INSURANCE LAW REVIEWER 2018
Q: What is concealment?
A: A neglect to communicate that which a party knows and ought
to communicate.
Q: Do you think that is the complete definition?
A: There are other requisites. These are: (1) a party knows that
facts which he neglects to communicate or disclose to other;
(2)Such party concealing is duty bound to disclose such fact to
the other; (3) Such party concealing makes no warranty of the
fact concealed; (4) The other party has not the means of ascer-
taining the fact concealed; (5) It must be material
Q: How is materiality determined?
A: A fact is material if the knowledge of it would have a “proba-
bly and reasonable influence upon the insurer in assessing the
risk involved and in making or omitting further inquiries”.
Q: Whom among the parties has the right to determine whether
the fact is material or not?
A: The final determination is upon the courts, including the In-
surance Commissioner through quasi-judicial function.
Q: Is the denial of the claim by the insurer final based on the
ground which in the insurer’s opinion, the fact not disclosed is
material?
A: The insured has the right to question the claim before the
Insurance Commissioner then the courts.
Q: What are the instances or matters which need not be com-
municated by the insurer?
A: These are: (1) Those which tohe other knows; (2) Those
which, in the exercise of ordinary care, the other ought to know,
and of which the former has no reason to suppose him ignorant;
(3) Those of which the other waives communication; (4) Those
which prove or tend to prove the existence of a risk excluded by
a warranty, and which are not otherwise material; (5) Those
which relates to a risk excepted from the policy and which are
not otherwise material; (6) The nature or amount of the interest
of one insured.
Case: Ng Gan Zee vs. Asian Crusades Life Assurance Corpo-
ration
There is concealment where the assured has
knowledge of the fact material to the risk but he designedly and
intentionally withholds the same. It is required that fraudulent in-
tent on the part of the insured be established to entitle the insurer
to rescind the contract.
Case: Regina Edillon vs. Manila Bankers Life Insurance Corpo-
ration
The age of the insured was not concealed to the insur-
ance company. The insurer received her payment of premium
and issued the corresponding certificate without question. There
was sufficient time for the insurer to process the application and
to notice that the applicant was over 60 years of age and thereby
cancel the policy on the ground if it was minded to do so. If the
insurer failed to act, it is either because it was willing to waive
such disqualification; or, through the negligence or incompe-
tence of its employees for which it has only itself to blame, it
simply overlooked such fact. The insurer is already deemed in
estoppel.
Case: Ignacio Saturnino vs. Philippine American Life Insurance
Company
Materiality is to be determined not by the event, but
solely by the probable and reasonable influence of the facts
upon the party to whom the communication due, in forming his
estimate of the proposed contract, or in making his inquiries.
Q: What is non-medical insurance?
A: It dispenses the requirement of medical examination of the
applicant. Thus, a detailed information is called for in the appli-
cation concerning the applicant’s health and medical history.
Sun Life Assurance Company vs CA
Section 26 of the Insurance Code is explicit in requiring a party
to a contract of insurance to communicate to the other, in good
faith, all facts within his knowledge which are material to the con-
tract and as to which he makes no warranty, and which the other
has no means of ascertaining. Anent the finding that the facts
concealed had no bearing to the cause of death of the insured,
it is well settled that the insured need not die of the disease he
had failed to disclose to the insurer. It is sufficient that his non-
disclosure misled the insurer in forming his estimates of the risks
of the proposed insurance policy or in making inquiries. The SC,
therefore, ruled that petitioner properly exercised its right to re-
scind the contract of insurance by reason of the concealment
employed by the insured. It must be emphasized that rescission
was exercised within the two-year contestability period as rec-
ognized in Section 48 of The Insurance Code.
Vda. de Canilang vs CA
SC agreed with the Court of Appeals that the information which
Jaime Canilang failed to disclose was material to the ability of
Great Pacific to estimate the probable risk he presented as a
subject of life insurance. Had Canilang disclosed his visits to his
doctor, the diagnosis made and medicines prescribed by such
doctor, in the insurance application, it may be reasonably as-
sumed that Great Pacific would have made further inquiries and
would have probably refused to issue a non-medical insurance
policy or, at the very least, required a higher premium for the
same coverage. The materiality of the information withheld by
Great Pacific did not depend upon the state of mind of Jaime
Canilang. A man’s state of mind or subjective belief is not capa-
ble of proof in our judicial process, except through proof of ex
 INSURANCE LAW REVIEWER 2018
ternal acts or failure to act from which inferences as to his sub-
jective belief may be reasonably drawn. Neither does materiality
depend upon the actual or physical events which ensure. Mate-
riality relates rather to the “probable and reasonable influence of
the facts” upon the party to whom the communication should
have been made, in assessing the risk involved in making or
omitting to make further inquiries and in accepting the applica-
tion for insurance; that “probable and reasonable influence of the
facts” concealed must, of course, be determined objectively, by
the judge ultimately.
What kind of concealment?
Material concealment.
Who has the right to determine whether the fact concealed
is material?
The judge/court
PACIFIC BANKING CORP vs. CA
It is not disputed that the insured failed to reveal before the loss
three other insurances. As found by the Court of Appeals, by
reason of said unrevealed insurances, the insured had been
guilty of a false declaration; a clear misrepresentation and a vital
one because where the insured had been asked to reveal but
did not, that was deception. Otherwise stated, had the insurer
known that there were many co-insurances, it could have hesi-
tated or plainly desisted from entering into such contract. Hence,
the insured was guilty of clear fraud
Undoubtedly, it is but fair and just that where the insured who is
primarily entitled to receive the proceeds of the policy has by its
fraud and/or misrepresentation, forfeited said right, with more
reason petitioner which is merely claiming as indorsee of said
insured, cannot be entitled to such proceeds..
Generally, the cause of action on the policy accrues when the
loss occurs, But when the policy provides that no action shall be
brought unless the claim is first presented extrajudicially in the
manner provided in the policy, the cause of action will accrue
from the time the insurer finally rejects the claim for payment
Since the required claim by insured, together with the prelimi-
nary submittal of relevant documents had not been complied
with, it follows that private respondent could not be deemed to
have finally rejected petitioner's claim and therefore there was
no cause of action.
It appearing that insured has violated or failed to perform the
conditions under No. 3 and 11 of the contract, and such violation
or want of performance has not been waived by the insurer, the
insured cannot recover, much less the herein petitioner.
TAN VS. CA
The so-called "incontestability clause" in the second paragraph
prevents the insurer from raising the defenses of false represen-
tations insofar as health and previous diseases are concerned if
the insurance has been in force for at least two years during the
insured's lifetime.
The "incontestability clause" added by the second paragraph of
Section 48 is in force for two years. After this, the defenses of
concealment or misrepresentation no longer lie.
DISCUSSION
Incontestability Period – 2 years
With this period, the Supreme Court presumed that the insur-
ance company will have enough time to do its investigation so
