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CHAPTER 16 LIABILITIES

Marine Insurance: Law and Practice

CHAPTER 16

LIABILITIES

I COLLISION LIABILITY

16.1 The main object of hull insurance is to insure against loss of, or damage to, the insured vessel. However, the owner of the vessel may as a result of its use also sustain substantial losses by incurring liability to third parties. It was held in 1836 that such liability was “neither a necessary nor a proximate effect of the perils of the sea” and was, therefore, irrecoverable under the normal form of policy.1 Thus, it became common practice to cover such losses by a “running down clause”, today more commonly described as a collision liability clause.

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