ABSTRACT
War risks policies, in common with many types of insurance contract, often contain held covered clauses. The effect of a “held covered” clause is to alter the legal consequences of non-compliance with policy limits, or other circumstances in which cover would be reduced. This family of clauses reflect market practice and their precise legal effect have troubled the courts. This chapter reviews of what the clauses are meant to achieve in practice, before moving to a detailed consideration of their legal effect. Generally, prior notice of entry is expected in order that the additional premium may be agreed, the underwriter may be put on notice when the extra risk of greater danger arises and there may be certainty in the relationship between the shipowner and the underwriter. In several cases, the simple held covered clauses were interpreted as creating corresponding obligations on the underwriter to extend cover and on the insured to give reasonable notice and pay the additional premium.
