personal injury by accident, or it may be one of the numerous classes of insurance that have sprung up within the past few years, granting indemnity against almost every conceivable form of catastrophe. Among these special forms of casualty insurance may be mentioned plate glass, boiler, employers' liability, fidelity, credit, title, and automobile insurance.

Accident Insurance. Accident insurance is a branch of life insurance, the latter insuring against death by any cause, while the former insures against death or injury caused by accident. This class of insurance usually provides a certain payment in case of accidental death, a weekly indemnity for either permanent or total disability by reason of accident, and a fixed sum for such permanent injury as the loss of one or both of the hands, feet, or eyes. An accident in this sense is an unforeseen event which results in injury to one's person. Being thrown from an automobile

in a collision and being struck by a falling timber are accidental

injuries.

While the injured was pitching hay, the handle of the fork slipped through his hands and struck him in the body, inflicting an injury which caused inflammation resulting in his death. Held, that the death was the result of an accident.

- North American Insurance Co. v. Burroughs, 69 Pa. State 43. Unless the policy expressly excludes death by poisoning, the accident policy is held to cover death due to the accidental taking of poison.

Employers' Liability Insurance. - Employers' liability insurance is a class of protection afforded to employers engaged in manufacturing or other business, against liability for damages for personal injuries caused by the negligence of the employer or his servants. One occasion for this class of insurance has arisen because of the fact that when an employee in a factory is killed by reason of some faulty machinery his survivors may sue the employer for damages. The insurance company in which the employer has insured this risk defends the case, and if the proprietor is defeated, the insurance company pays the loss. (See Important Statutes, page 379.)

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Fidelity Insurance. Fidelity or guaranty insurance is a contract by which an employer is insured against loss by the fraud or dishonesty of his employees. It is in fact a guaranty of the honesty of an employee. Fidelity insurance companies issue bonds guaranteeing the faithful performance of contracts as well, and in all cases in which bonds are required it is now the common practice to purchase them of such a company.

Credit Insurance. - Credit insurance protects merchants and tradesmen from loss through the insolvency or dishonesty of their customers. For a certain premium the insurance company guarantees the merchant against bad debts. The merchants must usually bear a certain small per cent, and all losses over that amount are paid by the insurance company.

Title Insurance. Title insurance is a guaranty to the owner of real property that his title is clear. It is an insurance against defects in the title to the property insured, and in case of loss by reason of liens or incumbrances prior to the interest of the insured, the company indemnifies him.