Limited Liability
Limited liability is a legal concept that protects the owners and shareholders of a company from being held personally liable for the debts and obligations of the company. In the maritime context, limited liability is particularly relevant to shipowners, who may limit their liability for claims arising from incidents such as collisions, pollution, and cargo damage. This is achieved through various international conventions, such as the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention) and the International Convention on Civil Liability for Oil Pollution Damage (CLC Convention). The purpose of limited liability is to encourage investment in the shipping industry by reducing the financial risk for shipowners.
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