What Happens When A Ship Hits A Bridge – An Insurance-Adjusted View

On March 26, a container ship collided with the Francis Scott Key Bridge over the Patapsco River in Baltimore. Eight construction workers were filing potholes on the bridge at the time of the crash. Out of the eight workers on duty, two survived the vessel’s crash, and only the bodies of the two survivors were discovered. Sadly, the other four missing men are believed to have died in the accident.

A detailed view: What happened recently in Baltimore?

According to reports, this massive blow was caused by the Dali ship losing its power, hitting the pillar of the bridge late in the night. The structure did not have pier protection because of which there was less chance of it surviving such a blog without collapsing. The ship’s auxiliary machinery and propulsion systems experienced some technical problems too when it was last checked. Although neither of the two impacted parties had any significant problems leading into that fateful day, this incident, for now, has been called an ‘accident’.

Grace Ocean Private Ltd., a Singaporean company, owned the ship, and no casualties were reported when it comes to the people on board. Fortunately, this incident happened after midnight when no locals were using the bridge. Media reports that the bridge is used by more than 30,000 cars each day. The investigation to identify the guilty party is ongoing as we write this. At this critical juncture, the cargo company is being accused of negligence and not having mechanical superiority.

This case has opened the door to numerous liabilities that will be considered thoroughly when the case is in court. Talking about the court, a few days ago, the mayor and City Council of Baltimore filed a lawsuit against the ship’s owner and the company.

Insurance liabilities and more

Large insurance companies offer marine insurance that provides a high level of protection for both the cargo and the vessels. To cover their liabilities, cargo/ marine companies frequently obtain multiple insurance policies. Since there is also third-party damage and human casualties in these situations, policies like protection and indemnity insurance may be needed to cover these kinds of liabilities. Additionally, liability insurance can be combined with other policies to provide comprehensive coverage if ports, marine infrastructure, or other vessels are damaged.

Analysts at Barclays have speculated that this could be the largest insurance loss in the marine sector to date. The estimated claims, which include bridge reconstruction costs, worker death benefits, and lost revenue due to port closures, could hit $3 billion. The ship owner will bear the majority of the liabilities because, legally speaking, static objects are not at fault if someone hits them. But in case the situation worsens, and repairs must be completed quickly, the port and the bridge could also dip into their insurance. Currently, $60 million from the emergency fund is being requested by the Biden administration to remove the debris.

This is because the port is one of the busiest ports on the US East Coast. In 2023, Baltimore saw about 52.3 million tonnes of foreign cargo pass through it. According to reports the fallout from the incident could lead to losing a revenue of up to $15 million before the debris blocking the river’s shipping lanes is removed. The insurance liabilities will be higher than anticipated because of the enormous effects this incident can have on the US economy and the global supply chain.

As a general rule, these vehicles are well-protected when it comes to ship insurance. In this instance, the Britannia Protection and Indemnity Club provided insurance for the ship. Additionally, these insurers are supported by other insurance providers and reinsurers. Furthermore, an insurance called shipowner’s insurance might help cover some of the liability costs. The business has cleverly argued in its petition that the present value of the ship, or $42.5 million, should be the maximum amount of liability. The owner of the Titanic ship also utilized this 1851 law to lessen their liability claims. The outcome of the court case would be fascinating to observe.

Since both parties have comprehensive insurance, a portion of the losses will be covered, and the families of the departed could receive the defined compensation.

These marine insurance plans are highly tailored to each company’s needs and the size of the business. To accommodate the needs and demands of the company, it can have a variety of add-ons. Come back to this page for more information. We try to keep up with industry developments and work to make sense of the complex world of insurance. Contact us if you seek personalized quotes for any of your insurance requirements. We serve both individual policyholders and small business owners.