A major oil pollution insurance claim resulting from the New Diamond casualty may have been averted after salvors managed to remove the risk of an oil spill.
The VLCC was fully laden with 270,000 tonnes of crude when it suffered a fire in its engine room off Sri Lanka, raising widespread fears of a potential pollution incident.
The 300,000-dwt New Diamond (built 2000) has now been made safe to tow after a nearly two week cooperative effort involving the 16,300-bhp firefighting vessel Boka Expedition (built 2007) and the Sri Lankan and Indian navies.
By avoiding significant pollution from the incident, the protection and indemnity West of England Club is now expected to face a lighter claims burden.
A two-week salvage operation under a Lloyd’s Open Forum contract could still prove costly for insurers but potential pollution has been the main concern.
Hull almost certainly a loss
Although the hull is almost certainly a constructive total loss, that will be an issue for its providers of hull and machinery insurance.
Lower-than-expected claims from the New Diamond will come as a relief to members of the International Group of P&I Clubs, which are already facing costly pooled claims from the bulk carrier 203,000-dwt Wakashio (built 2007), the 300,000-dwt Stellar Banner (built 2016) and the 4,900-ceu Hoegh Xiemen (built 2010).
It also appears that the loss of the 8,400-dwt livestock carrier Gulf Livestock 1 (built 2001), which is with the West of England, will also avoid a major pollution claim.
No oil has so far been detected leaking from the wreck just over two weeks after it was sunk by Typhoon Maysak off the coast of Japan.
TradeWinds understands that the depth of the wreck will make a pollution incident unlikely.
Tragic loss of 40 seafarers
The biggest claim looks like it may come from the tragic loss of 40 seafarers lives who were on board the vessel at the time. In this instance, crew cover was handled outside the vessel’s P&I cover.
There are the search and rescue and salvage costs to be met.
Generally, in the case of livestock carriers, the cargo is not included in the shipowner’s liability cover. Around 6,000 cows were lost in the casualty.
