Insurance payouts for the Baltimore bridge collapse will be among the biggest ever seen in shipping, Lloyd’s chief executive John Neal said.
In an interview with Bloomberg, the boss of the London insurance marketplace said the loss will be a multibillion-dollar event.
The Maersk-chartered 9,962-teu Dali (built 2015), owned by Grace Ocean in Singapore, suffered a reported loss of propulsion in the early hours of Tuesday, collapsing the Francis Scott Key Bridge.
Two bodies of construction workers have been recovered and four more are presumed dead.
“This has the potential to be one of the largest marine losses in history,” Neal told Bloomberg.
But he added: “The good news with this loss is the vessel is insured, the bridge is insured, the port authority is insured.”
“From a financial perspective, yes the debates will rage about whose fault it was and who should pay, but it was insured. So the financial power is behind the loss,” Neal said.
Asked if the sector has the money to cover the losses, he responded: “This is an insured loss. So there is the financial muscle to deal with the issues we are talking about.”
“We would assume these types of losses to occur every year. This is within the levels we might expect. As money is needed, then the money will be available,” he added.
Barclays analysts estimated that insurers face claims of as much as $3bn. Damage to the bridge alone could mean $1.2bn in claims, the bank said.
Complex case
Barclays also predicted further potential liabilities of between $350m and $700m for wrongful deaths and trade disruption.
“Determining who pays those claims will rest on whether the accident was caused by negligence or mechanical failure,” Bloomberg Intelligence analysts Charles Graham and Kevin Ryan wrote in a note.
“Given the multiple parties involved, settlement of any claims is likely to be complex,” they added.
“There’s quite a complex weave of insurers that are involved with this,” Neal told Bloomberg.
TradeWinds has reported that insurance and legal teams will be leaping into action with rapid response procedures.
The Dali has cover from UK insurer Britannia P&I, which will perhaps be the most concerned party due to its covering of third-party liabilities.
The number of interested parties is likely to number in the thousands.
Neal also addressed the situation with Houthi attacks on vessels in the Red Sea.
“The Red Sea is not uninsurable. You have seen us deal with the Black Sea corridor for the transportation of grain and fertiliser,” he said.
“So for us, it’s more about the government and the politics and what you can and can’t do. So providing the agreements are in place at a government-based level, then insurers can step in and provide cover,” he told Bloomberg.
Follow TradeWinds’ coverage of the disaster here
