Multibillion-dollar Baltimore bridge disaster claims can be handled, ship insurer says

Insurer Britannia P&I says it is robust enough to cope with the multibillion-dollar claims after a container ship struck and brought down a large section of a bridge in Baltimore.

Britannia, which provided protection and indemnity cover for the Maersk-chartered 9,962-teu Dali (built 2015), said it contacted regulators and ratings agency S&P in the aftermath of the accident on 26 March and none of them raised any concerns.

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The company said it would take months and potentially years before there is a final conclusion to claims, which the head of Lloyd’s of London said is likely to be one of the largest marine losses in history.

Barclays analysts estimated that insurers face claims of as much as $3bn.

The ship suffered a reported loss of power and propulsion in the minutes before it struck the Francis Scott Key Bridge, leaving six people dead.

Investigators said the main focus of their inquiries is looking at electrical systems on the Dali.

“While we do not usually comment publicly on specific cases, we write this circular to address a number of questions members may have arising out of the above incident,” said Britannia.

“All members will appreciate that it would be inappropriate for us to comment further on the incident, including on causation.

“This will be determined after careful consideration of all the facts, which will take time to collect.”

But the club added that it could comment on its financial strength and cited reinsurance arrangements in place for the club as one of the 12 members of the International Group of P&I Clubs.

And it added: “None of our regulators nor S&P raised any concerns about the financial strength of Britannia P&I.”

P&I clubs, not-for-profit organisations owned by shipowners, are liable for claims including for deaths, collision damage, wreck removal and economic losses.

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The biggest claims are underpinned by the collective purchasing of reinsurance coverage of up to $3.1bn by the 12 clubs that make up the International Group.

Britannia had the fourth-largest market share of the P&I clubs by owned tonnage in 2023, according to insurance brokerage Gallagher Specialty.

The International Group of P&I Clubs covers more than 90% of oceangoing tonnage.

Britannia’s latest figures showed it dealt with claims of $169.4m in the year to February 2023. Four larger claims were dealt with by the wider pool of $74.6m.

Repair costs for the Dali alone are estimated to be at least $28m, with salvage costs likely to top $19.5m, according to court papers filed by the owners and operators on 1 April.

Lloyd’s of London CEO John Neal told Bloomberg last month that there was “financial muscle” to deal with the Dali claim.

“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 said.