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¾ collision liability and ¼ collision liability

The Institute Time Clauses (Hulls) includes the Running Down Clause which covers only ¾ of the insured vessel’s collision liability. This cover is limited to damage to and property on board the third party vessel. The original intention of this limitation was to have the shipowner self-insure ¼ of his liability to encourage him to navigate carefully. However, present day practice is for the remaining ¼ collision liability to be insured under the Protection & Indemnity (P&I) extension to the marine hull policy. This principle applies to London Institute Clauses only and will vary under foreign clauses.

Ab initio

Latin term meaning “from the beginning”. Usually used in reference to contracts to indicate their existence or validity relates back to their creation like an (unlawful) contract ‘ab initio’. E.g. means the contract was void during its entire alleged existence.


Deliberate voluntary relinquishment of property or a right, normally because the expense involved in salvaging or recovering the property or right would be greater than its value once recovered or preserved. Also known as Constructive Total Loss.


An event or happening which is unforseen and unintended.

Accommodation Business

Insurance risks which are accepted by an insurer, not necessarily because the underwriter believes that they are a good underwriting proposition, but more to assist or support a broker whose relationship or volume of business the underwriter values.

Act of God

An event or happening which is generally considered as being beyond human control (earthquake, lightning, flood, cyclone or other natural event).



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