Inchmaree (or Negligence) clause. The so-called “Inchmaree” clause derives its name from the case of Hamilton v. James and Mersey Insurance, 1987, involving the Inchmaree.
According to this judgment, damage to machinery caused by negligence of members of the crew was not regarded as a maritime peril and the owners were not covered under the ordinary marine insurance policy. This “Inchmaree” clause is now included in the Institute Time Clauses (Hulls) 1983. See Hull clauses.)
Although this clause specifically brings within the scope of the policy loss or damage to hull and machinery caused by negligence, the reference to accidents raised the question as to whether an accident caused by wear and tear can be regarded as an “accident” within the meaning of the clause.
It will be noted that latent defects are covered in this clause, but it does not imply that underwriters undertake to make good the defective part. As a consequence of these restrictions, shipowners often require a more comprehensive cover than the ordinary negligence clause.
In order to meet owners’ requirements, they may purchase “Institute Additional Perils Clauses— Hulls”. In contrast to the ordinary form of Inchmaree or Negligence clause, which covers only certain specified events, the Additional Perils clause generally covers damage by any fortuitous happening, including the negligence or error of judgment or incompetence of any person. The clauses also provide that underwriters shall be liable for the cost of repairing or renewing a burst boiler, broken shaft, etc., on the understanding that if there has been no actual failure or accident, but simply the condemnation of a defective part solely in consequence of a latent defect or fault or error in design or construction, underwriters are not liable for the cost of replacement.