Legal Precision in Hull Insurance: The Impact of the Wording in Exclusion Clauses

Exclusions are designed to delineate the boundaries of coverage, and they serve a dual purpose: they mitigate the insurer's risk exposure and fine-tune the policy to the unique needs of the maritime sector. By explicitly stating what is not covered, insurers can avoid the assumption of unlimited risk, thereby preventing moral hazard and ensuring the viability of the insurance product.

The precision in the wording of exclusion clauses is key for defining the scope of coverage in insurance policies.

Discussing the nuances of these terms helps clarify the extent of protection and the specific risks that are excluded, which can significantly impact both the insurer’s liability and the insured’s coverage expectations.

Let’s delve into specific examples.

1. The seemingly similar terms

The distinction between closely related terms carries different implications for coverage. For instance, the difference between “faulty design” and “faulty workmanship”, “wear and tear” and “gradual deterioration”, “seaworthiness” and “fitness for a voyage”, and “collision” versus “allision.” Each pair presents subtle differences that affect coverage.

For example, “seaworthiness” implies a vessel’s overall condition for safe maritime operations, whereas “fitness for a voyage” specifically relates to its suitability for a particular journey.

“Collision” involves impact with another moving vessel, contrasting with “allision,” which refers to striking a stationary object. These nuanced differences significantly influence the insurer’s liability and the claims process, highlighting the importance of precise terminology in policy documentation.

2. Modifications in the terminology

The adaptation of terminology within exclusion clauses in hull insurance policies testifies to an evolution in language that reflects not only advancements in maritime technology and operations but also a response to broader legal interpretations and risk management strategies.

In Nordic Rules, the transition from “ship” to “vessel” exemplifies this evolution, broadening the insured scope to include not just the physical structure and machinery but also onboard equipment and spare parts. This change, directly affecting coverage scope and potentially leading to premium adjustments due to increased insured value and covered risk, also caters to integrating advanced navigation systems that may eliminate exclusions for navigational errors.

Additionally, when utilizing older hull insurance forms, additional exclusions often added may pertain to risks that have become more prominent or better understood over time.

Regulatory changes in maritime law or insurance regulations, such as environmental concerns, necessitate policy adjustments to cover risks previously excluded. For example, during policy renewal or the negotiation of a new policy, insurers may adjust the exclusions to reflect their evolving understanding of risk exposure and the increasingly comprehensive regulatory environment. This adjustment might include more robust coverage for environmental damage or stricter liability standards for oil spills. 

This shift in language is key for aligning insurance policies with the maritime sector’s current needs and risks, demonstrating an adaptation to the contemporary operational and technological realities of vessels. The aim of adding such exclusions is to clarify coverage limits in response to evolving maritime risks and legal landscapes, ensuring a clear understanding of the policy’s scope for all parties involved.


Exclusions are key in tailoring insurance products to specific risks and accurately pricing policies. The precision in the wording or terms of exclusion clauses is essential for delineating insurance policy coverage. Accurate language mitigates misunderstandings and potential disputes by clearly defining the scope of coverage. 

At Marlin Blue, we offer guidance on how insurers can approach the process of modifying or removing exclusions, including risk analysis, market competition considerations, and policyholder communication. 

For more insights and guidance, contact Marlin Blue’s team and Marlin Blue’s website at

Sign up below for Marlin Blue newsletters and our latest updates & events.

Get notified about new articles