Suez Canal blockage raises many questions about future claims modelling, says NI webinar
The Ever Given case is another reminder of the fragility of global supply chains and the importance of shipping but it raises some important questions about the challenges facing insurers when modelling for such claims, delegates attending a Nautical Institute webinar were told.
While the initial claim by the Suez Canal Authority was in the region of $900m it could end up being substantially lower, and underwriters are now asking whether they need to change their modelling when calculating for such big claims in the future?
Clyde & Co partners Simon Culhane and Jai Sharma, who legally represent over $170m of cargo aboard the vessel when the incident occurred, discussed the legal complexities of the case during the ‘Ever Given Cargo Webinar’ with members of The Nautical institute (NI).
“The original claim from the SCA for over $900m have caused underwriters to question if they could be exposed to far greater limits than are currently anticipated,” said Mr Culhane.
“If you look at this voyage, the statistical risk on paper of such a casualty is modest,” said Jai Sharma, “but in practice it was a substantial exposure for insurers that is difficult to model.”
What is your exposure? $150m or $900m, and will it cause people to re-assess expectations arising from casualties in Suez, he told delegates.
An investigation into the cause of the blockage, which led to the death of a worker during the salvage operation, is still ongoing, making it difficult to establish liability and whether any damages must be paid.
The Ever Given Cargo webinar is one in a series of NI-hosted talks that explore the maritime industry’s biggest issues. For more information please visit the NI’s website https://www.nautinst.org/