The owner and manager of a container ship that crashed into the Francis Scott Key Bridge in Baltimore filed a petition in a Maryland federal court in an effort to head off potential liabilities of up to $43.7 million as an investigation gets under way to determine the cause of the disaster.
Grace Ocean Pte Ltd., owner of the Singapore-flagged container ship “Dali,” and Synergy Marine Pte Ltd., which manages the vessel, filed a petition for exoneration from or limitation of liability in U.S. District Court in Maryland.
Subject to an express reservation of rights, petitioners offer an interim stipulation of value in the amount of $43,670,000 (i.e., sound value of the vessel plus pending freight less repair costs and salvage costs),” the petition said. “…The value in the interim stipulation is expected to be substantially less than the amount that has been or will be claimed for any losses or damages arising out of the casualty. Petitioners will file an amended stipulation for value once the repair and salvage costs are finally determined.”
The petition claims the event “was not due to any fault, neglect or want of care on the part of petitioners, the vessel, or any persons or entities for whose acts petitioners may be responsible.
While an investigation of the damage to the vessel is ongoing, the petitioners estimate repair costs of at least $28 million, salvage costs of at least $19.5 million and freight costs of about $1.17 million.
The petitioners claim they are “aware of potential demands or claims against them and/or the vessel arising out of the casualty. The identity of all such potential claimants and the amounts of their claims have not yet been fully determined.”
The petitioners said they claim exoneration from liability for any and all losses or damage from the event and from any claims for damages that have been or may be filed.
Marine protection and indemnity insurer Britannia earlier said the investigation into the container ship Dali’s collision with the Francis Scott Key bridge in Baltimore is being directed by a “unified command and joint information center” set up to coordinate responses and and to provide information. Investigators include the U.S. Coast Guard, Maryland Department of the Environment, Maryland Transportation Authority, Maryland State Police and Dali manager Synergy Marine.
“Reinsurers will bear the bulk of the insured cost of the collapse of the Francis Scott Key Bridge in Baltimore,” said Matilde Jakobsen, senior director, analytics, AM Best in March.
“Liability cover for most shipping vessels is provided through protection and indemnity insurers known as P&I Clubs”.
Jakobsen said the P&I segment is dominated by the members of the International Group of P&I Clubs, which collectively insure approximately 90% of the world’s ocean-going tonnage. As part of the International Group’s pooling arrangements, member clubs mutually reinsure each other by sharing claims above $10 million. Additionally, the group buys general excess-of-loss reinsurance cover up to $3.1 billion in the open market, Jakobsen said.
Lloyd’s Chief Executive Officer John Neal recently said he sees a “complex and expensive” industry loss after the container ship crashed into the bridge.
Lloyd’s expects a “normal level” of loss for the Baltimore bridge collapse after being rammed by a container ship on March 26, which its CEO said show the value of insurance in such events. The good news is that the event is an insured loss, said Neal in a webinar. The vessel, the bridge and the port authority in Baltimore are insured, showing the value of insurance in a complex and expensive loss, he said.
It will take time to determine insured losses for the container ship that hit a bridge in Baltimore, as a number of investigations will be involved while efforts get under way to move the ship and tally the damage to the bridge, a marine insurance expert said.
While determination of the cause will have to await an investigation, going by video and other evidence, it appears there may have been a loss of power and propulsion on the container ship before it hit the bridge as it appeared lights were going on and off in the last few moments, said Rahul Khanna, global head of marine risk consulting, Allianz Commercial. However, that is uncertain, he said.
Underwriting entities of Allianz SE have current Best’s Financial Strength Ratings of are rated A+ (Superior) and A (Excellent). Lloyd’s is rated A (Excellent) by AM Best.