Sue and Labor Clause Law and Legal Definition

Sue and labor clause is a standard clause in a maritime insurance policy which “allows the insured to recover from the insurer any reasonable expenses incurred by the insured in order to minimize or avert a loss to the insured property, for which loss the insurer would have been liable under the policy.” Sue and labor clause is similar to a contract where an underwriter agrees to pay the assured the expense s/he may reasonable incur in preventing a loss which, if occurred would fall on the underwriter under the other clauses. It is to be noted that in the absence of an applicable and mandatory statute to the contrary, the wording of the insurance policy will be determinative as to the scope of sue and labor protection.