The owner of one of the largest container ships in the world is making massive insurance industry news.
The Ever Given insurance claims following the container ship’s disastrous blockage of the Suez Canal are expected to total millions of dollars. In fact, insurance industry news sources were already predicting that total even if the massive ship had been rapidly refloated.
The 247,000-ton, 1310-foot ship ran aground last Tuesday morning after it lost its steering.
A dust storm and high winds contributed to the container ship’s loss of control, according to a statement issued by the Suez Canal Authority (SCA). This caused the ship to become stuck in the Suez Canal, blocking global shipments in both directions for days. As a critical trade route from between the east and the west, the Ever Given insurance claims were rapidly forecasted to be in the millions and climbed with each passing day.
Authorities started working to free the ship and refloat it right away, with initial inaccurate shipping and insurance news reports suggesting that it had been partially refloated. Instead, it remained trapped in place for days to follow. The owner of the Ever Given is Shoei Kisen KK, a firm from Japan. That company and its insurers are likely to face claims from the SCA for its revenue loss. That said, it is also likely that other ships will also make claims against it. Those ships face costly losses due to the disruption in their passage through the Suez Canal.
The Ever Given insurance coverage is expected to be in the range of around $100 to $140 million.
Sources cited by Business Insider said that this type of vessel is usually covered for machinery and hull damage of about $100 to $140 million. Its coverage is in the Japanese market, said two of the sources, also cited by Reuters. Machinery and hull insurance also covers the cost of a salvage operation.
“It is potentially the world’s biggest ever container ship disaster without a ship going bang,” said an anonymous shipping industry lawyer source quoted in the BI report.
The Reuters report stated that Smit Salvage, a subsidiary of Boskalis, a Dutch marine services company, was hired to assist in the effort to move the container ship out of the way of the Suez Canal. Other types of Ever Given insurance claims will be made against its liability insurer for the losses of perishable goods and missed delivery deadlines resulting from the blockage, said several insurance industry news reports.