Exculpatory and Benefit of Insurance Clauses in Towage and Pilotage

Although tug operator's attempts to shift their liability to the towed vessel through exculpatory clauses have mostly failed, they have generally succeeded in transferring their liability to the tow's insurers through “benefit of insurance” clauses. This Article first examines the history of exculpatory clauses in towage contracts in the twentieth century, demonstrating that American courts have not enforced them. Next, the Article explores the “pilotage” clauses which the courts have enforced to shift liability to piloted vessels, despite the clause's close similarity to the exculpatory clauses rejected by the courts in the towage context. The Article concludes that all of the contractual maneuvering of tugs and tows to shift liability could best be avoided by treating exculpatory clauses in towage contracts no differently than other contractual clauses.