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.
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 or misrepresentation of a material fact either innocently or fraudulently avoids the contract.
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 is the condition of a ship when reasonably fit to perform the services and encounter the ordinary perils incident to the voyage. 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. 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.
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.