Right or Abandonment in Marine Insurance, Historical

Right or Abandonment in Marine Insurance, Historical in Europe

Election to Abandon

The insured is never obliged to abandon ; he may always elect to retain the property and recover
for a partial loss. But if he wishes to claim for a total loss, he must abandon if the loss is merely constructively total.

Limitations of the Right

Duty of Insured to Repair or Transship.- The assured impliedly warrants that he will guard with reasonable diligence against the risks covered by the policy, so that a loss shall not happen through his own default or negligence. It is the duty of the insured to repair, if it be possible; or, if this is impossible, to transship by another vessel.

It results that a partial loss cannot be made total by the neglect of the master to repair or transship, or by an unjustifiable sale on his part.

Peril within Policy.—When a total loss is claimed it must appear that it was caused directly by one of the perils within the policy.

Depends on State of Facts.—The right to abandon depends on the facts as to the loss existing at the time of the abandonment, not on the information of the person abandoning. In the United States, the right to abandon, once vested, can never divest by reason of a subsequent change of circumstances.

In England it is otherwise, and unless the facts justifying abandonment continue up to suit brought, the abandonment is futile.

Right of Insurer to Repair.—The right of the underwriter to repair, against the will of the owner, and thus defeat the right of the latter to abandon, is recognized in some of the states.

Abandonment must be Entire.—The abandonment must be of the whole interest of the insured in the property abandoned, so far as that interest is covered by the policy.

When Abandonment is Justified

To entitle the insured to abandon, there must be a total loss, either real or constructive, at
some period of the voyage. This loss must happen before the termination of
the risk. A loss merely partial cannot be made total by an offer of abandonment
j but when a person insures only part of his interest he may abandon
that part only. Abandonment is not favored.

When Abandonment is Justified: Particular Cases

Capture, Embargo, and Blockade— In General, capture, embargo, and blockade may operate as an actual or constructive total loss, according to the course of subsequent events. Each is for the time a tatal loss, and, as the duration is uncertain, justifies abandonment ; but if the detention ends by recapture, or the like, before the abandonment is made, the right to abandon is gone.
But, as special rule, in case of Apprehension of Loss, apprehension of peril is no ground for abandonmen.

Loss and Retardation of Voyage.—If the insurance be on a ship for a voyage the undertaking is that the voyage shall not be destroyed by the fault of the ship, by reason of the happening to her of any of the perils insured against. Consequently, the loss of the cargo for the voyage is not a cause for an abandonment ; and if the ship is damaged, the question under such a policy is her seaworthiness with respect to the voyage insured. Where there is an insurance on goods for a voyage, if, by reason of perils insured against, the cargo is permanently prevented from arriving
at the port of destination, there is a total loss. And the loss of voyage by necessary sale at an intermediate port justifies an abandonment.

But mere retardation of a voyage by a peril insured against is no ground for abandonment.
Stranding and Submersion.—Stranding or submersion may or may not be a total loss, according to the circumstances of the case.

Sale by Necessity.—A sale by the master at a port of distress justifies an abandonment ; but the sale must have been justifiable. Where the sale is justified, not by the constructive total loss of the article insured, but by reason of the impossibility of obtaining means of repair at the port of distress, it appears that an abandonment is necessary.

Freight.—Where the ship is disabled, and the circumstances are such as to render the total loss of freight, though not inevitable, yet highly imminent, or when more than one half the freight must necessarily be lost, or there is an actual or constructive total loss of the vessel, the insured may (subject to the stipulations of his policy) claim as for a total loss by giving due notice of the abandonment of freight to the insurer.

Profits.—When the insurance is on profits, the loss of cargo is a loss of profits. And abandonment by the insured is in some instances necessary.

Outfits.—The constructive total loss of a whaling vessel at a port where whaling outfits are obtainable, and where the outfits are in safety, is not a constructive total loss of the outfits, though there are no means of forwarding them within a reasonable time.

Total Loss of Part of Cargo.—The question has sometimes arisen in connection with articles free from average unless general, whether there could be a total loss of a portion of the cargo. Where the memorandum articles consist of distinct species, there may be a total loss of the whole of a particular species. But where the articles are of the same species, and, if in separate packages, are not expressed, by distinct valuation or otherwise, in the policy to be separately insured, there can be no loss of a portion.

Notice of Abandonment

Who may Give Notice.—A valid abandonment can only be made by one who has power to make a legal transfer of the property abandoned.

To Whom Given.—Notice must be given to the insurer or to his agent.