at least it can find out if there is some fraud or some concealment
that may be used for rescission of the contract. So 2-year period
is deemed sufficient. If the insurance company would fail to con-
duct the necessary investigation within that period provided by
law then that will be to its prejudice because it could no longer
now be allowed to rescind the contract of insurance or to deny
the claim based on any ground for concealment, misrepresenta-
tion, or in fact, kahit fraudulent concealment or misrepresenta-
tion.
So under the Insurance Law, even though a party committed
fraud, that party is not left without any remedy. Kung tutuusin,
generally, whenever concealment is attended with fraud, there
should no protection given.But here the Supreme Court said that
it’s not because we are giving premium or protection to the one
committing the fraud, but because precisely the insurance com-
panies are not allowed to just always collect the premium every
time they become the insurer…
When do you start counting the 2-year incontestability pe-
riod?
From the date of the issuance or from the date of the last rein-
statement, as the case may be.
So at the time the policy was issued, or in case there is rein-
statement, then we start counting the period from the date of the
last reinstatement.
In reinstatement, this scenario presupposes that the policy can
lapse, for example, due to non-payment f premium. But one of
the non-forfeiture options of the insured in a life insurance policy
is the so-called grace period given by the law. In life insurance
policy, it is automatic because it is the law itself which provides
that an insured is entitled to a grace period minimum of 30 days
or 1 month. So practically minimum,
 INSURANCE LAW REVIEWER 2018
Whenever you come across a question na whether a particular
period may be lessened by stipulation or extended by stipula-
tion, if ever you forgot what you memorized, you remember the
rationale behind it: whether it could prejudice or benefit the in-
sured or beneficiary.
Prime example, itong 2-year incontestability period, can it be
lessened by stipulation or can it be extended by stipulation?
S’yempre you cannot extend it because that would be contrary
to public policy because what the 2nd paragraph of section 48 is
very clear that that is the maximum period.
GROUP LIFE INSURANCE. A group life insurance is the kind
of insurance wherein there is only one policy that will be issued
covering several people (employees). There is only one Master
Policy and those individual insured will just be issued a certifi-
cate of participation. The policy holder in this Group Life Insur-
ance will be the employer.
All life insurance companies, as expected, have come up with
their promos or benefits and one of these is that they lessen the
2-year incontestability period. Is that allowed? Yes, because that
will be beneficial to the insured and the beneficiaries.
SUICIDE CLAUSE. There was a bar exam question before. Ang
tinanong : kumuha ng life insurance si Juan Dela Cruz 2 days
before his 60th birthday and then he committed suicide on his
62nd birthday. So ang tanong how long did the policy take effect
from the time of the issuance? 2 years and 2 days. So meaning
it is already beyond the 2-year period. So meaning in a suicide
clause or suicide scenario, the rule is also the 2 years. So if the
suicide was committed within or less than 2 years from the ef-
fectivity of the policy, then the insurer is not liable. But if the su-
icide was committed exactly 2 years that the policy was effective
or more than 2 years, then the insurer will be liable.
EXCEPTION. The exception to that rule na not liable if it is less
than 2 years, if the suicide was committed within less than 2
years, the insurer will not be liable if it can be shown that that
the suicide was committed during the state of insanity.
So do not forget that the incontestability period starts from the
date of the issuance of the policy if there is no reinstatement. If
there is reinstatement, especially if there are several reinstate-
ments, from the date of the last reinstatement.
IN CASE OF AMBIGUITY IN THE DATE OF REINSTATE-
MENT. In case there is ambiguity with regard the date of rein-
statement, apply the rule that in case of ambiguity, resolve it lib-
erally in favour of the insured and strictly against the insurer.
Precisely because it is the own doing of the insurance company
that there arose an ambiguity in the date of reinstatement.
CONCEALMENT
Must be concealment of a material fact.
Requisites: (Section 28)
1. A party knows the fact which he neglects to communicate or
disclose to the other;
2. Such party concealing is duty bound to disclose such fact to
the other;
3. Such party concealing makes no warranty of the fact con-
cealed; and
4. The other party has not the means of ascertaining the fact
concealed.
There is a duty on the part of the insured (applicant) to communi-
cate to the other in good faith all the facts which are material to
the insurance contract.
Section 27. A concealment whether intentional or unintentional
entitles the injured party to rescind a contract of insurance.
• The Insurer is not required to present proof to show the fraud-
ulent intent on the part of the insured.
Materiality
1. It is not determined by an event
2. It is not determined by the state of mind of the insured or
upon subjective belief
• Good faith is not a valid defense
• It would be almost impossible for the insurer to prove the
state of mind of the insured. It is to protect the insurer
against fraudulent claims, false policy holders or protect
the public in general.
3. It is not dependent upon the cause of the loss or cause of
the death.
• Even though the cause of death of Robert Bacani has
nothing to do with his previous ailment that he concealed,
it does not matter because materiality is not dependent
upon the cause of death. (Sunlife Assurance vs CA &
Spouses Bacani)
Determination of Materiality
• On the part of the insurer, if the knowledge of a fact would have
a “probable and reasonable influence upon the insurer in
assessing the risk involved and in making or omitting further
inquiries, and cause him either to reject the risk or to accept it
only at a higher premium rate or on different terms though that
fact may not even remotely contribute to the contingency upon
which the insurer would become liable.”
• There are no specific parameters that are provided under the
law that would say whether a fact is material or not because it
is determined upon the facts of the case.
• Materiality will be determined by the Judge/SC ultimately
(power to determine what would constitute a material fact).
INCONTESTABILITY PERIOD
• Insurer can use concealment as a ground when the policy is
contestable.
 INSURANCE LAW REVIEWER 2018
• After a policy of life insurance made payable on the death of
the insured shall have been in force during the lifetime of the
insured for a period of two years from the date of its issue or
of its last reinstatement, the insurer cannot prove that the pol-
icy is void ab initio or is rescindable by reason of the fraudulent
concealment or misrepresentation of the insured or his agent.
(Section 48, 2nd par)
- There is a seeming inequality with regard to the positions
of the insured and insurer. The insured, taking out a life
insurance policy for protection. The insurer, after accepting
the application and upon the death of the insured, they
would cancel the policy on the ground of technicalities. The
solution to this problem is the so called incontestability pe-
riod. (Tan vs CA)
- The period of 2 years is sufficient for the Insurer to conduct
investigations.
- Even though the concealment is fraudulent, it would still be
incontestable after 2 years.
• Purpose of the provision: It seeks to avoid unscrupulous insur-
ers in their act of collecting the premium without making any
investigations, then later on cancelling the policy.
• The start of the two year period shall be from the date of
issue or reinstatement. If there several reinstatements, it
would be from the date of the last reinstatement.
• In case of an ambiguity as to the reckoning period of the two
years, the Supreme Court said that it should be resolved liber-
ally in favor of the Insured. (Insular life vs PASCU) If exactly 2
years, the policy is already incontestable.
