123-126 Insurance Code

VOYAGE AND DEVIATION SEC. 125.
Deviation is a departure
from the course of the voyage
insured, mentioned in the last two (2)
Section 123. When the voyage sections, or an unreasonable delay in
contemplated by a marine insurance pursuing the voyage or the
policy is described by the places of commencement of an entirely
beginning and ending, the voyage different voyage.
insured in one which conforms to the
course of sailing fixed by mercantile Kinds of Deviation
usage between those places. 1. Proper Deviation
2. Improper Deviation
Section 124. If the course of sailing is
not fixed by mercantile usage, the Marine Insurance is unique in that it has
voyage insured is that way between certain implied warranties. One of which
the places specified, which to a is provided in Section 125.
master of ordinary skill and
discretion, would mean the most Implied Warranty Against Improper
natural, direct and advantageous. Deviation – Unreasonable delay in
pursuing the voyage; or the
commencement of an entirely different
Route - the route that a vessel should voyage.
take is governed by Sections 123 and
124 of the Insurance Code.
How to determine the course of the
voyage? SEC. 126. A deviation is proper:
The course of the voyage shall be (a) When caused by circumstances

determined in the following order: over which neither the master nor the
owner of the ship has any control;
1. The course agreed upon by the
parties;
(b) When necessary to comply with a
2. If nothing was agreed upon, one warranty, or to avoid a peril, whether
which conforms to the course of sailing or not the peril is insured against;
fixed by mercantile usage;
(c) When made in good faith, and
3. If there is no mercantile usage, one upon reasonable grounds of belief in
which a master of ordinary skill and its necessity to avoid a peril; or
discretion would find to be the most
natural, direct and advantageous. (d) When made in good faith, for the
Note: Any departure from the course of purpose of saving human life or
voyage insured, mentioned in Sections relieving another vessel in distress.
123 and 124 of the Insurance Code is
called deviation.
Proper Deviation
Answer:
a. Due to circumstances outside the No, because no reasonable ground
control of the master or ship for avoiding a peril existed at the
owner; time of the deviation
b. Done to comply with warranty or
to avoid a peril whether or not the Example No. 2:
peril is insured against “X”, a master of the vessel, received
c. Made in good faith, and upon a an advice from PAG-ASA that a
reasonable ground of belief in its typhoon is approaching the course
necessity to avoid the peril; and pursued by the vessel. Relying
d. Made in good faith, for the thereon, the vessel changed course
purpose of saving human life or and was damaged thereafter. It
relieving another distressed turned out that PAG-ASA was
vessel. wrong. Can the insurer deny the
claim?
Improper deviation
Answer:
Every deviation not specified under No. There was a proper deviation in
Sec. 126 is improper (Sec. 127, this case because the master acted
Insurance Code). in good faith relying on the
information of PAG-ASA.
NOTE: In improper deviation, an
insurer is not liable for any loss
happening to the thing insured Example No. 3 (Bar 2005):
subsequent to an improper deviation
(Sec. 128, Insurance Code). On a clear weather, MV Sundo,
carrying insured cargo, left the port
Effect in case of loss or injury: Insurer is of Manila bound for Cebu. While at
still liable, as if there was no deviation. sea, the vessel encountered a
strong typhoon forcing the captain to
Example No. 1 (Bar 2011): steer the vessel to the nearest island
T, the captain of MV Don Alan, while where it stayed for 7 days. The
asleep in his cabin, dreamt of an vessel ran out of provisions for its
Intensity 8 earthquake along the passengers. Consequently, the
path of his ship. On waking up, he vessel proceeded to Leyte to
immediately ordered the ship to replenish its supplies.
return to port. True enough, the
earthquake and tsunami struck three a) Assuming that the cargo was
days later and his ship was saved. damaged because of such deviation,
Was the deviation proper? who between the insurance
company and the owner of the cargo to Manila. Empire Assurance
bears the loss? Explain. Company (Empire) is the insurer of
the lost cargoes loaded on board the
b) Under what circumstances can a vessel which were consigned to
vessel properly proceed to a port Debenhams Company. After it
other than its port of destination? indemnified Denbenhams, Empire
Explain. as subrogee filed an action for
damages against CSC.
Answer:
a) The insurance company should Assume that the vessel was
bear the loss. Since the deviation seaworthy. Before departing, the
was caused by a strong typhoon, it vesse was advised by the Japanese
was caused by circumstances Meteorological Center that it was
beyond the control of the captain, safe to travel to its destination. But
and also to avoid a peril whether or while at sea, the vessel received a
not insured against. Deviation is report of a typhoon moving within its
therefore proper. general path. To avoid the typhoon,
the vessel changed its course.
b) A vessel can properly proceed to However, it was still at the fringe of
a port other than its port of the typhoon when it was repeated hit
destination in the following cases: by huge waves, foundered and
eventually sank. The captain and the
1. When caused by
crew were saved except 3 who
circumstances over which neither
perished. Is CSC liable to Empire?
the master or the owner of the ship
Explain.
has any control;
2. When necessary to comply
with a warranty, or to avoid a peril,
whether or not the peril is insured Answer:
against; No, CSC is not liable to Empire. The
3. When made in good faith, doctrine of proper deviation is
and upon reasonable grounds of applicable in this case. The change
belief in the necessity to avoid peril; of course made by the vessel is
4. When made in good faith for proper as it was to avoid the typhoon
the purpose of saving human life or and the huge waves which are
relieving another vessel in distress. considered perils of the sea. (BAR
2008)
Example No. 4 (Bar 2008):
On October 30, 2007, M/V Pacific, a

Philippine registered vessel owned
by Cebu Shipping Company (CSC),
sank on her voyage from Hong Kong

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VOYAGE AND DEVIATION SEC. 125.

The course of the voyage shall be (a) When caused by circumstances

On October 30, 2007, M/V Pacific, a

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