This update outlines the law´s provisions governing marine insurance.
The new Shipping Law (14/2014), which took effect on September 24 2014, marks a milestone in Spanish maritime law. It has brought the domestic regime into line with international conventions and EU regulations, and makes Spain one of the few countries in the world in which the vast majority of maritime law is governed by a single statute (for further details please see “New Shipping Law: key players”, “New Shipping Law: key contracts” and “New Shipping Law: accidents and their aftermath”). This update outlines the law’s provisions governing marine insurance.
Marine insurance contracts are governed by Articles 406 to 467 of the Shipping Law. The most notable changes introduced by the new legislation relate to civil liability insurance.
The marine insurance regime is modelled on modern Anglo-Saxon policies and clauses (mainly those drafted by the Institute of London Underwriters) – as these have long been the most common models in the field – adapted to reflect concepts from the Spanish legal system.
The provisions on marine insurance, which are dispositive in nature, apply to “damages produced as a result of the risks arising from maritime navigation”, with such risks outlined through agreement between the parties. Extraordinary risks, negligence or fault on the part of the insured and inherent fault are excluded, except in some cases where the parties have agreed otherwise. In any case, these provisions do not cover sport and leisure craft, which instead are regulated by the provisions of the General Insurance Contract Law (which further serves as a supplementary law for any instances not foreseen by or included in the Shipping Law).
“All legitimate financial interests, present or future” which are insurable and are exposed to the risks mentioned above are covered by marine insurance. They are specifically listed in Article 409 of the law as ships, vessels and naval artefacts; freight; cargo; civil liability; and any other financial interests. Additionally, the law provides for mandatory insurance in accordance with international conventions, such as civil liability for damage deriving from hydrocarbon pollution and mandatory insurance for liability in the event of the death or physical injury of passengers.
The most notable changes introduced by the new law include the shipowner’s insurance cover for civil liability arising from pollution and for injury to passengers; and the novel provision for a prejudiced third party seeking indemnities in any civil liability insurance to take direct action against the insurer. The insurer can apply to the prejudiced party the same exceptions and liability or debt limitations as apply to the insured party. Any contractual agreement aimed at preventing such direct action will be considered invalid.