Form and Sufficiency.—No particular form of notice is essential; but it is sufficient if expressions are used which inform the underwriters that it is the intention of the insured to give up to them the property insured, upon the ground of its having been totally lost. The notice, at least in the
United States, must also specify the cause on account of which the loss is claimed, and the insured is restricted to the cause of loss stated in the notice. If the abandonment be invalid the insured may still recover for his partial loss.

Time of Notice.—Notice must be given within a reasonable time; and what is a reasonable time depends upon the circumstances of the case. The insured is entitled to a sufficient interval, to determine fairly whether he is entitled to abandon. Particular provisions in the policy may control; and by agreement of both parties the right may be kept in suspense.

Waiver and Revocation.—Notice may be waived by acts of the assured inconsistent with an abandonment, or may be withdrawn by consent of both parties.

Abandoned Vessel Bought by Master.—The decisions as to the effect of a purchase by the master or by the owner upon the sale of a vessel after abandonment are not easily reconciled. Where, after abandonment, the owner or master sells the vessel bona fide for the benefit of all concerned, it is no waiver.


Effect.—Acceptance is in no case necessary; but an acceptance of the abandonment on the part of the underwriter puts at rest every question as to the seasonableness or sufficiency of the notice.

What Amounts to Acceptance.—The acceptance may be either an actual acceptance, or may be implied from the exercise, by the insurer, of acts of ownership, or even from a failure, for a sufficient length of time, to refuse the abandonment, but silence not amounting to estoppel is insufficient.

Who may Accept.—The acceptance must be by one who has power to bind the insurer.

Time of Taking Effect.—Acceptance when made relates to the time of the loss.

Effect of Abandonment

General Principles.—An abandonment divests the property of the thing abandoned out of the insured, and vests it in the insurer, together with all the rights of property and rights of action incident thereto, and all the burdens and liabilities in respect thereof, from the moment of the casualty to which the abandonment refers.

But the abandonment operates as a transfer only to the extent of the insureds interest. The master of the ship and agents of the insured thereupon become agents of the insurer, and the insured is not bound by their subsequent acts unless he adopts them.

Apportionment of Freight.—In England this doctrine as to the effect of abandonment is construed, in the case of the abandonment of a ship, to carry, as an incident to the ship, the right to the whole freight pending at the time of the abandonment and subsequently earned, to the abandonee. The rule in the United States as to freight is different, and the freight is apportioned; that earned previous to the abandonment going to the insured, and that afterward earned belonging to the abandonee.

See Also

  • Abandonment and Total Loss in Marine Insurance, Historical
  • Admiralty, Historical
  • Average, Historical
  • Blockade
  • Embargo
  • Jettison
  • Marine Insurance
  • Maritime Liens
  • Masters of Vessels
  • Salvage
  • Shipps and Shipping
  • Subrogation
  • Usages and Customs
  • Abandon, Historical

Further Reading

  • Encyclopedia of Pleading and Practice, title “Insurance”
  • A manual of maritime law : consisting of a treatise on ships and freight and a treatise on insurance : translated from the Latin of Roccus : with notes, by Francesco Rocco; Joseph R Ingersoll, Philadelphia : Hopkins and Earle, 1809.
  • An essay on average : and on other subjects connected with the contract of marine insurance por Robert Stevens, of Lloyd’s. London, 1813.
  • A treatise on maritime law : including the law of shipping, the law of marine insurance, and the law and practice of admiralty, by Theophilus Parsons, Boston : Little, Brown, 1859.
  • A practical treatise on the adjustment of general average in the United States and other countries : including the elements of maritime and insurance law, also, the rights and liabilities of underwriters and ship-owners, and the general duties of ship-masters,by Francis B Dixon, New York : H. Spear, 1867.
  • Hand-book of marine insurance and average, by Francis B Dixon, New York : Henry Spear, 1862.
  • The law of insurance : as applied to fire, accident, guarantee, and other non-maritime risks, by John Wilder May; Frank Parsons, Boston : Little, Brown, 1891.
  • A treatise on the law of marine insurance and average : with references to the American cases and the later continental authorities, by Joseph Arnould, Sir, London : V. & R. Stevens and G.S. Norton, 1857.
  • Arnould on the law of marine insurance and average. By Joseph Arnould, Sir; Edward Louis De Hart; Ralph Iliff Simey, London : Stevens & Sons, 1914.
  • An essay on maritime loans, by Balthazard-Marie Emerigon; John E Hall, 1811.



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