Baltimore Bridge Collapse – P&I Insurance

A bridge in Baltimore, US, known as the The Francis Scott Key Bridge collapsed today 26.03.2024, after a ship collided with it. Several vehicles fell off the bridge into the river below raising fears of loss of life and property.

While damage to the vessel would be covered under Hull & Machinery (H&M), the Protection & Indemnity (P&I) policy of the vessel would cover the third party liabilities arising out of the collision, which are summarized as under:

DAMAGE TO THE BRIDGE: The fixed and floating objects (FFO) liability cover of P&I policy would trigger. This would cover liability to pay damages or compensation for any loss of or damage to any property whether on land or water during the operation of the insured vessel.

POLLUTION: It is possible that there could be spillage of fuel or other pollutants, then the policy would pay for actual or threatened escape or discharge of oil or other polluting substance, costs of measures reasonably taken for preventing or minimizing pollution. The term “actual or threatened” is important as the insured need not demonstrate that pollution would have happened or did happen as a precondition for coverage.

WRECK REMOVAL: If the vessel has been damaged and is wrecked, the policy would pay for raising, removal, destruction, lighting or marking of the wreck of the Insured Vessel. If towage is involved, the liability for towage is covered.

CREW: The P&I policy would cover any liability towards crew due injury or death. Here it is reported that there has been no casualty of seafarers.

PERSONAL INJURY TO THIRD PARTIES: There are reports of cars along with occupants falling into the river and still unaccounted for. The policy covers liability for injury, illness or death of persons other than Crew or Passengers due to the operation of the vessel. Salvage operations are underway as of now, the liability towards the same is also covered.

CARGO: The policy covers liability for cargo loss, shortage, damage, delay, or other responsibility when they relate to Cargo intended to be or being or having been carried in, on or by the Insured Vessel including disposal of damaged cargo and failure of consignee to remove cargo.

FINES AND PENALTIES: Any fines and penalties due to short delivery of cargo or accidental pollution by oil or any other substance, if it has happened.

This is a typical outline of coverage offered by a P&I Club. The limit of indemnity is usually UNLIMITED unless specified. For  pollution, the LOI may be limited to US$ 1 Billion and for cargo liability can be US$ 500 Million respectively.

The P&I cover is one of the widest forms of insurance coverage available and has a broad sweep of coverage. This is explained by the fact the insurance cover is usually granted by clubs to their own members and there is a mutuality of interests involved.




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