Abandonment In The Shallow Marine Insurance System

A contract of marine insurance is essentially a contract of indemnity in the sense that the underwriter undertakes to indemnify the assured for losses within the terms of the contract. Closely associated with this feature of marine insurance are the notions of constructive total loss and abandonment. This thesis will give a general introduction of abandonment which is a unique legal system in marine insurance law and will assess some difficulties which may arise during an exercise.There is a constructive total loss where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable, or because it could not be preserved from actual total loss without an expenditure which would exceed its value when the expenditure had been incured. Where there has been a constructive total loss, the assured is entitled to abandon the subject-matter to the insurer and claim for a total loss.The assured intimates to the insurer that he abandons by giving him "notice of abandonment", which will not avail the assured to enable him to turn a partial loss into a constructive total loss, if the thing insured has been abandoned in circumstances which cannot be justified. Notice of abandonment is generally needed in every case where the thing insured still exists, though in some cases it is not necessary.The notice need not be in any special form, but it should be unmistakable in its terms and also absolute and unconditional. The assured abandons at his own risk, and there is no duty on the insurer to accept or reject the abandonment. Once the notice has been accepted, the abandonment is irrevocable. Various rights are given to the insurers where the property has been validly abandoned.Based on the principle of indemnity the assured should not seek profits through the occurrence of the perils insured against. When the assured chooses to abandon and obtain in return ail indemnity, the assured should transfer all the property rights attached to whatever remains of the subject-mater insured. Otherwise the assured gets unjust enrichment. Chapter Four provides a penetrating study of the time and content of such transfer...