5.5 World War II and the 1964 revision – marine and war as split insurances
The above presentation demonstrates that whereas the all-risk principle with its common insurance for marine and war perils appeared to be the principal cover, in reality, marine risks were covered but with exclusion for war risks and war risk was covered mutually by the ship owners during World War I, and from 1935 by the Norwegian War Risk Association. There was no “united” marine and war cover. This resulted in a lot of court cases during World War II dealing with the distinction between marine and war perils.(1) For instance ND 1942 p. 406 NA Heimvard, ND 1944 p. 113 NA Troma, ND 1945 p. 344 NA Dixie, ND 1946 p. 225 NA Anfinn, ND 1947 s. 465 NA Rogaland, ND 1948 p. 4 NA Storfjeld, see Bugge AfS nr. 1 p. 1 at pp. 14–15. In these cases, the organization of marine risk insurance with an all risk cover excluding war risk, as well as the named perils principle to define the war risk cover, could cause special difficulties, because legal interpretation principles and burden of proof rules would tend to widen the marine cover and narrow the war cover.(2)Motiver til Norsk Sjøforsikringsplan av 1964, Rederplanen, Det Norske Veritas 1964 (Motiver NMIP 1964), p. 16. One issue was whether the marine insurers had the burden of proving that a loss was not caused by war peril. This issue was solved by the Supreme Court in ND 1956 p. 129/Rt. 1956 p. 449, where the Supreme Court held that neither insurer should have the burden of proof, but instead used a division principle.
S/S Banan was damaged by fire in the bunker in Sydney, Nova Scotia, in November 1939. There was no information as to any war risk and it was presumed that the fire was caused by self-ignition. The marine insurer covered the damage. During and after the war, however, new information indicated that the damage was caused by German saboteurs having installed measures to cause fire in the tank. The assured claimed against the War Risk Association for cover for the franchise he had paid.
The Supreme Court stated that this was not a question of whether the damage was war damage as defined in NMIP 1930,(3) With reference to NMIP 1930 § 43 no 1 first sentence and § 42 no 2. but whether the fire was caused by a war peril.(4) With reference to NMIP 1930 § 43 no 1 second sentence and § 42 no 1, third sentence. The court also referred to the War policy cover for «Borgerlige uroligheter», which included cover for sabotage. However, the court presumed that the concept of «sabotage» referred to its traditional meaning, because war sabotage was not known when the Plan was written. War sabotage therefore had to be covered as an ordinary war peril.
The court further found that it was clear that the damage was caused either by a war peril or by a marine peril, but it was not possible to assess whether one peril was more likely to have caused the damage than the other. In this situation, it was natural to use an analogy of the regulation of division of liability in the event of a combination of causes.(5) See NMIP 1930 § 43 no 2 and § 42 no 3, which refers to the provisions in § 34 no 2 The liability was therefore divided between the insurers with 50% each.
Referring to this case, the Commentary to the 1964 Plan states that in spite of the formal organization of the two types of insurance, they should be seen as equal contracts of insurance.(6) Motiver NMIP 1964 p. 16.