Sue and labour. When a casualty occurs, the assured, in particular the master, is bound to take such measures as may be reasonable for the purpose of averting or minimising loss or damage of ship and cargo.
The expenses resulting from such action are recoverable from the underwriters under the “Duty of Assured Clause”. The object of this clause is that the master, acting on his own initiative and to the best of his knowledge, will immediately take all measures to protect underwriters’ interests. The consideration that the underwriters are anyhow liable for loss or damage should therefore play no part. The master should act as if the vessel was uninsured.
General average, and collision attack or defence costs, salvage charges, are not recoverable under the “Sue and Labour costs”. Only expenses properly and reasonably incurred for the purpose of averting or diminishing any loss resulting from a casualty occasioned by a peril covered by the policy are recoverable. Dry dock charges would not be recoverable.
Before 1983 “Sue and Labour” was an option under the old SG policy but a duty under the Marine Insurance Act (section 78). In the Institute Time Clauses (Hulls) 1983 it is now a duty to avert or minimise a loss.BLOG COMMENTS POWERED BY DISQUS