2025 Both-To-Blame Collision Clause Explained: Costs & Key Insights

Julia Kagan is a financial and consumer journalist, formerly senior editor for personal finance at Investopedia.

Understanding the Both-To-Blame Collision Clause in 2024

The Both-To-Blame Collision Clause is a critical provision in ocean marine insurance policies that mandates shared financial liability between two shipowners when a collision occurs due to negligence on both sides. This clause ensures that losses are divided fairly, reflecting the value of cargo and interests involved before the incident.

What Does the Both-To-Blame Collision Clause Mean?

This clause applies when two vessels collide, and both captains or owners are found negligent. Instead of one party bearing all costs, the clause requires both shipowners and cargo proprietors to split the losses proportionally. This shared responsibility helps mitigate financial risks in maritime transport.

Essential Highlights

• Both shipowners share liability if negligence by both parties causes a collision.
• Marine insurance covers damages like collisions, sinking, piracy, and fire but excludes wear and tear or war-related damages.
• The Hague-Visby Rules protect carriers from liability if they exercised due diligence to maintain seaworthiness.
• The clause provides contractual indemnity to carriers, preserving their protections under international maritime law.

How the Clause Functions in Modern Shipping

As global trade expands, the frequency and complexity of maritime incidents rise. Ocean marine insurance, including the Both-To-Blame Collision Clause, limits company liabilities by covering hull damage and freight losses. It protects against collisions, sinking, capsizing, piracy, and other maritime perils, but excludes damages from natural deterioration or warfare.

Coverage Details Include:

• Collision with other vessels or objects
• Sinking, capsizing, or grounding
• Fire and piracy incidents
• Fraudulent acts by ship’s master or crew (barratry)

However, damages from wear, mold, or war are explicitly excluded.

Legal Framework and Special Considerations

Under the Hague-Visby Rules, carriers are not liable for collisions caused partly or wholly by negligent navigation if they exercised due diligence. Typically, both vessels share blame, and cargo owners may seek compensation from the non-carrier vessel. U.S. law allows full recovery from the other vessel’s owner, who can then claim half from the carrier, balancing liabilities fairly.

The Both-To-Blame Collision Clause safeguards carriers by providing contractual indemnity against cargo claims, maintaining legal protections and ensuring equitable loss distribution.

Practical Example of the Clause in Action

Imagine Ship A collides with Ship B due to Ship B’s fault. The owners of Ship A’s cargo can claim full damages from Ship B’s owners. But if fault is split 50/50, Ship B’s owner can recover half their liability from Ship A’s owner.

Consequently, Ship A is responsible for half the damages and passes this cost to its cargo owners through the clause in the Bill of Lading, ensuring all parties share the financial burden proportionally.

Discover the latest news and current events in Insurance as of 27-11-2021. The article titled " 2025 Both-To-Blame Collision Clause Explained: Costs & Key Insights " provides you with the most relevant and reliable information in the Insurance field. Each news piece is thoroughly analyzed to deliver valuable insights to our readers.

The information in " 2025 Both-To-Blame Collision Clause Explained: Costs & Key Insights " helps you make better-informed decisions within the Insurance category. Our news articles are continuously updated and adhere to journalistic standards.