Sue and Labor Clauses: The Basis for Mitigating, Expediting and Other Policy Provisions



...(expediting) cost coverage does not require an additional purchase. It is either included in a policy or it is not. Extra expense coverage, on the other hand, usually requires an additional premium. Also, to the extent expediting costs are covered in earnings forms, coverage is typically limited to the extent expediting costs actually reduce the loss amount otherwise payable.

Sue and Labor Clause: a Brief History

Many of these mitigating and expediting provisions of modern day policies undoubtedly have their genesis with what is referred to as the “sue and labor” clause, which originated with marine insurance. It has been said that this kind of clause is so old that it is found in the first written Anglo- American marine insurance policy on record. That policy, drafted by British underwriters, insured the hull of the good ship Tiger, in the...

“One of the reasons this clause was introduced — and there are different versions — was that early on, underwriters came to realize that if mitigation expenses were not covered, the insured would have less incentive to mitigate losses.”