This post is part of a series sponsored by AgentSync.
From time to time, we cover insurance topics that align with current events. In the past, we have covered insurance implications such as: Johnny Depp/Amber Heard affair And that Collapse of virtual currency exchange FTX.
Sadly, the most recent insurance incident to hit the headlines was a much more solemn one: the tragic freighter disaster that saw the Francis Scott Key Bridge in Baltimore collapse, killing six workers. The incident also involved public infrastructure, private industry, and even international business interests in Denmark (ship charterer Maersk) to Singapore (Ship Owner, Grace Ocean Pvt. Ltd., Synergy Marine Group Manager). Of course, there were also a number of insurance policies involved.
As the non-life insurance situation remains unstable, high loss rate The last thing insurance and reinsurance companies want or need from a climate-related catastrophe is “mass casualty incident” situation could have been avoided. Unfortunately, accidents happen. And now the world’s attention is on the protagonists of this story, including Baltimore, the state of Maryland, the ship’s owners, the ship’s charterers, and the many insurance companies supporting each group.
Who insures the Francis Scott Key Bridge?
At present (although this can hardly be expected to be a comprehensive list), the press is reporting on a variety of interested parties with insured interests in bridges, ships, ship cargo, etc.
These include:
Maryland State Transportation Authority (MDTA): This government agency isResponsible for constructing, managing, operating and improving state toll facilities and funding new revenue-generating transportation projects” So it makes sense that MDTA has a $350 million property insurance policy and $150 million in liability insurance. Reportedly,.
dali cargo ship: The vessel that hit the Key Bridge was insured. Britannia P&Iis one of the world’s oldest and largest property and casualty (P&I) insurance companies. Insurance Business Magazine reported The International Group of P&I Clubs (IGP&I), of which Britannia is a member, has over $3 billion in total reinsurance coverage. Some of the losses will undoubtedly be borne by IGP&I members, as many of them have a significant presence in insurance and reinsurance in the marine market.
Grace Ocean Private Ltd and Synergy Marine Group: The ship’s owner and management company are both based in Singapore and have huge insurance policies on the ship. Together, these companies filed a petition in United States District Court limit their liability (and thus the insurance company’s payment obligations) based on Limitation of Liability Act of 1851. It remains to be seen whether a judge will grant the claim, based on the ship’s owners and managers’ claims that there was no fault or negligence in the accident.
In addition to these policyholders, the beneficiaries include: The families of the workers killed in the accident and the many businesses currently suffering economic losses. This is due to the closure of the ports themselves or the resulting supply chain disruptions.
Impact of key bridge collapse on large insurance industry
Experts and analysts believe that insured losses due to key bridge collapse are Largest ocean loss in historyno one is yet calling doom and gloom on the entire industry, with a potentially $4 billion loss due to a diverse and well-funded network of insurers and reinsurers. “Spreading across the global reinsurance market” As reported by CNN, John Miklas, president of the National Marine Insurers Association, said:
Due to the design of this system, the insurance industry is prepared to absorb even such large losses.bruce carnegie brown Lloyd’s of London chairman told CNBC. The insurance claim payout due to the Key Bridge collapse is “potentially the largest marine insurance loss in history, but it is not outside the scope of our plans.” This is good news for an industry already facing ongoing and devastating losses from wildfires, floods, hurricanes, and other frequent natural disasters.
Want to learn more about how insurance companies stay solvent and the role of reinsurance? Check out this article on our blog.
Baltimore’s Key Bridge Collapse Affects Different Types of Insurance Contracts
When you consider an event significant enough to close down an entire port, such as the collapse of the Quay Bridge, the claims extend far beyond the assets (bridge, ship, cargo). From liability insurance to life insurance, directors and officers insurance, and business interruption insurance, these are the most likely types of insurance policies that will pay out claims resulting from the Key Bridge collapse.
