California Property & Casualty Broker-AgentMiscellaneousHard
An ocean marine hull policy covers damage to the vessel itself. Which of the following losses would typically be covered under a 'collision clause' within such a policy?
- ADamage to the vessel caused by cargo shifting during a storm.
- BDamage to another vessel caused by the insured vessel's negligence.
- CDamage to the vessel caused by striking a submerged rock.
- DDamage to the insured vessel caused by an internal engine explosion.
Show answer & explanationAnswer & explanation
Correct answer: B. Damage to another vessel caused by the insured vessel's negligence.
A 'collision clause' (also known as the 'running down clause') in an ocean marine hull policy specifically covers the insured vessel's legal liability for damage caused to another vessel due to a collision. It does not cover damage to the insured vessel itself from striking objects.
Why the other options are wrong
- A. Damage from shifting cargo is typically covered under 'perils of the sea' or 'heavy weather', not a collision clause.
- C. Striking a submerged rock is typically covered under 'stranding' or 'perils of the sea', not the collision clause, which is for liability to other vessels.
- D. An internal engine explosion is usually covered under 'perils of the sea' or a machinery breakdown clause, not a collision clause.
Collision Clause (Running Down Clause)
A specific clause in an ocean marine hull policy that covers the insured vessel owner's legal liability for damage caused to another vessel as a result of a collision.
- Provides liability coverage for damage to other vessels.
- Does NOT cover damage to the insured vessel itself from the collision.
- Often subject to a deductible and specific limits.
Memory trick: Hull policies cover our ship, but Collision covers the other ship's slip.