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⚓ '''Running down clause''' is a provision found in [[Definition:Marine insurance | marine hull insurance]] policies that extends [[Definition:Coverage | coverage]] to the shipowner's [[Definition:Liability | liability]] arising from a collision between the insured vessel and another ship. Without this clause, a standard hull policy would cover only physical damage to the insured vessel itself; the running down clause — sometimes abbreviated as RDC or referred to as a collision liability clause — fills the gap by indemnifying the insured for damages they become legally obligated to pay to the owner of the other vessel involved in the collision.

🔍 The clause typically covers three-fourths of the insured's collision liability, with the remaining one-fourth historically handled by the shipowner's [[Definition:Protection and indemnity club (P&I) | protection and indemnity (P&I) club]]. This three-fourths/one-fourth split is a longstanding convention in the [[Definition:London market | London market]] and international marine practice, though some modern policies offer full four-fourths coverage. The running down clause responds only to ship-to-ship collisions; damage caused to fixed or floating objects like docks, buoys, or piers falls outside its scope and is instead addressed by the P&I club or a separate [[Definition:Fixed and floating objects clause | fixed and floating objects]] provision. [[Definition:Underwriter | Underwriters]] carefully assess the vessel's trading routes, size, and operational history when pricing this exposure.

⚖️ From a practical standpoint, the running down clause is one of the oldest and most well-established liability extensions in insurance, tracing its roots to 19th-century [[Definition:Lloyd's of London | Lloyd's]] practice. It remains significant because maritime collisions can produce enormous third-party liabilities — vessel repair costs, [[Definition:Loss of use | loss of hire]], cargo damage claims from the other ship, and even [[Definition:Pollution liability | pollution]] response expenses in some formulations. For marine [[Definition:Insurance broker | brokers]] and [[Definition:Claims adjuster | claims adjusters]], understanding the precise boundaries of the running down clause — what triggers it, what it excludes, and how it interacts with P&I cover — is essential to ensuring shipowners are not left with uninsured gaps after a collision event.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Marine insurance]]
* [[Definition:Hull insurance]]
* [[Definition:Protection and indemnity club (P&I)]]
* [[Definition:Collision liability]]
* [[Definition:Lloyd's of London]]
* [[Definition:General average]]
{{Div col end}}

Definition:Running down clause - Revision history

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