Page 37 - Insurance Times July 2021

The Omnibus Rule gives the club the discretion to cover Y Where is Ever Given now?
risks that do not fall expressly within the expressly It is currently at anchor in the Great Bitter Lake, where
itemized cover but which, in the opinion of the club, it is undergoing a number of technical investigations
are incidental to the operation of an insured ship and into the interplay of factors which caused the ship to
which fall broadly within the scope of club cover. It lodge itself against both banks of the canal.
would also be pertinent to mention here that this is a
discretionary power of the Board and the payments can There are suggestions that the strong winds which are
be made based on the unanimous decision of the Board
encountered along the canal pushed against the sizeable
Members in this regard.
height of the ship.
Some of the costs claimed by the SCA and/claims of
other ship-owners may be paid under this Rule. There are also suggestions of the pilot's contribution. In
cases where the engagement of pilots are necessary (i.e.
Y Will Reinsurers be impacted due to claims
compulsory pilotage), the pilot acts as the agent of the ship,
triggered by this crisis? so any imputation of fault will reflect back on the ship owner.
The P & I claim now looks likely to exceed the USD 10 However the final findings are yet to emerge.
million retention layer held by the UK Club, with which
the Ever Given was entered. In that eventuality, it will
become a pool claim, with the payout up to USD 100 Conclusion
million shared between the 13 International Group In a major development, the Suez Canal Authority has
affiliates according to a weighted formula. If the claim reduced the compensation amount sought for the Ever Given
goes beyond this the burden will fall on the reinsurance ship blockage. The compensation has now gone down to USD
markets, which take on the risk under what is the 600 million from USD 916 million which had been asked
world's largest reinsurance contract. earlier. However, negotiations are still going on in this
Apart from the P & I claim, there could similarly be Hull regard.
& Machinery and cargo reinsurance claims if the claims
in these areas exceed their reinsurance capacity. That Though the Ever Given has been freed from its grounding,
would depend on the quantum of the claims, its owners and the owners of cargo on board the vessel are
particularly if they are very large claims. finding that they are still very much lodged in a quagmire
of legal and insurance issues. Figuratively, for the Ever Given
Y What about cargo claims for delay? the transit through the canal is not yet over, in more than
Delays arose for the hundreds of ships that decided to one sense.
wait for the canal to clear. The delays may have caused
some of the cargoes on board the vessels to deteriorate References
and for delays after expiry date. As mentioned earlier, 1. 'Ever Given' vessel owner declares 'general average' By
in case of project cargoes, delays may affect deadlines.
Will Waters | Tuesday, 06 April 2021 at Lloyd's Loading
Unfortunately, there is no recourse in marine cargo List digital edition available at
insurance policies for losses due to delay, as most https://www.lloydsloadinglist.com/freight-directory/
marine cargo insurance do not cover losses due to news/%E2%80%98Ever-Given%E2%80%99-vessel-owner-
delays. declares-%E2%80%98general-average%E2%80%99/
78806.htm#.YJ9p8qHhWUk
Cls 4.5 of the Institute Cargo Clauses excludes losses due
to delay: 2. Insurers face massive bills following Suez Canal
Blockage, By Joanna England | March, 26th 2021
In no case shall this insurance cover…………….
available at https://insurtechdigital.com/insurtech/
4.5 loss damage or expense caused by delay, even insurers-face-massive-bills-following-suez-canal-
though the delay be caused by a risk insured against blockage
However there would be claims payable for delay under 3. Ever Given- What happens now? By Philip Teoh| April
Loss of Profit policies such as LOP or DSU, wherever 25th, 2021 available at https://www.maritime-
linked with project cargo, as also clarified earlier. executive.com/editorials/ever-given-what-happens-now

The Insurance Times, July 2021 37