Warranty (in insurance)
A promise in the policy — since 2015, a suspensive one rather than a fatal one.
Definition
A term by which the insured undertakes that something will or will not be done, or that a state of affairs exists. Under the Marine Insurance Act 1906 breach of a warranty discharged the insurer from liability automatically, whether or not the breach had anything to do with the loss. The Insurance Act 2015 changed this for contracts governed by English law: a breached warranty now suspends cover until it is remedied, and a term designed to reduce a particular kind of risk cannot be relied on to decline a loss of a different kind.
Why it decides money
Cargo warranties are usually practical — a sealed container, a specific packing standard, a named security procedure. They are conditions on the cover, not advice.
Related terms
- Duty of fair presentation
- What you must tell the underwriter before they quote.
- Marine Insurance Act 1906
- The English statute that still frames most cargo policies worldwide.
More in law and duties
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