Maritime Law, Insurance & Enforcement
Loss Payable Clauses
Summary
Loss-payable clauses specify who receives insurance proceeds and under what conditions after a maritime casualty.
Why this matters in ship finance
The wording affects whether proceeds finance repair, discharge debt or remain available to the vessel owner.
The concept
Clauses may differentiate small repair claims from major casualties or total loss. Their effect depends on policy wording, notice and applicable assignment/security law.
How it is used in practice
Identify thresholds, first-loss rights, consent requirements and interaction with the mortgage, account control and insurance assignment.
Practical issues
A lender named as loss payee does not necessarily become an insured party or acquire unrestricted rights against the insurer.
How ShipFinance.ai uses this concept
Create a claims-payment decision tree connected to collateral and repayment events.
Key takeaways
- Loss-payable wording allocates insurance proceeds.
- Being loss payee does not necessarily mean being insured.
- Align clause terms with mortgage and repair requirements.