The Marine Insurance Industry Braces for Huge Claims from Baltimore Bridge Disaster

The marine insurance industry is preparing for what could be a wave of massive claims following the recent collision between the Dolly containership and the Francis Scott Key Bridge in Baltimore. This incident is drawing comparisons to the 2012 Costa Concordia disaster, which resulted in $1.5 billion in insurance payouts—the highest in marine insurance history.

A Potential Multi-Billion Dollar Claim

John Michas, president of the American Institute of Marine Underwriters, highlighted that the financial impact of the Baltimore Bridge disaster could be on par with the Costa Concordia tragedy. The 2012 incident, in which a luxury cruise ship capsized off the coast of Italy, led to the death of 32 people and took several years to settle insurance claims. The Dolly containership collision could result in similarly drawn-out proceedings, given the complexity of the losses.

Major Factors Influencing the Claims

The potential claims stemming from the incident could involve several key components:

Rebuilding the Bridge: The Francis Scott Key Bridge, which generated $53 million in toll revenue for the Maryland Transportation Authority in 2023, will face extensive repairs. The interruption of toll collection during reconstruction will add to the overall claims, including compensation for lost revenue.

Damage to the Ship and Cargo: The Dolly and its cargo also sustained damage in the collision. Cargo claims, business interruption losses, and property damages will be assessed, adding further to the overall financial impact.

Insurance Involvement:

• The bridge itself is insured by global insurance giant Chubb, while the Dolly is covered by Britannia P&I Club, a specialist in marine protection and indemnity insurance.

• Claims beyond $10 million will be handled by members of the International Group of P&I Clubs, a London-based consortium, with the remaining amounts likely falling to reinsurers, such as Lloyd’s of London and other global markets.

A Complex Process Ahead

The claims process will likely be lengthy and intricate, as was seen with the Ever Given containership disaster in 2021, which blocked the Suez Canal for six days. The total claims from that incident were estimated to exceed $2 billion, and the claims settlement process is still ongoing years later.

Similarly, the aftermath of the Dolly collision could take years to fully resolve. Determining liability, as in the case of Ever Given, will require thorough legal evaluation, considering the complexity of modern maritime laws and the diverse parties involved.

As the marine insurance industry braces for potentially significant claims, the Baltimore Bridge disaster is a stark reminder of the financial risks involved in global maritime operations. The outcome of these claims will not only affect the companies directly involved but also have broader implications for the marine insurance and reinsurance markets. With millions at stake, the resolution of this incident will be closely watched by the entire industry.

This event highlights the growing challenges in maritime risk management, where the stakes are not just about physical damages but also the ripple effects on global commerce and infrastructure.

The marine insurance industry is preparing for substantial claims following the recent Baltimore Bridge disaster involving the Dolly containership. This incident could rival the scale of the 2012 Costa Concordia tragedy, which saw $1.5 billion in payouts. As complex claims unfold, insurers and reinsurers brace for a lengthy process with significant financial implications.

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