ABSTRACT
Certain warranties relate in time to the circumstances at the inception of the risk. For instance, a warranty whereby the assured declares that the shipmanagers have a certain citizenship is a warranty of this type. In cases where such a warranty is breached, the insurer never comes on risk53 and, accordingly, the premium is refundable due to total failure of consideration, unless the breach of warranty is, in fact, fraudulent.54 Some warranties, on the other hand, undertake that a given state of affairs will be satisfied or avoided at some time after the inception of the risk. This kind of warranty could also be referred to as a ‘warranty as to future events’. A navigation warranty which requires the insured vessel not to navigate in certain areas during the currency of the policy is a warranty of this type. By virtue of s 33(3), the breach of such a warranty does not prevent the risk from running and leaves untouched any right which has already vested in the assured at the time of the breach. Accordingly, the assured may still claim for a partial loss which has occurred before the breach. Whether the assured could recover part of the premium paid depends on the divisibility of the risk insured against.55 Finally, an assured with a warranty might undertake that a given state of affairs will not only exist at the inception of the risk, but also during its continuation. It is appropriate to refer to warranties of this type as ‘continuing warranties’. The implied warranty of legality which requires the insured adventure to be a lawful one and, so far as the assured can control the matter, be carried out in a lawful manner, is a good example of warranties of this type. In cases where the warranted state of affairs does not exist at the inception of the risk, the insurer is not liable for any loss which occurs during the currency of the policy. On the other hand, if the warranted state of affairs ceases to exist at one point during the continuation of the policy, the insurer is discharged from further liability from that moment, but any right which has already vested in the assured before the time of breach remains untouched.
