Define Both-to-Blame Collision Clause

Both-to-Blame Collision Clause

What Is a Collision Clause With Both Parties to Blame?

A both-to-blame collision clause is a provision in an ocean marine insurance policy that states that if a ship (vessel) collides with another due to both parties' negligence, the owners and shippers of both vessels must share in the losses in proportion to the monetary values of their cargo and interests prior to the collision. Losses must be paid by both the cargo owners and the business in charge of the transport.

TAKEAWAYS IMPORTANT

• A both-to-blame collision clause is an insurance policy provision that states that in the event of a ship collision caused by carelessness, both vessel owners must share liability.

• Marine insurance covers things like ship sinkings and collisions, but not things like wear and tear or war.

• According to the Hague-Visby Rules, a carrier is not responsible for claims stemming from an accident caused in part or entirely by negligent navigation provided the carrier has exercised reasonable attention in providing a seaworthy ship.

• The both-to-blame collision clause is intended to safeguard a carrier's Hague-Visby Rules protection by providing a contractual indemnity against cargo interests.

What Is a Both-to-Blame Collision Clause and How Does It Work?

The shipping business is growing in tandem with globalization. The company's liability, and hence risk, will be confined to ocean marine insurance in the case of an accident. A ship's loss is covered by an ocean marine insurance policy. It provides protection in the event that a ship's hull and/or cargo are damaged or destroyed.

• This insurance also provides the following benefits:

• The ship collides with another ship or item.

• The sinking, capsizing, or stranding of a ship.

• Fire, piracy, and abandonment (throwing overboard of property to save other property).

Barratry (deception or unlawful behaviour on the part of a ship's master or crew).

Wear and tear, humidity, rot, mildew, and war damage are not covered by the policy.

Particular Points to Consider

Article IV Rule 2(a) of the Hague-Visby Rules states that if the carrier has used reasonable attention in providing a seaworthy ship, they are not responsible for claims stemming from an accident caused in part or whole by negligent navigation.

 In most collisions, both boats are somewhat to blame, and cargo interests may pursue tort claims against the non-carrying vessel.

Claimants may collect the whole amount of their claims from the owners of the other vessel, who could then recover half from the carriers under US law. The navigational mistake defence is bypassed by this rule. It also means that if the carrying vessel is solely to blame, cargo interests will be unable to seek compensation. The both-to-blame collision clause is intended to safeguard a carrier's Hague-Visby Rules protection by providing a contractual indemnity against cargo interests.

Both-to-Blame Collision Clause Example

If Ship A collides with Ship B owing to Ship B's fault, the owner of any items in Ship A that are damaged or lost as a result of Ship B's negligence can sue the owners of Ship B for 100 percent of the damages.

Due to the Both-to-Blame Collision Clause, the owner of Ship B has the right to demand 50 percent of their liabilities from the owners of Ship A in circumstances where apportionment of blame is found to be 50/50.

This leaves Ship A with a bill for half the cost of the damage, which Ship A passes on to the goods' owner under the Bill of Lading's Both-to-Blame Collision Clause.