Definition:Both to blame collision clause
⚓ Both to blame collision clause is a contractual provision inserted into marine cargo insurance policies and bills of lading to protect cargo owners from an anomaly in U.S. admiralty law that could otherwise leave them bearing a portion of collision losses for which they were entirely blameless. Under the American rule of divided damages — which historically applied before the U.S. Supreme Court's adoption of proportional fault — when two vessels collided and both were at fault, each vessel bore half the total damage regardless of the degree of fault. Cargo owners on one vessel could recover from the non-carrying vessel but might then find that the non-carrying vessel's owner sought contribution from the carrying vessel, which would in turn pass the cost back to the cargo interests through the contract of carriage. The both to blame collision clause was devised to close this circular gap.
🔄 The clause operates by requiring the cargo owner to indemnify the carrying vessel's owner if the cargo owner recovers collision damages from the non-carrying vessel and that recovery is then used as a basis for the non-carrying vessel to claim contribution from the carrier. In practical terms, this means the cargo underwriter — rather than the cargo owner — ultimately absorbs the financial consequence, because standard cargo policies cover the insured's liability under the both to blame collision clause. The clause is specific to trade routes and contracts subject to U.S. law; in jurisdictions that follow proportional fault principles — as most do outside the United States — the anomaly does not arise in the same way. Nevertheless, because so many international voyages involve U.S. ports or are governed by contracts incorporating American legal provisions, the clause appears routinely in cargo policies written across global markets, including those placed in Lloyd's, Singapore, and Continental European hubs.
📌 For cargo underwriters, the both to blame collision clause represents an additional layer of exposure embedded within what might otherwise appear to be a straightforward transit risk. When evaluating a cargo portfolio, particularly one concentrated on U.S. trade lanes, underwriters must account for the possibility that collision events trigger indemnity obligations under this clause. From a claims handling perspective, the involvement of multiple vessels, multiple liability regimes, and potential subrogation recoveries makes both-to-blame scenarios among the more legally complex marine cargo claims. The clause also illustrates how differences in national maritime law create specialized insurance solutions — a recurring theme in international marine underwriting where policy wordings must bridge divergent legal systems.
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