Article 304 of the Saudi Commercial Maritime Law
المادة 304 من النظام البحري التجاري · الفصل الأول: الأحكام العامة
The article provides that where a risk is insured with several insurers in one contract, each is liable in proportion to his share of the sum insured and within that share, without joint liability among them.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا كان الخطر مؤمناً منه في عقد واحد من عدة مؤمنين التزم كل منهم بنسبة حصته في مبلغ التأمين، وفي حدود هذه الحصة من غير تضامن بينهم.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 304 explained in plain English
A risk may be large, so several insurers in one contract share in insuring it, for example several insurance companies together covering a large ship. This article sets the obligation of each of them:
- In proportion to his share: each insurer is liable in proportion to his share of the sum insured.
- Within his share: he cannot be asked for more than his share.
- Without joint liability: the insured may not ask any one of them for the whole sum.
If damage occurs, the insured goes to each insurer for the amount of his share. No insurer bears what belongs to another.
Note that this article concerns a single contract in which several insurers take part. Where the risk is insured under several contracts whose total exceeds the true value, this is regulated by Article 305, which allows the insured to claim against whichever insurer he chooses within the limits of the damage and not exceeding the true value, and requires him to declare the other insurances he knows of. Article 303 voids insurance concluded after the things were lost or arrived in specified cases.
Practical example
A ship was insured in one contract with three insurance companies in shares of 50%, 30% and 20%. If insured damage occurs, each company is liable in proportion to its share and within it, so the owner cannot claim the whole compensation from the first company.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentCommercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
Ibrahim Al Salem Law Firm
Active contributor
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Frequently asked questions about Article 304 of the Saudi Commercial Maritime Law
If several insurance companies take part in one contract, how is compensation paid?
Each insurer is liable in proportion to his share of the sum insured and within that share.
Can one company be asked for the whole compensation?
No. The article provides that there is no joint liability among the insurers in this case.
More articles on Marine Insurance
- Article 139
Ships carrying the Kingdom's nationality are not permitted to sail to areas dominated by the dangers of war, piracy or armed robbery until proof of insurance of their crew against these dangers is provided.
لا يصرح للسفن التي تحمل جنسية المملكة بالسفر إلى المناطق التي تغلب عليها أخطار الحرب, أو أعمال القرصنة أو السطو المسلح, إلا بعد تقديم مالكها أو مجهزها أو مستأجر
- Article 215
Any agreement made before the incident that exempts the carrier from liability for loss of or damage to the goods, alters the burden of proof placed on him, or assigns to him the rights arising from cargo insurance is void.
يقع باطلاً كل اتفاق يتم قبل وقوع الحادث الذي نشأ عنه الضرر, ويكون موضوعه أحد الأمور الآتية: 1- إعفاء الناقل من المسؤولية عن هلاك البضائع أو تلفها. 2- تعديل عبء
- Article 236
The carrier must hold insurance or a guarantee from a recognized body covering its liability for death and bodily injury, and the injured party may claim directly against the insurer or guarantor.
يجب أن يكون لدى الناقل تأمين أو ضمان من جهة معترف بها، لتغطية مسؤوليته عن الوفاة والإصابات البدنية. وفي هذه الحالة يجوز للمتضرر الرجوع المباشر على المؤمن أو الض
- Article 293
The article provides that the maritime insurance provisions apply to an insurance contract covering maritime risks, without prejudice to the Law on Supervision of Cooperative Insurance Companies.
دون إخلال بالأحكام الواردة في نظام مراقبة شركات التأمين التعاوني, تسري أحكام هذا الباب على عقد التأمين الذي يكون موضوعه تغطية الأخطار البحرية.
- Article 294
The article requires a maritime insurance contract and any change to it to be proved in writing, sets the particulars of the insurance policy, and makes a provisional policy binding on both parties until the final policy is issued.
1- لا يثبت عقد التأمين وكل ما يطرأ عليه إلاَّ بالكتابة. 2- يصدر بموجب عقد التأمين وثيقة تأمين تتضمن البيانات الآتية: أ- تاريخ عقد التأمين ومكانه. ب- اسم المؤمِّ
- Article 295
The article allows a maritime insurance policy to be issued in the name of the insured, to his order or to bearer, and gives its lawful holder the right to claim compensation, subject to the insurer's defenses against the insured.
1- تكون وثيقة التأمين باسم المؤمن له أو لأمره، أو لحاملها. 2- يكون لحامل الوثيقة الشرعي الحق في المطالبة بالتعويض, وللمؤمِّن أن يحتج في مواجهته بالدفوع التي يجو
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.