Reinstatement
• Lapse of the policy due to the non-payment of the premiums.
• The insured is entitled to a grace period of at least 30 days or
1 month. Such need not be stipulated in the policy as it is au-
tomatically granted to the Insured. It may, however, be ex-
tended by stipulation in the policy.
• The right of an Insured to the reinstatement of a lapsed policy
is a matter of privilege and not a matter of right. There would
usually be an increase in the premium upon reinstatement of
the policy.
“During the lifetime of the Insured”
• This phrase means that the policy is no longer effective at the
time of the death of the Insured. As a consequence, the In-
surer’s right to rescind can still be exercised even after the
death of the Insured, provided that the policy is still contestable
(within two years).
Ng Gan Zee vs Asian Crusader
• In this case, Kwong Nam indicated in the application that he
was operated on and even included the hospital. The Supreme
Court ruled that the Insurer has waived its right to information
by its neglect to make inquiries as to the facts already commu-
nicated. (Section 33)
• The insurer failed to make further inquiries as to the infor-
mation disclosed by Kwong Nam, knowing that such may be
material to the policy.
• “In the absence of evidence that the insured has sufficient
medical knowledge to enable him to distinguish between
“peptic ulcer” and “tumor”, the statement of the deceased that
said tumor was “associated with ulcer of the stomach” should
be construed as an expression made in good faith of his belief
as to the nature of his ailment and operation.”
Waiver of the right to information
1. Express - by the terms of the contract
2. Implied - by its neglect to make inquiries as to the facts al-
ready communicated
Representations of the facts are considered as the very founda-
tion of the contract. Hence, if such foundation is not present, the
contract is to be considered as void or inexistent.
Representation
• It must be done prior to the issuance of the policy and not af-
terwards. (Section 37) It can be altered or withdrawn before
the issuance of the policy. (Section 41)
• Representations are considered as mere collateral induce-
ments, and not part of the insurance policy. It is only stated in
the application form which is not included or attached in the
policy. The application form may, however, be used to rescind
the policy in case of misrepresentations.
• Rationale: To induce the Insurer to accept the application for
insurance.
• In case of conflict between representations and an ex-
press warranty, the express warranty would prevail as it is an
express provision in the policy. Representations, by their na-
ture, are mere collateral documents.
COVER NOTES (sec 52)
-Particularly applies to property insurance. Specifically in marine
insurance policy.
-Prior to issuance of policy, a cover note is issued.
-Cover note is already an insurance in itself.
-Primary intended to provide temporary coverage pending issu-
ance of policy.
-Don’t need separate premium or consideration because it does
not contain the particulars of the shipment in which the premium
is to be based.
BINDING RECEIPT
-does not insure by itself.
- Always subject to final action of insurance company in either
accepting or denying the application.
 INSURANCE LAW REVIEWER 2018
SEC 63 a condition, stipulation or agreement limiting the time for
commencing an action to a period of less than 1 year from the
time when the cause of action accrues is void.
-start counting 1 yr period from the time the cause of action ac-
crues.
- cause of action accrue from the time the insurer rejected the
claim since before a claim is rejected there is no necessity for
suit.
Premium payment
What is cash and carry rule? (sec 77)
No contract of policy of insurance shall be valid and binding un-
less and until the premium is paid.
Xcps to the cash and carry rule
1. It does not apply to life or industrial life insurance; applies to
non-life or property insurance only.
In life insurance- insured is automatically entitled to grace period
(Minimum of 30 days) though there is no stipulation to that effect.
The insured is entitled to such as a matter of law. It is a statutory
right.
- 30 days can be extended by stipulation
RULE: Can a period be extended or shortened by stipulation?
Yes. if it will be beneficial to the insured.
2. Whenever there is an express acknowledgment in the policy
of the receipt of premium. (sec 79)
That is conclusive evidence of payment but only insofar as to
make the policy binding. If on the other hand the issue is w/n the
premium had actually been paid, and the question is can the
company present evidence to that effect? Conclusive evidence
of payment can be used but to avoid unjust enrichment, insur-
ance company can present evidence to that effect and after
proving that no payment was actually received, then the com-
pany can collect premium payment
3. Parties have prior agreement to pay premium in installment.
(MAKATI TUSCANY)
Even though at the time of loss, the premium payment had not
been fully paid, insurer is liable provided there is already at least
an initial payment or down payment made by the insured.
4. Insured had been given a credit term extension (UCPB GEN)
Even though at the time of loss no premium payment had been
paid, but it was shown that loss happened within or prior the ex-
piration of the credit term extension granted, then insurer is lia-
ble.
Credit term extension cannot be more than 90 days
It applies whether the extension was given directly to the insured
or to a duly licensed intermediary under a broker or agency
agreement applying the doctrine of estoppel.
REFUND OF PREMIUM
LIFE INSURANCE
- no refund of premium.
-The moment a life insurance policy is issued, from day 1 the
insurer is exposed to risk of being liable under the policy upon
happening of contingent event, from that day the premium is
earned and refund is not possible.
- A life insurance policy is full, entire and indivisible by nature.
-Cash surrender value – starting the 3rd anniversary of the pol-
icy, it will start accumulating csv. CSV is just like dividends. It is
a value that will be accumulated in favor of the insured, which
insured can avail of later on. Insured may withdraw or apply for
a policy loan. And in the event of pre termination, the accumu-
lated csv will be given, but not as a refund of premium.
PROPERTY INSURANCE
When is insured not entitled to refund?
1.whenever the insured is guilty of fraud (sec 82) when policy is
annulled or rescinded
2. if it is a life insurance
When is the insured entitled to full refund?
1. whenever the breach of warranty would take place at the in-
ception of policy. It has the effect of preventing the policy from
attaching to the risk. Insurer was never exposed to any liability
under the policy (sec 76)
2.whenever by any default of the insured other than actual fraud,
the insurer never incurred any liability under the policy. Insurer
is deemed to not have earned the premium. Insurer is deemed
to have earned the premium to itself if it had exposed itself to
liability under the policy (sec 82)
3. No part of insured’s interest on the thing insured is exposed
to any of the perils insured against. Insurer was never exposed
to the risk of being held liable under the policy (sec 80)
EX: marine insurance policy. Insured against perils of naviga-
tion. Navigation did not push through. Since voyage never com-
menced. it just stayed in the port. Then insurer was never ex-
posed to any of the perils insured against. So insurer is deemed
not to earn the premium.
 INSURANCE LAW REVIEWER 2018
PARTIAL REFUND (SEC 80 b)
1. does not apply to life insurance.
2. Whenever the property insurance is for a definite period and
the insured would surrender or preterminate the policy before
the end of the period, without fraud on his part, the insured in
entitled to a pro-rata refund of his premium based on the unex-
pired portion of the premium.
If remote cause of the loss is covered by the policy, then the
insurer is not liable.
GR: Insurer is liable if proximate and immediate cause is cov-
ered by the policy.
XCP: Sec 88- allows insurer to limit or restrict its liability. Though
the immediate cause is covered, but proximate cause is ex-
pressly exluded, insurer won’t be liable

