Old ship has right to decoration (8)
I believe the answer is:
streamer
'to decoration' is the definition.
(streamer is a kind of decoration)
'old ship has right' is the wordplay.
'old ship' becomes 'steamer' (steamship).
'has' is an insertion indicator.
'right' becomes 'r' (abbreviation).
'steamer' going around 'r' is 'STREAMER'.
(Other definitions for streamer that I've seen before include "Bit of bunting" , "shocking cold?" , "Ribbon flowing in the wind" , "Long flag, often tapering" , "Long flag or decoration" .)