Page 40 - The Insurance Times January 2025

passed the Great Ormeshead on the same evening, the boat Mills contended the company misled him by withholding vital
suddenly caught fire. The fire further escalated, as the boil- information about the clause. He demanded the court com-
ers had some lack of water supply which turned them red pel the insurer to deliver a valid policy and pay £6,000 to
hot and ignited the coal simultaneously. cover both vessels. Parallel action was also taken against
Albion's parent company, Eagle Insurance Company.
Soon, the fire had spread to the cabin and deck of the ves-
sel. Despite this, the Captain and the crew got her to the Legal Proceedings and Arguments
creek of Cemaes, near Amlwch, Wales. Fortunately, all the Albion Insurance argued their policy was compliant with the
passengers, crew and the captain were safe ashore. At- 1720 Bubble Act (6 Geo. I. c. 18), which restricted sea insur-
tempts were made on September 28, 1821 to salvage the
ance to two designated companies: Royal Exchange Assur-
vessel, but a gale made her a total wreck.
ance and London Assurance. They asserted their contract only
covered the vessels in port or harbor and not at sea. How-
In the month of July, 1820, the managing owner William ever, the statute's applicability became a contentious point,
Mills of the steamboat 'The Robert Bruce', applied for an as the policy was formed in Scotland but executed in London.
insurance policy to Thomas Hamilton, who was working as
the agent for the Albion company for an insurance of £3000
Mills' legal team relied on certificates issued by the Glasgow
for himself, other co-owners and for each of the said steam
agent, correspondence with Albion, and verbal assurances,
boats.
asserting the premium paid was equivalent to full risk cov-
erage. They highlighted that Albion had failed to deliver a
In 1820, William Mills, managing owner of the steam vessel
policy detailing the sea exclusion until after the claim was
Robert Bruce, secured an insurance policy worth £3,000
made, further undermining their position.
through Albion Fire and Life Insurance Company's agent,
Thomas Hamilton. The policy stipulated coverage for the The Judge-Admiral acquitted Albion Insurance, citing insuf-
vessel and another steamboat, Superb. However, it included ficient evidence to convict them under statutory provisions.
a critical clause excluding coverage while the vessels were However, the case escalated to the Court of Session, which
at sea, which was not disclosed to Mills or other owners until supported Mills' arguments, disallowing Albion's exceptions.
after the Robert Bruce was lost to a fire at sea in 1821.
The jury returned a verdict in favor of Mills, fixing damages
at £3,000. The Court of Session upheld this verdict, deem-
In June 1821, Mills renewed the insurance, paying the re-
ing it final under statutory terms.
quired premium. Despite this, the altered clause excluding
fire at sea remained undisclosed. Following the vessel's de- House of Lords Ruling
struction, Mills filed a claim for the insured sum. Albion In-
surance refused, citing the exclusion clause, and offered the Albion Insurance appealed to the House of Lords, empha-
policy that specified the exclusion. Mills rejected it, arguing sizing that the 6 Geo. I. c. 18 statute prohibited their cov-
he was entitled to a policy without such exclusions and ini- erage for fire at sea and that the contract's jurisdictional
tiated legal action. nuances placed it under English law. The Lords dismissed the
appeal, ruling the statute's prohibitive scope did not extend
to Scotland in this case. The distinction between English and
Scottish jurisdictions played a pivotal role in affirming the
Court of Session's decision.

Implications of the Case
The case underscored several critical aspects of insurance
law:
1. Territorial Jurisdiction: Determining which legal stat-
utes govern contracts formed across jurisdictions is vi-
tal. The ruling reinforced that Scottish legal principles
governed contracts formed there, even if executed else-
where.

36 January 2025 The Insurance Times