Code, or as a condition to granting a license to conduct a business or calling affecting the public safety or welfare).
3. Aleatory – Liability of the insurer depends upon some contingent event.
Note: An aleatory contract is a contract where one or both of the parties reciprocally bind themselves to give or do upon the happening of an event which is uncertain, or which is to occur at an indeterminate time (Art. 2010, NCC). 4. Unilateral – It imposes legal duties only on insurer who promises to indemnify in case of loss.
5. Conditional – It is subject to conditions the principal one of which is the
happening of the event insured against. 6. Contract of indemnity – GR: The insurer promises to make good only the loss of the insured. XPN: A life insurance is not a contract of
indemnity. It is not applicable to life insurance policies because life is not capable of pecuniary estimation. The only situation where the principle of indemnity is applicable to life insurance is if the amount in the policy is fixed. An example would be in a case where a creditor insures the life of his debtor to the extent of the latter’s debt to the former.
7. Personal – Each party having in view the character, credit and conduct of the other.
8. Property – Since insurance is a contract, it is property in legal contemplation.
9. Risk distributing device – Insurance serves to distribute the risk of economic loss among as many as possible of those who are subject to the same kind of loss.
10. Onerous – there is a valuable consideration called the premium IV. CLASSES OF INSURANCE Q: What are the 3 classes of insurance? A: 1. Life insurance – dependent upon human life. a. Individual life b. Group life c. Industrial life 2. Non‐Life Insurance a. Marine b. Fire c. Casualty
3. Contracts of suretyship or bonding. (De
Leon, The Insurance Code Annotated, 2006) A. MARINE INSURANCE Q: What is marine insurance?
A: Insurance against risks connected with
navigation, to which a ship, cargo, freightage, profits or other insurable interest in movable property, may be exposed during a certain voyage or fixed period of time. Q: What vessels are contemplated in marine insurance?
A: Those used, or at least, intended for
navigation. E.g., one for shipping, chartering, voyage and the like. Vessels which are used as museums or those that are stationary are not entitled to be insured under this a marine insurance. Q: What does marine insurance include? A: Marine insurance includes: 1. Insurance against loss or damage to: a. Vessels, goods, freight, cargo,
merchandise, profits, money, valuable papers, bottomry and respondentia, and interest in respect to all risks or perils of navigation;
b. Persons or property in connection with marine insurance;
c. Precious stones, jewels, jewelry and precious metals whether in the course of transportation or otherwise; and
d. Bridges, tunnels, piers, docks and other aids to navigation and transportation (Sec. 99)
Note: Cargo can be the subject of marine insurance, and once it is entered into, the implied warranty of seaworthiness immediately attaches to whoever is insuring the cargo, whether he be the ship owner or not. (Roque v. IAC, G.R. No. L‐ 66935, Nov. 11, 1985)
2. “Marine protection and Indemnity
insurance” which means insurance
against, or against legal liability of the insured for loss, damage, or expense incident to ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft or instrumentality in use of ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person. (Sec. 99) Measure of indemnity: a. Valued policy – the parties are bound by the valuation, if the insured had some interest at risk and there is no fraud (Sec. 156)
b. Open policy – the following rules shall apply in estimating a loss:
i. value of the ship‐ value at the beginning of the risk
ii. value of the cargo‐ actual cost when laden on board or market value at the time and place of lading
iii. value of freightage‐ gross freightage exclusive of primage
iv. cost of insurance – in each case to be added to the estimated value (Sec.
161)
Q: What are the two major divisions of Marine insurance?
A:
1. Ocean marine insurance – covers primarily sea perils of ships and cargoes. Scope: GELS
a. Goods or cargoes
b. Earnings such as freight, passage money
c. Liability incurred by reason of
maritime perils d. Ships or hulls
2. Inland marine insurance – covers primarily the land or over the land (but sometimes water) transportation perils of property shipped by railroads, motor trucks, airplanes, and other means of transportation. It also covers risks of lake, river, or the other inland waterway transportation and other waterborne perils outside of those risks that fall definitely within the ocean marine category. Classes: Pt‐BFF
a. Property in Transit – Provides protection to the property frequently exposed to loss while it is being transported from one location to another.
b. Bailee liability – Insurance for those who have temporary custody of the goods.
c. Fixed transportation property –
They are so insured because they are held to be an essential part of transportation system such as bridges, tunnels, etc.
d. Floater – Provides insurance to follow the insured property wherever it may be located subject always to the territorial limits of the contract.
Q: What does the phrase “perils of the sea or perils of navigation” mean?
A: It includes only those casualties due to the
unusual violence or extraordinary action of wind and wave, or to other extraordinary causes connected with navigation.
Q: What does “perils of the ship” mean?
A: It is a loss which, in the ordinary course of
events, results from:
1. The natural and inevitable action of the sea
2. The ordinary wear and tear of the ship 3. The negligent failure of the ship’s owner