sue and labor (clause)
(insurance) A clause in marine and inland marine insurance policies that requires the policyholder, in event of loss, to take all necessary steps to save the property from further loss, and to recover from others who caused the loss. The insurer agrees to pay reasonable costs of this effort. The sue and labor clause of the open cargo policy reads essentially as follows:
“In case of any loss or misfortune it shall be lawful and necessary to and for the assured, his or their factors, servants and assigns to sue, labor, and travel, for, in and about the defense, safeguard and recovery of the goods and merchandise or any part thereof … to the charges whereof this company will contribute according to the rate and quantity of the sum herein insured.”
Reasonable charges incurred for this purpose are generally collectible under the insurance policy. For example, when a shipment of canned goods arrives with some leaking cans in each of several cartons, the leaking cans must be taken out if rusting and label damage are to be minimized. The expense insured in this operation may be recovered under the insurance policy.