What is a 3/4th Collision Liability?

Assume that both vessels in an example collision are insured for 3/4th collision liability with their hull underwriters and for 1/4th with their P&I Clubs. In the example vessel A is 75% to blame for the collision and vessel B is 25% to blame. Vessel A suffers damage costing $100,000 and vessel B damage costing $200,000. The payments by each underwriter are illustrated below.

 

In most maritime jurisdictions, the question of responsibility for collisions is determined with reference to the International Regulations for the Prevention of Collisions at Sea, which codify how vessels should conduct themselves in order to avoid collisions. The apportionment of liability between the vessels is normally based on the causative importance of any breaches of these regulations.

 

 

  Vessel A Vessel B
Percent to blame 75% 25%
Own damage $100,000 $200,000
Liability to other vessel $150,000(75%x$200,000) $25,000(25%x$100,000)
Net settlement $125,000 paid to B  
U/Ws pay $112,500(3/4x$150,000 $18,750(3/4x $25,000)
P&I pays $37,500(1/4x $150.000) 6,250(1/4x $25,000)

 

 

Thus each collision liability underwriter reimburses its share of each vessels gross liability to the other vessel.

 

 

Copied from: http://www.simsl.com/collision-and-non-contact-incidents.html

 

 

About the Author

has written 1869 stories on this site.

12 Comments on “What is a 3/4th Collision Liability?”

  • Matius wrote on 10 January, 2012, 16:07

    Pak Imam,

    Mohon dijelaskan pak pengertian 4/4th collision liability. Dan apabila kapal assured menabrak kapal lain, bagaimana liability tertanggung atas kerusakan kapalnya sendiri dan kapal pihak ke-3 tersebut?

    Terima kasih banyak atas penjelasannya.

  • IMAM MUSJAB wrote on 10 January, 2012, 20:10

    “Liability tertanggung atas kapalnya sendiri?” –> namanya bukan Liability Pak, atas kapalnya sendiri ya tetap dijamin 100%. “atas kerusakan kapal pihak ketiga?” jika dijamin 4/4 berarti juga dijamin 100% Pak perhitungan seperti di atas, namun 3/4 nya diganti menjadi 4/4 alias 100%. Jadi kalo kapal sendiri rusak 100%, penggantian kapal pihak ketiga juga 100% maka Total ganti ruginya menjadi 200% of Insured hull Value

  • Hamza wrote on 19 March, 2013, 0:49

    Dear Imam,

    I need some clarification if possible, regarding Hull & Machinery insurance if the insurance company has exclude the 3/4th collision liability from it’s Hull & Machinery policy, and the P&I has provide a 4/4th collision liability, In this case, dose P&I will pay for collision liability for TPL in full in case of any claim OR Hull & Machinery policy will pay some proportion.

    H&M pays zero (0) and P&I pays 100%

  • Hamza wrote on 22 March, 2013, 2:07

    Thanks ,
    Could you help in this example: Vessel A has H&M insurance covered under ITC.280 but collision liability excluded absolutly and has a P&I cover on 4/4th RDC and 4/4th FFO. in the other hand vessel B has H&M insurance covered under ITC.280 and has a P&I cover on 1/4th RDC & 1/4th FFO. now let us say there is a collision between vessel A & B
    using the above example. could you please help in this example.

    Calculation is not that easy…but you may have a look this for reference

  • HAMZA wrote on 26 December, 2013, 1:43

    Dear Imam, I need your advice please.
    we have a client who declare his vessel as CTL due to damage to port side engine, now the cost of repair approx $2.5 milion, the vessel value is $ 3.3 milion. now the vessel can navigate using only the 2nd engine, now we have decided to reimburse the insured for total value + sue and labor charges. Now my question is that the client is keeping his vessel in the port and he is paying daily expenses around USD 6,000 which come now to approx. of USD 435,000. Now as underwriters do we have to pay for all those expenses ? or the client has to take responsibility or there is any caculation to do so?
    Your advise is highly appreciated. Thanks

    In case of CTL, maximum liability Insurers have to pay is Total Value + Sue and Labor

    How about the salvage? if client abandoned the ship to Insurers to take care of? Insurers have a right to decline OR to accept. if declined, client to take care the ship and expenses and liability. if accepted, you take all responsibilities and you may sell the salvage.