Ex: Fire insurance Policy for 1 year. Paid premium for 1 year
year. Pre-terminate 6 months. Can ask for a refund? Yes pro-
vided no fraud on part of the insured.
XCP to pro-rata refund: short period rate is agreed upon. Short
period rate ia about a table of matters and figures that would
show how much percentage of the premium may be refunded
depending on how old the policy was at the time it was pre-ter-
minated. If it is pre-terminated earlier, the higher the refund.
NOTICE OF LOSS
Sec 93 delay in presentation of notice of proof of loss is deemed
waived if it is due to the act of the insurer.
Example: fire insurance policy. Covered cause is fire. But there
is stipulation expressly excluding explosion. that if it is the prox-
imate cause, then insurer is not liable. If turn out after investiga-
tion that the proximate cause is explosion, then insurer is not
liable.
DOUBLE INSURANCE (95-96)
Whenever there is non-identity of insurable interest insured,
there is no double insurance.
Requisites
1. 2 or more in insurers insuring separately

If insurer omit to promptly and specifically object to the ground 2. identity of insurable interest
of delay, then it is deemed waived
3. identity of person insured
LOSS
4. identity subject matter
SEC 85 an agreement not to transfer the claim of the insured
3. identity of risk or peril insured against
against the insurer after the loss has happened is void for being
contrary to law and public policy particularly the law and policy
Not prohibited; merely discouraged cause might result in over
on free transmission of rights.
insurance
Fire insurance policy. Not until the peril insured against hap-
Sec 96 e- principle of contribution- in the event that there are
pens, the right of claim of the insured is merely speculative and
2 or more insurers, then each is liable pro-rata based on the
conjectural. If the fire happened, then the right to claim becomes
amount each is liable based on their respective contract.
vested, absolute and certain. And from that moment it is a prop-
erty right that can be transferred. Sec 97-100 Reinsurance

