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a loss payee clause or loss payable clause is a clause in a contract of insurance that provides in the event of payment being made under the policy in relation to the insured risk that payment will be made to a third party rather than to the insured beneficiary of the policy such clauses are common where the insured property is subject to a mortgage or other security interest at the mortgagee usually a bank requires the property be insured and that such a clause be included although such clauses are found in other areas of insurance they are most common in maritime insurance in relation to insuring mortgage vessels as a matter of practicality such classes are usually appended to the end of existing policies in a separate add item after being negotiated between the insurer and the mortgagee it is noted that by an assignment in writing collateral to a first priority statutory ship mortgage the mortgage the owner assigned absolutely to the signe the benefit of this policy of insurance and

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