This article republished courtesy of Marsh -
www.marsh.com - the original article can be found at
http://bit.ly/2xTtJ7c INSIGHTS Q3 2017
Ship Versus Ship Collision Claims
COLLISION: A FICTIONAL SCENARIO
INTRODUCTION
Ship versus ship collisions are often dangerous events with the potential to bring areas of difficulty to insurance claims that clients may not be prepared for.
While such accidents may be relatively infrequent, it is important that clients take proactive steps to manage these situations and avoid detrimental outcomes.
Failure to act efficiently and appropriately could:
• Jeopardise the ability to recover in full under the collision liability insurance.
• Undermine future strategies that seek to minimise liability towards the opponent(s).
• Result in unwanted legal and jurisdictional complexities.
• Create avoidable delays and additional financial exposures.
Early engagement with insurers, legal representation, technical survey experts, and crew are vital components in the management of collision cases.
Here, we discuss the key areas that may be common to such events and, using a fictional account of a collision incident between two vessels, we examine some of those issues through the lens of a hull and machinery policy. We will assume that the policy is written on the basis of the Institute Time Clauses (1/10/83) and where clause 8 has been amended to include 100% collision and not a three-quarter share of liability, as is the default position.
Imagine a chemical tanker is proceeding towards Singapore to discharge part of its cargo. On the approach to the port, it collides with a much larger vessel, a containership. The collision causes damage to both ships; the chemical tanker has some structural damage to its bow and bulbous bow section, but the containership is more seriously damaged, with two large puncture holes, one high above the waterline, the other below.
Because of water ingress, the containership begins to list and the services of a competent salvor are required to stabilise the vessel and take it under tow to a safe berth.
There are no reports of pollution or bodily injury to the crew, but local authorities decide to undertake a full investigation into the circumstances of the incident.
After a technical assessment, it is determined that the containership will need to be temporarily repaired at the emergency berth. Thereafter, it will have to make a short voyage to an appropriate dry-dock for repairs.
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58 | The Report • September 2017 • Issue 81
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