This means a loss (or damage) for which the underwriters would respond under the policy, thus reproducing the effect of section 78(3) of the Marine Insurance Act, which states:
“expenses incurred for the purpose of averting or diminishing any loss not covered by the policy are not recoverable under the Suing and Labouring Clause”.
A recent case concerned the measures taken by an assured to recover their property (containers) from the premises of their lessees who had gone bankrupt. The insurance was against all risks of loss or damage to the subject-matter insured, but the underwriters argued that the expense incurred by the assured had not been undertaken with the object of averting or minimising losses for which the insurers would have responded. The court held that when the lessees ceased to trade they were no longer capable of taking care as bailees of the plaintiffs property; consequently the plaintiff’s containers “were exposed to the risk of theft, misuse, enforcement of a lien in other words to the risk of loss or damage from some cause or another”. The court considered the extent of the measures taken by the assured to recover their containers, and the probability that in the absence of those measures, a loss would have occurred, and found in favour of the assured on both points. The assured were thus entitled to recover the payments which they had made in respect of customs and storage charges in order to secure the release of containers, the cost of their transshipment from where they lay to their own depots, the travelling expenses of those engaged in this operation and legal fees incurred in the same connection.
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