ABSTRACT
Traditionally, Lloyd’s SG form of policy covered only the risks of loss or damage to the subject-matter insured, with the addition of general average and salvage charges; liabilities were not covered. The case which established this proposition—De Vaux v Salvador 18 —was followed, as we have seen in connection with the Running Down Clause, 19 by a desire on the part of underwriters to fill this gap in the cover, at least in part. In the belief that, by leaving a part of this risk uninsured, they would induce shipowners to train their masters and crews to take greater care, underwriters agreed to cover the legal liabilities of their insured arising out of collision to the extent of three-fourths only.
