What is Running Down Clause? 4/4th RDC?

Answer

Running Down Clause is the collision liability clause under H&M. Traditionally hull underwriters cover 3/4 of the assured’s liability to the other vessel and P&I covers the remaining 1/4; under a 4/4 RDC arrangement, the hull underwriter covers 100% of the insured collision liability, subject to policy limits and exclusions.

Traditional marine insurance language used “running down” to mean one vessel running into/colliding with another vessel.

RDC → Vessel strikes another vessel.

FFO (Fixed and Floating Objects) → Vessel strikes jetty, berth, buoy, dolphin, etc.

“RDC is the collision liability cover under Hull & Machinery insurance, indemnifying the assured for liability arising when the insured vessel collides with another vessel.”

Under the traditional Institute Time Clauses – Hulls, H&M insurers cover 3/4 (75%) of the shipowner’s collision liability.

4/4 RDC = 100% collision liability is covered by the H&M insurer, rather than only 75%.

P&I can still be important because certain collision-related liabilities may fall outside the H&M RDC, for example:

• Personal injury or death
• Pollution liabilities
• Wreck removal
• Certain cargo liabilities
• Liabilities exceeding the H&M collision limit
• Other liabilities excluded by the hull policy