Insurance policies are important tools for managing risk, but their complexity often leads to misunderstandings among policyholders. This study examines the awareness of insured individuals in Ghana regarding the Sue and Labour Clause in marine and auto insurance policies. A mixed-methods approach was used to assess policyholders’ understanding of the clause. The findings show varying levels of awareness, with significant gaps in understanding among insured individuals. The study emphasizes the need for education to improve informed decision-making and effective risk management. Recommendations include educational programs, simplified claims procedures, and collaboration between insurers and regulators to improve insurance literacy. The study contributes to discussions on insurance literacy and provides insights into the Ghanaian insurance environment.