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Beth Breton
I recently returned from the American Bar Association’s Admiralty and Maritime Law Committee meeting in New Orleans (March 22-23) where our panel discussion examined the various issues and tasks that should happen following a serious collision between a fully-loaded passenger ferry and a bulker carrying grain.1
The made-up scenario was that a foreign-owned bulk carrier entered the waters of a U.S. port while a U.S.-owned ferry was taking its last run on a foggy night with 400 passengers aboard. They were on a collision course and saw each other on radar. However, the bulker lost steering, and the ferry realized the situation too late to slow down and avoid collision. The ferry hit the bulker’s port side, left the channel and was grounded. The bulker’s hull was penetrated from amidships aft.
To convey the underwriter’s perspective in this maritime case, panelist Peter Knowles, who is President of KALM Seas Insurance, reviewed the application process for underwriting the Hull & Machinery (H&M) and Protection & Indemnity (P&I) policies. He discussed the need for objective condition surveys before rating the risks and the need for the preferred U.S. versions of coverages for the local ferry versus the bulker’s needs as a global trader. Knowles suggested possibly placing Hull coverage in London and P&I with an International Group Club.
The next panelist represented what would be the owners’ and operators’ perspectives for the vessels. Courtney Crawford, who in real life is Senior Counsel at Matson Navigation, emphasized the importance of having procedures in place for the ship’s crew and the shoreside personnel in the event of a casualty or catastrophe, avoiding panic and guesswork. She also stressed that the top priority is the safety of passengers and crew, followed by property and environment. The next step, she maintained, is to obtain immediate assistance for the passengers, crew and vessels. Once help is underway, calls to all involved insurers would open lines of communication, so investigations could get underway. Owners should always have a designated line for their insurers and a communications specialist to handle media inquiries.
As the insurer on the panel, my views started from the point of implementing the Emergency Response Teams for both H&M and P&I. I continued with the issues of aiding the insured in securing the assets required to preserve life and property, as well as hiring the best attorneys and experts for the catastrophe. I emphasized the importance of communicating with the other insurers to divvy up responsibilities and arrange for joint surveys and interviews. Uncovering unseaworthiness or drug usage of the crew could affect coverage. I also noted that cargo underwriters will likely try to recover their losses from the bulker’s P&I. An investigation into the cause of the bulker’s steering failure and other operational issues would fall to the hired experts.
The final perspective was panelist Dr. Tim Tresierras, whose expertise is in mechanical engineering. He analyzes the causes of the loss, assures that evidence is preserved and supports legal counsel at trial. Tim discussed what evidence and information he would secure to evaluate physical and operational failures that led to the collision. GPS, logbooks, maintenance records and inspection of the bulker’s steering gear would aid in his conclusions, which he’d communicate to counsel in anticipation of a legal battle over Collision Liability.
In today’s world of immediate communication through social media, it’s crucial that ship owners get out in front of any serious casualty. They need to give prompt, accurate information to the public and work as a team with their underwriters, attorneys and experts. It won’t be fun if the crisis is real, but having all these tasks top of mind should help mitigate any damage to reputation and result in speedy resolutions to the property and liability claims that would inevitably be presented.
