collision clause

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A clause in a marine insurance policy binding the underwriters to indemnify the insured in respect of any damages in tort he may be liable for as a result of his ship colliding with another. At common law, such a policy covers only the insured's physical losses. The clause is customarily restricted to three quarters of the damages in question. When two vessels collide, the damage done to each is added together and treated as a common loss. It is divided between insurers according to the proportion of blame attributable to each ship or, if this cannot be determined, equally.

Subjects: Law.

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