What Is a Both-to-Blame Collision Clause?
Let me explain what a both-to-blame collision clause really is. It's a key provision in ocean marine insurance policies. If two ships collide because both operators were negligent, you as the owner or shipper have to share the losses based on the value of your cargo and interests before the incident. This means both cargo owners and the shipping company end up paying for the damages.
Key Takeaways
You need to know that marine insurance covers events like ship sinkings or collisions, but it doesn't include wear and tear or damages from war. Under the Hague-Visby Rules, if a carrier has done their due diligence to make the ship seaworthy, they're not liable for collisions caused partly or fully by negligent navigation. The both-to-blame collision clause is there to maintain the carrier's protections under these rules by providing a contractual indemnity against claims from cargo interests.
How a Both-to-Blame Collision Clause Works
As globalization expands, so does the shipping industry, and in a collision, a company's liabilities are capped by their ocean marine insurance. This type of insurance covers losses for ships, protecting against damage or destruction to the hull or freight.
It also includes protections for collisions with other ships or objects, sinking, capsizing, stranding, fire, piracy, jettisoning, and barratry—which is fraud or illegal acts by the crew. But remember, it doesn't cover damage from wear and tear, dampness, decay, mold, or war.
Special Considerations
The Hague-Visby Rules state that if you've exercised due diligence as a carrier to provide a seaworthy ship, you're not liable for claims from collisions caused by negligent navigation, as per Article IV Rule 2(a). Often, both vessels share blame in a collision, and cargo interests might then file tort claims against the non-carrying vessel.
In U.S. law, claimants can recover full damages from the other vessel's owners, who can then seek half back from the carriers. This bypasses the navigational error defense and creates issues where cargo can't recover if their own vessel is fully at fault. That's why the both-to-blame collision clause exists—to preserve carrier protections under the Hague-Visby Rules through contractual indemnity against cargo interests.
Example of Both-to-Blame Collision Clause
Consider this scenario: If Ship A collides with Ship B due to Ship B's fault, the owner of goods on Ship A damaged by that fault can claim 100% from Ship B's owners.
But with the both-to-blame collision clause, if blame is split 50/50, Ship B's owner can claim 50% of their liability back from Ship A's owners. This leaves Ship A covering half the cost, which they then pass on to the goods' owner through the clause in the bill of lading.
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