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⚓ Running down clause is a provision found in marine hull insurance policies that extends coverage to the shipowner's liability arising from a collision between the insured vessel and another ship. Without this clause, a standard hull policy would cover only physical damage to the insured vessel itself; the running down clause — sometimes abbreviated as RDC or referred to as a collision liability clause — fills the gap by indemnifying the insured for damages they become legally obligated to pay to the owner of the other vessel involved in the collision.

🔍 The clause typically covers three-fourths of the insured's collision liability, with the remaining one-fourth historically handled by the shipowner's protection and indemnity (P&I) club. This three-fourths/one-fourth split is a longstanding convention in the London market and international marine practice, though some modern policies offer full four-fourths coverage. The running down clause responds only to ship-to-ship collisions; damage caused to fixed or floating objects like docks, buoys, or piers falls outside its scope and is instead addressed by the P&I club or a separate fixed and floating objects provision. Underwriters carefully assess the vessel's trading routes, size, and operational history when pricing this exposure.

⚖️ From a practical standpoint, the running down clause is one of the oldest and most well-established liability extensions in insurance, tracing its roots to 19th-century Lloyd's practice. It remains significant because maritime collisions can produce enormous third-party liabilities — vessel repair costs, loss of hire, cargo damage claims from the other ship, and even pollution response expenses in some formulations. For marine brokers and claims adjusters, understanding the precise boundaries of the running down clause — what triggers it, what it excludes, and how it interacts with P&I cover — is essential to ensuring shipowners are not left with uninsured gaps after a collision event.

Related concepts:

• Definition:Marine insurance
• Definition:Hull insurance
• Definition:Protection and indemnity club (P&I)
• Definition:Collision liability
• Definition:Lloyd's of London
• Definition:General average