Sec 89- if the cause of the loss or damage is due to a willful or -Contract subsequently entered into between the original insurer
intentional act of the insured, then the insurer is not liable. and re-insurer. Not merely allowed but required in some in-
stances. This is for the original insurer to fully cover its risk of
In murder, even if intentional on the part of the assailant, it is not
liability.
intentional on the part of the insured and so insurer is still liable.
-Contract of reinsurance is separate and distinct from the con-
Sec 86,87,88- pertains to immediate, proximate and remote
tract of insurance
cause
-Original insured has no interest in the contract of re insurance.
PROXIMATE CAUSE-
Has no cause of action against the re insurer for lack of privity
of contract.
-the very cause. Were if not for the proximate cause, the imme-
diate cause wont happen.
Xcp: stipulation pour atrui
-that cause, which, in natural and continuous sequence, unbro-
Sec 99- contract of reinsurance is an example of liability or cas-
ken by any efficient intervening cause, produces the injury, and
ualty insurance. Because the subject matter being insured is the
without which the result would not have occurred.”
original insurer’s risk of liability to the original insured.
 INSURANCE LAW REVIEWER 2018
Indemnity against liability per se and not against actual payment. Sec 141 abandonment ¾ rule
The moment insurer becomes liable to insured, then re insurer
becomes liable for payment even though insured is not actually -insured is given the right to abandon the vessel if the value of
paid yet by the insurer. loss or damage sustained is more than ¾ of the total value of
the vessel
Sec 101 MARINE INSURANCE
-If there is more than ¾ damage, then insured can consider it as
4 possible subject matter: constructive total loss and may abandon his vessel. Thus, the
insurer now the new owner
1.Ship or hals

