Page 45 - Insurance Times December 2022

Will claims against Russian oil

tanker be paid

oon, it’s going to get a lot more difficult to get Tankers carrying Russian crude aren’t likely to dock in
S compensation for any damage caused by tankers “unfriendly” countries, but they will certainly pass close to
carrying Russian crude.
their shorelines, whether that’s when exiting the Baltic
Europe and the UK are large providers of marine through the Danish Straits or traversing the English Channel.
insurance, as well as brokerage, finance, vessel classification Russian oil tankers are now insured by Ingosstrakh Insurance
and other services that make possible the movement of oil Company, the country’s fourth-largest general insurer, which
around the world. They are also home to many of the vessels already covers some 2,000 vessels. It is also likely to cover
that ply the trade. Greek companies are the world’s top much of the so-called “ shadow fleet” of tankers expected
tanker owners. to continue carrying Russian crude next month. That’s
raising concerns.
After Dec. 5, those vessels will no longer be able to carry
Russian crude and the services won’t be available to any ship First revolves around the ability of the company to meet any
that does, European or not, unless the price paid for the really big claim resulting from the loss of a ship, with its
cargo is below a still-to-be-decided cap. The bans will be cargo ending up washed ashore on beaches. If those beaches
extended to refined products two months later. are, say, in the UK or an EU country, what is the likelihood
that claims against the vessel’s owner or charterer will be
It looks very likely that most of Russia’s exports will be carried
successful?
on its own ships, those of its remaining customers, or a
growing fleet of aging tankers owned by little-known A second question is, would Ingosstrakh be permitted by the
companies registered in jurisdictions not known for their Russian government to settle claims from “unfriendly”
openness or transparency. countries? And would companies or governments in those
countries be able to receive payments from Ingosstrakh?
Who will insure those vessels and what will that mean for
potential claimants? Think of oil-related marine insurance The EU sanctions ban provision of services, including
claims and your mind might be drawn to the sinking of the insurance, in perpetuity to a vessel that carries a cargo of
Sanchi off the coast of China in January 2018 or, more likely, Russian crude purchased at a price above the cap. So
to the grounding of the Exxon Valdez off Alaska in 1989. owners, both current and future, would be accepting Russian
cover for the rest of the vessel’s life, unless the sanctions
The sinking of the Sanchi cost insurers close to $200 million, a
are revoked.
figure that was kept low because there was no shoreline
pollution from the wreck. The Exxon Valdez disaster, which India is willing to take that risk. Port authorities will accept
coated 1,200 miles of Alaska’s coastline with oil, cost its owner liability cover for foreign ships provided by Ingosstrakh
an estimated $3.5 billion before punitive compensation, of against risks, including oil spills and collisions. The company
which $780 million was recovered from insurers. is among a list of 15 that aren’t part of the International
Group of P&I Clubs approved by the Indian government.
But these big disasters make up a tiny proportion of claims in
the shipping industry. Most are much smaller and generally China too, is likely to accept Russian insurance cover for
go unnoticed outside the companies involved. How, or even tankers discharging at its ports. Both are likely to get paid
whether, claimants will get paid for losses caused by a tanker in the event of making claims. But I’m not so sure that
carrying Russian crude are not clear. This should be a concern European countries, the UK, or the US will fare so well.
for every country whose ports or coastlines could be at risk. (Source: Business Line)

The Insurance Times December 2022 39