Page 35 - Insurance Times July 2021

These are typically covered by one of 13 mutual with up to 20 cargo interests per container. It has also
insurance groups globally (the protection and indemnity been surmised that it may take anything upto a decade
insurance clubs) which provide marine liability cover to to conclude.
ship owners for approximately 90% of the world's
ocean-going tonnage. In case of Ever Given it is the UK Y How much cargo was Ever Given carrying?
P&I Club. The Ever Given was carrying 18,300 containers when

Liability claims may come from organizations such as it was grounded in the Suez Canal. (20 foot and 40 foot
the Suez Canal Authority for loss of revenues (and also containers)
potential damage to the canal), as well as from other
vessels blocked in the area (business interruption/loss Y How will this impact the release of cargo on
of hire, or claims for compensation of cargo delays). Ever Given?
Now that the vessel owner has declared General
Y What are the anticipated cargo-related Average, the appointed General Average adjusters will
claims? assess each interest's value on board (termed
The cargo on the vessel is also insured separately. The contributory value) and apply a formula that
initial reports indicate that there has not been determines the financial contribution of each interest.
significant physical damage to the cargo on board in this Cargo owners and other interests will then need to
incident. The vessel seems to have maintained its furnish a General Average Guarantee to release their
power supply, so any refrigerated cargo is expected to interests.
still be in good condition. Insurance can speed up the cargo release process by

However, there is the potential for cargo claims providing the General Average Guarantees to meet the
resulting from damage caused to perishable goods from insured cargo owner's contribution and facilitate
delays. Delay in arrival of project cargo in transit would release of the cargo while uninsured shippers need a
also culminate in Loss of Profit claims under the Cash Deposit to obtain release of the uninsured cargo.
corresponding marine and engineering policies such as However, the process is complex it would also be time
Delay in Start-Up Insurance (DSU) policies or Marine consuming.
Loss of Profit (MLOP) policies.
Y Will a separate Salvage Guarantee also be
Y Declaration of General Average?
required?
Ever Given's Japanese ship-owner Shoei Kisen declared
Since the General Average procedure may be a very
'general average' on 1st April, 2021.
lengthy process it is possible that the salvors may require
General Average is a legal principle of maritime law. a separate Salvage Guarantee before allowing the
General Average is all loss which arises in consequence goods to be released.
of extraordinary sacrifices made or expenses incurred
In such a situation, the insurers would also have to
for the preservation of the ship and cargo and other
interests in the adventure such as freight and container
within general average, and must be borne
proportionately by all who are interested.

Y What will the General Average process be
like?
Richards Hogg Lindley have been appointed as General
Average adjusters.
The General Average adjuster sources said that while
the claim would be quite complex, given that the
20,000 teu (twenty foot equivalent units) Ever Given
was carrying thousands of 20 and 40 foot containers

The Insurance Times, July 2021 35