Speaking at the seminar were Bengi Yuceer, regional head of marine claims and Vivek Sharan, regional marine client director from Howden Insurance Brokers. They highlighted that while the number of losses continued to fall the use of ever larger vessels made incidents prone to bigger losses in terms of the financial impact.
The number of total losses in 2018 was 46 compared to 207 in 2000.
However, they noted that the average container vessel carrying capacity had nearly doubled over the last decade with ships of over 23,000 teu now in service, and vessel size had increased by nearly 1,500% since 1968.
The Howden Insurance Brokers used the example of a worst case scenario where a large containership and a cruise vessel collided, then both grounded causing pollution in an environmental sensitive area. With both vessels then deemed to be total constructive losses the estimated total loss from the incident could come up to an estimated $4bn.
The $4bn figure would include $1.25bn for the wreck removal of each vessel; $100m for each vessel related to bunker removal and oil pollution; $200m in passenger and crew liabilities for the cruise ship; $100m in cargo liabilities for the containership; $100m in litigation costs for each vessel; $500m in property damage by the containership to the cruise vessel and $100m in property damage by the cruise ship to the containership; and $25m in crew liabilities for the containership.
“Marine Insurance, is one of the oldest forms of insurance. Insurance brokers are faced with a multitude of shipping claims on a daily basis, hence a talk of this nature is key to understanding operational risks and how to manage issues when they do arise, be it through insurance or dispute resolution. At EMAC it is our responsibility to provide a platform for informative industry discussion, opinions and knowledge building,” commented Majid Obaid bin Bashir, chairman and secretary general of EMAC.
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