2.Cargo or goods to be shipped

3.Freight, earnings, commissions, profit
4.Marine protection and indemnity insurance (sec 101 b)- Also
a casualty or liability insurance. Subject matter is shipowner’s
risk of liability to third persons.
Perils of the ship vs perils of the sea
- If not an all risk policy, kind of perils covered is only perils of
the sea.
-Perils of the sea- Loss or damage must be due to extraordinary
violent waves of the sea or extraordinary violent actions of the
wind
Sec 159 CO-INSURER CLAUSE.
-Insured is considered as a co insurer of the property insured
Requisites (must concur)
1. when there is under insurance. Instance where property in-
sured is insured for a value less than its actual value. Allowed
but discouraged.
Prop worth 1m was insured for 500k only. Then insured is co
insurer of uninsured portion of 50%. So 250k lang makukuha
nya sa insurer.
2. when there is partial loss or damage

-Perils of the ship- ordinary wear and tear of vessel.
Marine all risk policy covers all risk except those expressly ex-
cluded by the policy
Sec 138- General average loss vs particular average loss
Applies automatically to every marine insurance policy. With or
without stipulation.
But in a fire insurance policy. Co insurer clause would only apply
if there is a stipulation to that effect

Whenever there is free from particular average loss in the policy,

insurer not liable if cause of loss is particular average loss

Insurer liable only from general average loss. This is based on

the equitable principle of contribution. Those who benefitted
from such should contribute for the payment of loss or damage

Jetison- intentional overthrowing of overboard of a particular part

of cargo to save vessel from huge waves.

REQUISITES OF JETISON

1.Vessel and cargo must be exposed to same peril

2. Sacrifice made was deliberate or under order of master or

authority of vessel

3. Must be successful

If jettison, then it safely reach destination, who would suffer the

loss of the jettison, all the others who are benefitted would have
to contribute. So insurer of all cargo owners and vessels must
contribute pro rata to compensate loss suffered by cargo which
was sacrificed deliberately.