Builders' Risk Insurance. Property and Personal Damage Liability.

    Thus far our discussion has referred to the underwriter's assumption of liabil- ity for loss or damage to the insured vessel. But another serious type of loss is the legal liability of the insured for payment of property or personal damages resulting from collision or other- wise. This risk the policy covers very fully in two important clauses, viz., the " Collision Clause " and the " Protection and Indemnity Clause."

    The collision clause has already been fully discussed in the article on Hull Insurance. With reference to hull risks, however, the underwriter's liability does not, as a rule, extend to any sum which the owner or charterer may become liable to pay with respect to the removal of obstructions under statutory powers, or for injury to harbors, wharves, piers, stages and similar structures, resulting from collision. Nor does the underwriter's liability extend to damage to cargo, or to loss of life or personal injury. In builders' risk insurance, the clause is made to cover the first contingency ; frequently an additional paragraph extends the underwriter's liability to loss of life and personal injury.

Five additional types of liability claims or special losses are assumed under the so-called " Protection and Indemnity Clause," a clause which is also found in many hull policies, but a detailed presentation of which has been deferred until this point because of its general use in builders' risk policies. All of these types of liability claims are again stated most comprehensively, and would seem to leave no loophole for evasion on the part of the underwriter. Stated in the order of their presentation in the policy, they are:

(1) " Loss of or damage to any other ship or boat or goods, merchandise, freight, or other things or interests whatsoever on board such other ship or boat caused proximately or otherwise by the ship insured in so far as the same is not covered by the running down clause set out above."

(2) " Loss of or damage to any goods, merchandise, freight, or other things or interests whatsoever other than aforesaid, whether on board the said steamship or not, which may arise from any cause whatever."

(3) " Loss of or damage to any harbor, dock (graving or otherwise), shipyard, way, gridiron, pontoon, pier, quay, jetty, stage, buoy, telegraph cable or other fixed or movable thing whatsoever, or to any goods or property in or on the same, however caused."

(4) " Any attempted or actual raising, removal, or destruction of the wreck of the insured ship, or the cargo thereof, or any neglect or failure to raise, remove, or destroy the same."

(5) Any sum for which the underwriter may become liable for causes not stated elsewhere in the policy, but which are recoverable from or undertaken by certain designated Associations, this liability, however, not to include loss of life and personal injury.

With reference to any of the foregoing matters, the underwriter agrees to assume any sum paid by the insured " in respect of any responsibility, claim, demand, damages, and / or expenses arising from or occasioned thereby " during the currency of the policy. But such payment is again conditioned on the principle of co-insurance. The underwriter, in other words, will pay such sum only in the proportion that the insurance taken bears to the policy value of the insured vessel. With the consent in writing of the majority of the underwriters on the vessel (in amount of the insurance) the insured may contest his liability under any of the foregoing heads. Should this be done the policy promises payment of the costs incurred by the insured, but again only in the proportion that the insurance bears to the value of the property.