Cl. 16-11, sub-clause 3

The basic rule in relation to costs incurred to prevent or minimise loss is that no apportionment is to be made even though the measures taken also benefit the assured's uninsured interest, see Cl. 4-12, sub-clause 2.

However, sub-clause 3 of Cl. 16-11 contains a rule which provides that the assured shall bear a portion of the extra costs in proportion to the amount of time that is saved for his account, and this is a departure from the solution that otherwise applies to costs incurred to prevent or minimise loss.

The principles for apportionment according to sub-clause 3 have been outlined as follows in the Commentary to Cl. 16-11:

The principles applicable to apportionment under a loss-of-hire insurance must take account of the way in which the cover is normally structured in such insurance: the assured is liable for the agreed deductible period, after which the insurer is liable for the number of days of indemnity stated in the policy, and should the loss of time exceed this maximum, the assured is again liable for the excess number of days. Costs must therefore be apportioned in such a way that the assured and the insurer cover the costs related to a saving of time during the periods of loss of time for which they are respectively liable. This means that the assured first bears costs related to any reduction of the number of days in excess of the insurance contract maximum, whereafter the insurer must cover costs related to any reduction of the number of days covered by the insurance contract, and finally the assured must cover costs related to time saved within the deductible period.