Sharp v Sphere Drake Insurance plc (The Moonacre): 1992

S, a retired businessman, had bought a vessel and insured it in his name, but registered it in the name of company, R. In the winter, the boat was laid up, but occupied by a workman who maintained it and kept it secure. The boat was destroyed by a fire. The insurers argued that S had no insurable interest in the vessel, albeit by agreement with R he was entitled to exclusive use and control of the vessel. They also argued that it was used as a houseboat which was covered by an exclusion, and further that there had been non-disclosure on renewal of a theft from the boat, and that the signature on the application had been misrepresented as that of the insured.
Held: The insurance claim was dismissed. The theft was not sufficiently serious to necessitate disclosure. The false signature would have undermined the claim.
The boat was off-risk whilst being used as a houseboat, even if by a crew member.
The broker was liable to S, as it was the professional duty of a non-specialist broker to advise that the underwriters be told if anyone was living in the vessel and the broke should not have provided the misleading signature.
The agreement enabled the Judge to distinguish Macaura because S had an insurable interest in the vessel as he would benefit from its preservation and suffer loss of a valuable benefit if it were lost or destroyed.
There was no third category of contracts of insurance which were not wagering contracts but were unenforceable for want of an insurable interest. The 1906 Act expressly provides that an interest at the time of loss is necessary but not at the time the insurance is effected (section 6).
Mr A D Colman QC
[1992] 2 Lloyds Rep 501, [1993] CLY 3614
Marine Insurance Act 1906 6
England and Wales
DistinguishedMacaura v Northern Assurance Company Limited HL 1925
Macaura owned the large majority of shares in a limited company, trading in timber. The company also owed him substantial sums. He kept on the insurance of timber and other assets within the business but in his own name. When he came to claim, his . .

Cited by:
CitedFeasey v Sun Life Assurance Company of Canada and Another: Steamship Mutual Underwriting Association (Bermuda) Ltd v Feasey ComC 17-May-2002
The fact that there was more than one insurance policy in place for the same interest would not preclude a claim under one of them. A mutual underwriting group insured members against personal injury and so forth through ‘lineslip’ policies. The . .
ApprovedGlengate-KG Properties Ltd v Norwich Union Fire Insurance Society Ltd and Others CA 12-Jan-1996
NU the insurer of a consequential loss insurance policy, appealed against the decision, on a claim brought by G, the owners of a property under redevelopment, which had suffered a fire as to G’s resultant loss of rental income from the property. The . .
CitedGE Frankona Reinsurance Ltd v CMM Trust No.1400 (the ‘Newfoundland Explorer’) AdCt 22-Mar-2006
The owner sought to claim under his insurance policy. The yacht was, in the policy warranted to be fully crewed at all times. The owner had left the boat to return a few hours later when it was found on fire.
Held: The insurance claim failed. . .

These lists may be incomplete.
Updated: 11 July 2021; Ref: scu.184481