Name: Magbojos, Kristine V.

TOPIC: Marine Insurance – Peril of the Ship vs. Peril of the Sea (1998)

PROBLEM: A marine insurance policy on a cargo states that ― “the insurer shall be liable for
losses incident to perils of the sea.” During the voyage, seawater entered the compartment
where the cargo was stored due to the defective drainpipe of the ship. The insured filed an
action on the policy for recovery of the damages caused to the cargo. May the insured recover
damages? (5%)

ANSWER:

No. In the case of La Razon Social “Go Tiaoco y Hermanos” v. Union Insurance Society of
Canton, Ltd., it was ruled that a loss which, in the ordinary course of events, results from the
natural and inevitable action of the sea, from the ordinary wear and tear of the ship, or from the
negligent failure of the ship's owner to provide the vessel with proper equipment to convey the
cargo under ordinary conditions, is not a peril of the sea. Such a loss is rather due to what has
been aptly called the "peril of the ship.” In the present case, the proximate cause of the damage
to the cargo insured was the defective drainpipe of the ship. This is peril of the ship, and not
peril of the sea and the defect in the drainpipe was the result of the ordinary use of the ship. To
recover under a marine insurance policy, the proximate cause of the loss or damage must be
peril of the sea. Hence, the insured cannot recover damages.