## Facts

- Richard D. Brew & Co. owned mining equipment insured under an inland marine policy.
- The insurance policy contained a “no benefit to bailee” clause providing that the insurance would not inure to any carrier or bailee “by stipulation in bill of lading or otherwise,” and that breach would render the policy “null and void.”
- Brew hired Auclair Transportation, Inc., a motor carrier/bailee for hire, to transport the equipment under a straight bill of lading.
- The bill of lading contained a “benefit of insurance” clause stating that any liable carrier would have the benefit of the shipper’s insurance, so far as it would not avoid the policy, provided the carrier reimbursed the premium.
- The equipment was damaged in transit.
- Brew’s insurer paid the loss and asserted subrogation rights, bringing suit in Brew’s name against Auclair to recover for the damage.

## Issues

1. Whether a carrier may rely on a bill-of-lading “benefit of insurance” clause to defeat an insurer’s subrogation claim when the insurance policy contains a “no benefit to bailee” clause expressly barring such stipulations.

## Decision

- The Supreme Court of New Hampshire answered the transferred question in favor of Brew/the insurer.
- The bill-of-lading “benefit of insurance” clause was ineffective against the insurer because the policy expressly prohibited conferring any insurance benefit on a carrier or bailee.
- The insurer’s payment subrogated it to Brew’s rights against Auclair, and Auclair remained liable for the loss notwithstanding the bill-of-lading clause.

## Legal Principles

- An insurance policy clause providing that coverage shall not inure to the benefit of any carrier or bailee, including “by stipulation in bill of lading or otherwise,” bars a carrier from invoking a conflicting bill-of-lading “benefit of insurance” provision.
- After an insurer pays a covered loss, it may pursue subrogation against the responsible carrier; contractual terms between shipper and carrier cannot impair that right when the policy reserves it.
- Where a bill of lading purports to grant a carrier the benefit of insurance only “so far as this shall not avoid” the policy, and the policy would be avoided by such a stipulation, the carrier takes no benefit and cannot use the clause to limit liability.

## Conclusion

The court held that the policy’s “no benefit to bailee” provision controlled over the bill-of-lading “benefit of insurance” clause, preserving the insurer’s subrogation claim and leaving the carrier liable for the damage to the shipment.


Richard D. Brew & Co. v. Auclair Transp., Inc., 106 N.H. 370, 211 A.2d 897 (N.H. 1965)