The Limitation of Liability Act, passed in 1851, caps a shipowner’s liability to the value of the ship, if the accident is not caused by the vessel owner’s neglect or malfeasance. In other words, as long as a shipping company doesn’t interfere with its captain’s decisions while he or she is at sea, explains admiralty and maritime lawyer Chris Hug, vessel owners can limit their liability when the causes of the accident occurred without their “privity or knowledge.”
