Home Marine InsuranceClaims Lack of proper management systems prove costly for shipowners

Lack of proper management systems prove costly for shipowners

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Main Engine Damage Report cover

Main Engine Damage Report cover

A new report from The Swedish Club shows that incorrect maintenance and repair continues to be the most frequent cause of main engine damage – a trend which has continued unabated since the Club began monitoring the issue nearly ten years ago.

Main Engine Damage investigates more than 1, 000 Hull and Machinery claims relating to over 5, 400 vessel years of statistics and its findings make interesting reading.

“Main engine damage makes up nearly 35% of machinery claims costs, ” says Lars Malm, Director, Strategic Business Development and Client Relationship for The Swedish Club. “It is the most expensive category of claim with an average cost of over half a million USD per claim. Yet most engine damage, as with so many claims we see in many different areas of our business, remains related to incorrect repairs and maintenance. Numerous cases have been noted where damage occurs shortly after the engines have been overhauled by ship or shore staff.”

And with an average cost per claim of USD 926, 000 lubrication failure is still the most costly cause of damage to the main engine, due to consequential damage to expensive parts such as crankshafts etc.

“We are seeing crew with insufficient experience and training; experts not in attendance at major overhauls; contaminated lubrication oil and contaminated bunkers; and engine components not operated or overhauled as per management instructions, ” explains Mr Malm. ”It is a catalogue of errors which can only be remedied by the implementation of a proper management system, backed up by comprehensive audit and inspection.”

The Main Engine Damage report contains good news for the Korean shipbuilding industry. It points out that vessels built in Korea, which account for almost 31% of the Club’s entries, have contributed to only 12% of the total cost of main engine claims in the last three years.

Despite technical advances since the Swedish Club published its last report in 2011, vessels with low speed engines still suffer proportionally fewer claims than those with medium and high speed engines, with 57% of club entries in this category responsible for only 40% of main engine claims cost.

To read a copy of Main Engine Damage, please visit:

www.swedishclub.com/media/publications/brochures

The Swedish Club was founded in 1872 and is today a leading and diversified mutual marine insurance company, owned and controlled by its members. The Club writes Protection & Indemnity, Freight, Demurrage & Defence, Hull & Machinery, Hull Interests, Loss of Hire, War Risks, and any additional insurances required by shipowners or charterers. It also writes Hull & Machinery, War risks and Loss of Hire for Mobile Offshore Units and FPSOs.

Its head office is located in Gothenburg, Sweden, with branch offices in Piraeus, Hong Kong, Tokyo, Oslo and London.

More information about the Club is available at: www.swedishclub.com

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