Hull Policy: Additional Assured; Loss Payees, Waiver of Subrogation; the Mortgagee's Position; Premiums, Deductibles and Franchises
![handle is hein.journals/tulr41 and id is 397 raw text is: THE HULL POLICY: ADDITIONAL ASSURED; LOSS PAY-
EES; WAIVER OF SUBROGATION; THE MORTGAGEE'S
POSITION; PREMIUMS, DEDUCTIBLES AND FRANCHISES
HARRY M. MACK*
The topic of this paper under the general subject of the hull
policy is additional assured; loss payees; waiver of subrogation;
the mortgagee's position; premiums, deductibles and franchises.
The hull policy is a first-party contract under the terms of which
the underwriter agrees to indemnify an assured or loss payee for
certain types of damage to the insured vessel in consideration of
the payment of a premium.
First let us define the terms additional assureds and loss payees
under a policy and then consider some problems regarding them.
Anyone may be an additional assured who has insurable interest
in the property insured and is not an alien enemy.' An insurable
interest means that the assured must bear such a relation to the
insured subject that, directly or indirectly, he may be benefited
by its safe arrival or continued existence and be injured by its
damage or loss. The simplest example of an insurable interest is
ownership; however, there are many insurable interest potentials
surrounding a vessel and her operation, such as possession or con-
tingent ownership, to name only two.2 This paper shall be limited
to insurable interests arising from ownership, charter and mort-
gage.
When a vessel has been mortgaged, the mortgagee has a mate-
rial interest in such vessel, and therefore an insurable interest to
the amount of the loan, but the mortgagee may insure the vessel
to the extent of its full value for the benefit of all concerned.3
The nature of the mortgagee's interest need not be specified in the
marine policy, and usually his interest is covered by naming the
mortgagee an additional assured or by including the mortgagee in
policy loss payee provisions, or by both means.
*President, Neare, Gibbs & Company.
'Every owner, whether legal or equitable, of maritime property has
an insurable interest therein. Hooper v. Robison, 98 U.S. 528 (1878);
Buck v. Chesapeake Ins. Co., 26 U.S. (1 Pet.) 151 (1821). See also
Winter, Marine Insurance 473 (3d ed. 1952) [hereinafter cited as
Winter].
2See Winter 135-37.
31n a demise or a bareboat charter, the charterer steps into the
shoes of the vessel owner as owner pro hac vice, Hust v. Moore-McCor-
mack Lines, Inc., 328 U.S. 707 (1946), and may insure the vessel in his
own name. Winter 136.
For a discussion of insurable interest generally see Gilmore & Black,
Admiralty §§ 2-5, at 54-57 (1957).](ViewImageLocal?handle=hein.journals/tulr41&div=27&collection=&method=preview&ext=.png&size=3)
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