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Mortgagee Endorsement

An endorsement to an insurance policy covering the policyholder’s mortgaged property to provide that, in the event of the insolvency of the insurance company, the reinsurer shall pay directly to the mortgagee and/or the policyholder the amount of loss that would have been recovered from the reinsurer by the insurance company. The endorsement may provide that the reinsurer will pay the full loss amount in accordance with the insurance protection afforded by the insurance company. Similar in concept to the Cut-Through Endorsement.

Mortgagee’s Interest Insurance (MII) for Marine Hull

It covers the bank/lender’s interest in the mortgaged vessel. The cover is secondary to the vessel’s actual primary insurance, such as Hull and Machinery, Hull Interest, War and P&I Insurance. A claim is valid only when the primary insurance cover does not respond. It is to be noted that MII is a mirror of the primary cover and does not cover anything outside that scope of cover. MII insurance covers loss resulting from loss of or damage to or liability of the Mortgaged Vessel which would prima facie be covered by the Owner’s Policies and Club Entries, but in respect of which there is subsequent Non-Payment by any of the owner’s underwriters.

Mortgageholders clause

A standard property policy provision that creates elements of a separate contract between a mortgage company and an insurance company. Any loss to building or structures will be paid to the mortgage company and insured jointly and any act of the insured voiding coverage will not affect the mortgage holder without it first being given an opportunity to comply with the insurer’s needs.