Property insurance: Whether the damage in the accident is a boat, a bridge, a car that fell into the water when the bridge collapsed, or any other type of property, a property insurance claim can protect the property owner from damage to the physical property. We can cover the cost of repair or replacement.
Marine liability insurance: In contrast to property insurance, liability insurance (also known as property insurance) is responsible for paying claims for damages that exceed the property damaged. In the case of the Key Bridge crash and collapse, two people were killed and four more were presumed dead, two survived with minor injuries, but the emotional toll this shocking incident took on them and future labor capacity remain critical. Can be seen.
Everyone from the company working on the bridge at the time of the accident to the ship’s owner and manager to the Port of Baltimore itself will be sued under liability rules. Once an investigation reveals which entity was legally at fault, it will become clearer which insurance will be responsible for how much of the cost.
Life insurance and accidental death and dismemberment (AD&D) insurance: If the workers killed in the Key Bridge crash were employed rather than contracted, their employers may have offered them lifetime employment and AD&D policies. In this case, the worker’s beneficiary will receive a death benefit along with additional benefits based on the accidental nature of the death. No amount of money can bring your loved one back, but this type of death benefit can help ease the burden of funeral and other expenses.
Cargo insurance: Cargo insurance specifically covers the value of the cargo the vessel was carrying at the time of the accident. If the shipment was not damaged in any way, its owner does not need to file a claim.Dali was carrying it when the Key Bridge collapsed. 4,700 shipping containers – Only half of the total capacity is available. Although not full, Dali’s cargo consisted of a wide variety of items, including hazardous materials. Some leaked into the Port of Baltimore, according to the National Transportation Safety Board. Cargo owners will likely end up making large cargo insurance claims to recover the cost of materials and possibly extensive cleaning.
Directors and Officers (D&O) Insurance: This type of policy protects a company’s directors and officers from legal costs and settlements incurred in the course of business. So far, no D&O claims have been reported in the news, but if information emerges that someone in a leadership position at the ship’s owner or management company made a mistake or negligence that contributed to the accident, That claim may emerge.
Credit Insurance: Port of Baltimore Japan’s largest automobile import/export site (quantity basis)There will be many businesses (such as car dealers) unable to sell vehicles while ports are closed or production capacity is limited. Without products to sell, these businesses can find it difficult to pay their bills on their own. trade credit insurance This type of policy helps businesses continue operating in the event of a sudden interruption in the ability of business customers to pay. Companies further down the supply chain may be able to receive insurance payments through trade credit insurance if their customers are unable to pay their bills due to a sudden halt in imports through Baltimore.
Business interruption insurance: Many businesses rely directly on the Port of Baltimore’s daily operations to function. Due to the closure of the port due to the bridge collapse, businesses that are unable to operate or have limited operations due to the closure of the port may apply their own business interruption policies and make claims to recover from financial losses. You may be able to do this.
Accidental Business Interruption Insurance: The impact of business interruption is not limited to businesses that are forced to suspend or cease operations due to unforeseen circumstances. If a company’s operations are interrupted for reasons such as supplies needed for its manufacturing process not arriving at the port of import, the company may be able to rely on contingent business interruption insurance. help.
The world depends on insurance. Insurance relies on infrastructure.
The collapse of the Francis Scott Key Bridge in Baltimore is a stark reminder of how interconnected the global economy is. It’s also a reminder of how important insurance coverage is when things go tragically and catastrophically wrong.
Without the help of insurance, the recovery process will be even longer, more expensive and, frankly, devastating to the industry for those who are directly and indirectly feeling the effects of the bridge collapse. It will happen. Fortunately for all involved, the global network of insurers and reinsurers should be able to meet their obligations even in this very large and costly disaster.
Everyone working in the insurance industry today should remember the important role they play in keeping the world running. We at AgentSync serve the industry as the critical technology infrastructure that enables insurers, agents, MGAs, MGUs, and everyone in between to do their jobs and ultimately rely on them. We are proud to serve our insureds.
