Legal Definitions - union-loss clause

A union-loss clause is a provision in an insurance policy that is similar to a mortgage-loss clause. It is designed to protect the interests of a lender or mortgagee in the event of a loss that is caused by a union or labor dispute.

For example, let's say that a manufacturing company has a loan from a bank that is secured by a mortgage on its factory. If the factory is damaged or destroyed by a fire that is caused by a union strike, the bank may not be able to recover the full amount of its loan from the company's insurance policy. However, if the policy includes a union-loss clause, the bank may be able to recover the full amount of its loan from the insurance company.

The union-loss clause is important because it helps to ensure that lenders are protected in the event of a loss that is caused by a union or labor dispute. Without this clause, lenders may be at risk of losing their investment if a borrower is unable to repay a loan due to a loss that is caused by a union or labor dispute.