Marine insurance for the 21st century: a quality obligation for insurers

Marine insurance is often treated as an exemplar of the pure commercial transaction, with no competing consumer-welfarist considerations to muddy the waters. However, this ignores a substantial volume of business for private and SME insureds in the form of yacht and commercial fishing vessels. Marine insurance is therefore a more nuanced environment than is often discussed. In this paper, we will consider one clear effect of this commercial model: the failure to develop substantive obligations on the supplier to ensure the service offered meets the customer's needs. This is in stark contrast to Sales transactions where the obligation on the seller to supply a product of 'satisfactory quality' has entered common parlance ('fit for purpose'). Insurance looks to protect the insurer from the customer, whereas Sales took the opposite approach. This paper builds on Schwarcz's model for insurance regulation as products liability (48 William & Mary Law Review 1389 (2007)) in light of the historical development of the 'warranty of quality' in the UK and US Sales law.