Titanic law may limit payouts after bridge collapse – E24

The owner of the container ship that crashed into a bridge in Baltimore on Tuesday may get financial relief from an 1851 law.

Grace Ocean Private, the owner of the Dali container ship that crashed into a Baltimore bridge on Tuesday morning, is facing potentially huge compensation claims.

Eight people fell into the water when the bridge collapsed, and six of them are still missing and presumed dead. Two people were retrieved from the water after a short time, but one died shortly after in hospital.

– There are several billion dollars in values ​​that have been lost, says Lloyds top John Neal to Bloomberg.

Now it turns out that the company can get help from a law from the 19th century, writes Bloomberg.

Can reduce requirements

The same law was adopted after the sinking of the Titanic in 1912 to limit the owner’s payouts after the disaster.

The law dates from 1851, and was passed to prevent shipping companies from suffering huge losses after disasters at sea.

By taking as a starting point how much the ship is worth after the accident, in addition to any income from shipping, the requirements can be reduced considerably, according to Martin Davies. He is the director of the Tulane University Maritime Law Center.

Thus, owner Grace Ocean Private can “get away” with tens of millions of dollars in compensation claims, instead of several hundred.

I think Maersk goes free

Grace Ocean Private will probably also get help from one shipowner’s liability insurance shipowner’s liability insuranceMarine insurance that covers liabilities to third parties. Underwritten mainly by shipowners organized in mutual companies, known as P&I clubs (source: Wikipedia).

The container ship Dali is insured by the Britannia Protection and Indemnity Club for up to 3 billion dollars, according to Bloomberg.

The sum is large, but will be “very manageable” for the global the reinsurance market the reinsurance marketReinsurance is also called “reinsurance”, a form of insurance that is often used to spread the burden of large insurance settlements among several companies. analysts from Bloomberg Intelligence write in a note.

It was Danish Mærsk that leased or “chartered” the ship. Bloomberg’s analysts believe that the container giant will probably not be held responsible.

The reason is that Maersk had no employees on board Dali. The shipping company Synergi Marine Group operated the ship, and was thus responsible for the crew.

Losses of up to 4 billion

Depending on how long it takes to get the Baltimore port back to normal, the insured losses could amount to between 2 and 4 billion dollars, says Marco Alvarez to Reuters.

He is the Managing Director of Global Insurance Ratings at Morningstar DBRS.

In that case, they will surpass the record payments after the cruise ship Costa Concordia ran aground off Italy in 2012, adds Alvarez.

He believes the disaster can help push up the prices of marine insurance globally.

The insurance company Britannia P&I has confirmed that the ship was insured with them.

In a statement, they say they are working closely with the ship’s captain and the authorities “to establish the facts and ensure this situation is dealt with quickly and professionally”.