Held covered clause
A marine policy clause that keeps cover in force when an unforeseen change occurs, deviation, change of voyage, breach of a condition, provided the insurer is promptly notified and an additional premium is paid.
Traditional English marine law punished any departure from the policy terms harshly: a deviation, change of destination or breach of warranty discharged the insurer, even with no link to the loss. The held covered clause softens this rigor. It provides that the insured stays covered despite the event, provided it informs the insurer as soon as it becomes aware and accepts the terms and additional premium the insurer will set, possibly after the loss. The clause does not apply if the insured delays notice, or if the change makes the risk one no reasonable insurer would have accepted at a commercial rate. It appears in cargo clauses, which cover a change of voyage, and in hull policies for certain navigating limits or warranties. For the underwriter, it requires a schedule of additional premiums and a clear policy, since it must price after the fact a risk already run.
A ship insured for a voyage to Antwerp is diverted in 2024 to Rotterdam on the charterer's orders; the owner notifies the insurer the same day, accepts an additional premium of 0.05% of the insured value, and remains covered for damage sustained in the substitute port.
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