Opinion ID: 259948
Heading Depth: 1
Heading Rank: 2

Heading: inchmaree clause

Text: 25 The Inchmaree clause was first included in marine insurance policies to overcome the effects of a decision of the House of Lords which was adverse to the assured. 4 Its purpose was, and is, to broaden, not restrict, to expand, not withdraw coverage. Saskatchewan Government Ins. Office v. Spot Pack, Inc., 242 F.2d 385, 391 (5th Cir., 1957). It is with this beneficial purpose in mind that the clause must be interpreted. 26 The issue as to coverage under the Inchmaree clause is whether such coverage is excluded because Stasch's negligence was want of due diligence by the owners of the ship, or any of them, or by the manager. 27 Although the district court included no express finding that Stasch was the master of the No. 12 at the time of the accident, its general findings comport such a conclusion, and we hold that Stasch was acting as master of the No. 12. 28 There is considerable doubt in our minds as to whether he was also the owner or manager within the meaning of the clause, although, as the district court found, his status was that of owner for a number of other purposes. It seems to us quite likely that the reason for appellant's informing the insurance company of the charter and for having Stasch added as a named assured was precisely to bring Stasch's negligence under the coverage of the policy, as well as to protect him from a claim of subrogation in case of loss through his negligence. Certainly Stasch himself could have had no claim for the loss of the vessel. 29 But assuming, arguendo, that Stasch was an owner or manager for purposes of the exclusion clause, we are persuaded that that exclusion was not intended to apply to the negligence of an owner who is acting as master in the operation of a vessel at sea. 30 Although we have found no authority directly in point, the few decisions interpreting the words owner and master lend support to our conclusion. In Read v. Agricultural Ins. Co., 219 Wis. 580, 263 N.W. 632 (1935), where plaintiff sued on a policy of marine insurance containing an Inchmaree clause, the court said: 31 There seems to us to be a clear distinction between the activities of a person acting on behalf of the owner in conditioning and launching the boat and those of a master or other officer acting professionally in the handling of the vessel at sea. If the conditioning operations culminate in launching the vessel in an unseaworthy condition, it is clear to us that there is no coverage. If there is negligence in the discharge of some professional duty in connection with handling the boat during the voyage, the `Inchmaree' clause appears to apply. 32 263 N.W. at 636. See also Founders' Ins. Co. v. Rogers, 281 F.2d 332 (9th Cir., 1960); Baggaley v. Aetna Ins. Co., 111 F.2d 134 (7th Cir., 1940); Wigle v. Aetna Cas. & Sur. Co., 177 F.Supp. 932 (E.D.Mich.1959); Yacht Buccaneer, 1940 Am.Mar.Cas. 1397 (arbitration, Chicago, 1940); Baxendale v. Fane, 66 Lloyd's List L.R. 174, 181 (1940). 33 Where the owner or charterer of the vessel also acts as its master, the distinction drawn by the clause can be given effect only if it is read as referring to the function that the owner-master is performing when the acts causing the accident take place. The interpretation urged by the appellee would render the assumption of liability for negligence of [the] master totally ineffective in the present case. 34 The language of the clause as a whole reflects a recognition of the different treatment to be accorded seagoing and preparational carelessness. There is no other explanation for the use of the term negligence in referring to the master, and of the term want of due diligence in referring to the owner. Clearly the draftsman had quite different operations in mind. We conclude that the Inchmaree clause was designed to insure against seagoing or operational negligence of the master (whether or not he is also the charterer or owner), and to exclude from coverage damage due to the shoreside failure of the shipowner's managerial staff properly to prepare or equip the vessel for the voyage or service she is about to perform. 35 Since the accident resulted from the operational negligence of Stasch while he was acting as master of the No. 12, appellant was entitled to recover under the policy. 36 Finally, appellee contends that recovery is precluded by the proof of loss provision of the policy. This provision required the assured to submit proof of loss that the Assured has used due diligence to prevent    loss or damage as a condition precedent to any right of action of the assured. 37 Not only was the point not raised in the court below, but it is wholly without merit. Even if we assume, contrary to authority, O'Boyle v. Northwestern Fire & Marine Ins. Co., 49 F.2d 713 (2d Cir., 1931), that the insurer did not waive such proof of loss by denying all liability before suit was brought, the due diligence of the assured to which the proof of loss provision refers is obviously that diligence required by the Inchmaree and Perils clauses. Clearly the proof of loss provision was not designed to add substantial new exclusions from the coverage of the policy. Courts, in giving effect to that provision in an insurance policy, have never treated the requirement for a proof of loss as a mere trap for the unwary. Id. at 716. 38 Reversed and remanded with instructions to enter judgment for libelant.