ABSTRACT
As we have seen, floating policies are no longer used today and the question arises as to the effect of a missed declaration, or a mistaken declaration, under a modern standard open cover. In respect of a floating policy, the Marine Insurance Act 1906 section 29(3) provides that the declarations, ‘‘must, in the case of goods, comprise all consignments within the terms of the policy, and the value of the goods or other property must be honestly stated, but an omission or erroneous declaration may be rectified even after loss or arrival, provided the omission or declaration was made in good faith’’.12 This section of the 1906 Act cannot, as such, apply to a modern open cover for it contains provisions that are not directly applicable.13 In The Beursgracht14 there was an open cover for declarations in respect of the assured’s liability as charterer under which the assured had to declare all vessels chartered and the underwriters had to ‘‘accept’’ all declarations. It was held that this was like a floating policy15 and that the underwriters were bound when the goods were shipped and not when the declaration was made. The declaration was not consensual in nature but was a part of the administrative machinery of the contract since it informed the underwriter what risks had
apparent therefore that a declaration under such an obligatory open cover has no part to play in any contractual offer and acceptance.17 It follows that the rule for floating policies as set out in the 1906 Act, regarding the rectification of bona fide late declarations,18 is likely to be applied to declarations under a standard open cargo cover. Indeed such cargo covers recognise the administrative nature of declarations to the extent that the practice in the London market, in many cases, is to do away with individual declarations and for the risk to be underwritten on a premium based on an estimated ‘‘annual transit turnover’’.19 The underwriters normally require a deposit premium adjustable on annual transit turnover, the brokers being responsible for preparing an internal list of declarations and calculating and collecting, or returning, the amount due from, or to, the assured in the event of an adjustment. The breakdown of the annual turnover still represents ‘‘declarations’’ and, it is submitted therefore, that underwriters would be on risk for any bona fide late or erroneous declarations omitted from the internal broker’s transit turnover list.20
