The Hull Policy Today: Thoughts from the Claims World

The subject of this Article is the current status of hull clauses. One essential question is whether present hull clauses should be amended with relatively minor revisions or whether they should be replaced with new hull clauses written solely by the U.S. market or jointly with the participation of underwriters from overseas markets. Market conditions finally appear to be changing; soft premium rates have begun to “harden,” and now may be a propitious time to develop new policy wording. If insurance rates continue to climb on a worldwide basis, how will this affect policy terms and conditions? The answers to these important issues will be determined as we proceed into the new millennium.
It is important for marine insurance professionals to be well versed in maritime law in order to better understand how courts may interpret marine insurance policies. Courts provide clarity and guidance when issues of policy coverage arise. When faced with nonroutine claims, marine insurance professionals must be able to evaluate the strengths and weaknesses of various positions, which may involve interpreting key phrases such as “privity” or “seaworthiness.” They depend upon such elements as “clarity” and “certainty” in these claim decisions because they provide an established frame of reference. The facts of each individual case, together with an evaluation of the language of key policy provisions as defined by the courts, must all come together in the resolution of these claims. If the key terms are unclear and subject to varying interpretations, potential confusion among parties may cause the fair and efficient settling of claims to become complicated and, at times, impossible to resolve without resort to litigation.