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⚓ '''Collision liability clause''' is a provision within a [[Definition:Marine hull insurance | marine hull insurance]] policy that extends coverage to the shipowner's legal liability arising from a collision between the insured vessel and another vessel. Often referred to as the "Running Down Clause" (RDC) in traditional London market terminology, this clause bridges hull insurance and [[Definition:Liability insurance | liability insurance]] by covering the insured's obligation to compensate the owner of the other vessel for physical damage sustained in the collision. Without this clause, a standard hull policy would only respond to damage to the insured's own ship, leaving the shipowner exposed to potentially catastrophic third-party claims.

🔧 Under most standard hull policy forms — including the [[Definition:Institute Time Clauses | Institute Time Clauses (Hulls)]] used widely in the London and international markets — the collision liability clause typically covers three-quarters of the insured's liability to the other vessel, with the remaining one-quarter traditionally covered by the shipowner's [[Definition:Protection and indemnity insurance (P&I) | protection and indemnity (P&I) club]]. This three-quarters / one-quarter split is a long-standing market convention, though some policies can be negotiated to provide four-fourths collision liability coverage, eliminating the need for the P&I club to respond. The clause usually applies only to vessel-to-vessel collisions and typically excludes liability for cargo on the other vessel, personal injury, pollution, and damage to fixed or floating objects such as piers and buoys — those exposures fall within the domain of [[Definition:Protection and indemnity insurance (P&I) | P&I]] coverage. Disputes over collision liability often involve complex questions of maritime law, apportionment of fault, and cross-liabilities, particularly in multi-vessel incidents.

🌊 The collision liability clause is one of the oldest and most structurally important features of [[Definition:Marine insurance | marine insurance]], reflecting the historical reality that vessel collisions generate both first-party damage and significant third-party exposure. Its continued relevance in modern marine underwriting highlights the distinctive way hull and liability risks interrelate in the maritime sector — a structure quite different from, say, property and casualty insurance on land, where first-party and third-party coverages are typically written on separate policies. For [[Definition:Underwriter | underwriters]], the clause requires careful coordination with P&I clubs to avoid gaps or overlaps in coverage, and for shipowners, understanding the interplay between hull collision liability and P&I protection is essential to ensuring a seamless insurance program. As vessel sizes and values continue to grow, particularly in the container and LNG carrier segments, the financial stakes of collision incidents — and thus the importance of this clause — have escalated correspondingly.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Marine hull insurance]]
* [[Definition:Protection and indemnity insurance (P&I)]]
* [[Definition:Institute Time Clauses]]
* [[Definition:Marine insurance]]
* [[Definition:General average]]
* [[Definition:Admiralty law]]
{{Div col end}}

Definition:Collision liability clause - Revision history

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