Legal Definitions - lost or not lost

The term lost or not lost refers to a specific clause found in marine insurance policies. This provision allows an insurance policy to be effective from a date *before* the policy was actually signed, even if the insured vessel had already suffered damage or been completely lost during that earlier period. This retroactive coverage is valid only if, at the time the insurance contract was made, neither the ship owner (the insured) nor the insurance company (the insurer) had any knowledge or reasonable means of knowing about the vessel's loss or damage. Essentially, it provides coverage for incidents that occurred before the policy's formal creation but were unknown to both parties when the agreement was finalized.

• Example 1: Delayed Communication from a Remote Voyage
  A shipping company is arranging new insurance for one of its cargo vessels currently on a long voyage across the Pacific Ocean. On October 15th, the company signs a marine insurance policy with a "lost or not lost" clause, making the coverage effective from October 1st. Unbeknownst to both the shipping company and the insurer, the vessel had encountered an unexpected typhoon on October 8th and sustained significant damage to its hull, which prevented it from communicating. The damage is only reported when the ship finally reaches a port with communication facilities on October 20th.

  Explanation: Despite the damage occurring before the policy was signed (October 8th vs. October 15th), the "lost or not lost" clause ensures coverage. This is because the incident happened within the retroactive period (October 1st to October 15th), and neither the shipping company nor the insurer knew, or had any way of knowing, about the damage when the policy was executed on October 15th.

• Example 2: Unreported Incident During a Charter Period
  A charter company leases a yacht for a month-long excursion. The company decides to take out a new insurance policy for the yacht on November 20th, including a "lost or not lost" provision effective from November 15th, the start of the charter. On November 17th, the yacht's anchor chain snapped in a strong current, causing minor damage to the bow as it drifted briefly before the crew could secure it. The crew, wanting to avoid trouble, did not report the incident immediately. The damage is only discovered during a routine inspection when the yacht returns to port on November 25th.

  Explanation: The "lost or not lost" clause would cover the repair costs for the bow damage. The incident occurred on November 17th, which falls within the retroactive coverage period (November 15th to November 20th). Crucially, neither the charter company nor the insurer was aware of this damage when the policy was signed on November 20th.

• Example 3: Purchase of a Vessel Already at Sea
  A new owner purchases a commercial fishing trawler that is already out at sea on a multi-day trip. To ensure immediate and continuous coverage, the new owner arranges a "lost or not lost" marine insurance policy on December 5th, making it effective from December 1st, the official date of sale. On December 3rd, the trawler's engine experienced a minor mechanical failure that was quickly repaired by the onboard engineer, but due to a remote location, this event was not communicated to shore until December 6th.

  Explanation: The "lost or not lost" clause would cover the costs associated with the engine repair. The mechanical failure occurred on December 3rd, which is within the retroactive period (December 1st to December 5th). At the time the policy was signed on December 5th, neither the new owner nor the insurance company had any knowledge of this incident.