    You should negotiate with client and take all consideration “Salvage Value v Cost of Recovery”

  • HAMZA wrote on 20 January, 2014, 23:41

    Thank you IMAM and appreciate your feedback. What about if a vessel Sunk into the water, Is it neccessary for the Insured to provide a Notice of Abandonment to the underwriters? and if the underwriters want to decline NOA, do they have to reply using “WITHOUT PREJUDICE” statement or Just to decline with simple words without using “WITHOUT PREJUDICE” statement .

    Thank you

    WITHOUT PREJUDICE Statement is necessary for which the Policy Liability has not been concluded. once it is done, simply YES or NO

  • HAMZA wrote on 17 February, 2014, 0:33

    Dear Imam, I’ve doubt about wreck removal expenses. during to bad weather on a vessel, the Anchors broken and fallen in the sea near the port, now the port has requested from the client to remove those anchors from the water. Now who is responsible to remove those anchors, P&I club or H&M underwriters and Why? and is that consider as wreck removal or not? Thanks.

    H&M does not cover “wreck removal” thus P&I does.

  • Hariadi wrote on 15 August, 2014, 17:04

    Yth. Pak Imam
    Dalam polis H & M di bawah jaminan ITC CL 280 tercantum klausul 3/4 collision liability yang berbunyi : “The underwriters agree to indemnify the assured for three-fourths of any sum or sums paid by the assured to any other person or person by reason of the assured becoming legally liable by way of damages for: 1. loss or damage to any vessel or property on any other vessel”. apakah ini berarti jika kapal tertanggung menabrak selain kapal (dermaga) dapat terjamin melalui klausula ini? jika iya, apakah porsinya full atau 100% di luar deductible? Thx & rgds

    3/4ths Collision Liability : hanya menjamin liability atas tabrakan kapal v kapal
    Liability atas Tabrakan kapal v benda selain kapal (dermaga, dll) tidak dijamin

    *) Supaya dijamin harus diperluas dengan jaminan FFO (Fixed and Floating Object)

  • Hamza wrote on 3 February, 2015, 3:08

    Dear Imam, I’ve one cargo claim and need your feedback. there was one vessel carrying edible oil in Bulk, total sum insured is FOB US$ 6,250,000 as per commercial Invoice , total quantity as per B/L was 25,000 MT, after vessel arrived and start discharging the goods from the vessel, there was a shortage of 500 MT as per draft survey. now price per MT is US$ 250, freight charged is USD 50 per MT, the sum insured as per insurance policy is C&F US$.7,500,000 + 10% = US$. 8,250,000/- deductible as per insurance policy is 0.50% of total sum insured. could you calculate how much the insurer will pay to the client ? this calculation of shortage & freight is realy confusing me. awaiting your advises. thanks

  • Anup wrote on 7 February, 2015, 11:55

    Very well and simply explained Mr. Imam. Further, Hamza, about your latest query, I worked out the claim payout for oil shortage as 120450 USD. let us wait for some expert speak from Mr. Imam and see if the payout value is close to his workings.

  • Devinder wrote on 6 May, 2017, 8:55

    Why H & M cover only 3/4 collision liabilities, why not full.

    Because P&I covers the other 1/4 portion
    *But, now in practice, it is very common H&M covers full portion 4/4 collision liabilities

  • Indra wrote on 17 May, 2017, 11:57

    Dear Pak Imam,
    Apa ada sisi positif/negatif apabila mengambil 4/4 Collision Liability dari H&M atau dari P&I?
    Secara premi dan benefit lebih menguntungkan yang mana? terima kasih

    Collision Liability lebih bagus dibeli dari P&I karena Limitnya sangat besar (tidak dibatasi oleh harga kapal)

    Kalo dari premi tentu lebih hemat 4/4 di HNM (tapi limitnya terbatas insured value)

Write a Comment

Gravatars are small images that can show your personality. You can get your gravatar for free today!

*

Copyright © 2024 ahliasuransi.com. Ahliasuransi is a registered trade mark. All rights reserved. Managed by PT Ahliasuransi Manajemen Indonesia - Specialist Insurance Training & Consultant.
Powered by WordPress.org, Custom Theme and ComFi.com Calling Card Company.