The owner of the delinquent ship in Egypt faces demands to pay millions of dollars in compensation

Reuters revealed, on the evening of Wednesday, March 24, 2021, according to sources in the insurance sector, that the owner of one of the largest container ships in the world, which is currently linked to the Suez Canal, he and the insurance companies are facing millions of dollars in claims even if the ship is quickly resold.

The Suez Canal Authority said in a statement that the 400-meter-long vessel (Evergiven), with a tonnage of 224,000 tons, ran aground on Wednesday morning, after it misdirected amid strong winds and a dust storm, threatening to disrupt global shipments for days.

Re-float the vessel

The Gulf Agency for Maritime Services in Dubai said that the authorities have been working to reshape the ship this afternoon, and that previous information about a partial re-float was inaccurate.

Meanwhile, insurance agents and brokers said that the ship’s owner, the Japanese company Choi Kisan K.K., and insurance companies may face claims from the Suez Canal Authority for lost revenue and other ships that have disrupted their movement.

“All roads lead to the ship,” said David Smith, director of the marine insurance brokerage office, McGill & Co. Choi Kisan could not be reached for comment.

Large container ships

Insurance industry sources say that container ships of this size are usually insured against damage to structure and equipment. Two sources said the ship is insured on the Japanese market.

The cost of rescuing the ship is also borne by the company insuring the hull and equipment.

“Perhaps it is the biggest disaster to befall a container ship in the world without the ship itself being lost,” said a shipping lawyer, who asked not to be named.

Martin Schottiefer, a spokesman for the Dutch maritime services company “Buscales”, told “Reuters” that its “named” ship rescue unit had been tasked with participating in the operation. A team of about ten individuals is heading to Egypt.

The owners of the cargo ship

The owners of the ship’s cargo and other cargo stuck in the canal are also likely to claim damages from the ship insuring company for damages to perishable goods or delayed deliveries.

“The continued buildup of ships is creating enormous problems in the supply chain,” said Marcus Baker, head of shipping and shipping at Marsh Insurance Brokerage.

For its part, the British Protection and Compensation Club said, in a statement, to “Reuters” by e-mail, that it is the protection and compensation authority for the vessel “Ever Giffen”, but declined to give further details. This type of insurance covers claims related to pollution and human injuries.

The bulk of these insurance claims are likely to be reinsured through a program run by the Global Protection and Compensation Clubs group, said Smith of McGill’s office.

30 ships stranded

Local sources said that there are at least 30 ships stranded north of “Evergiven”, and three ships to the south. There may be dozens of ships also parked at the northern and southern entrances to the canal.

Kepler, a data analysis company, said the disruptions were affecting more than 20 tankers loaded with crude oil and refined products.

Rahul Khanna, director of marine risk advisory at Allianz Global Corporation and Specialization, said there could also be claims for damage to the canal. Pictures shown by the Suez Canal Authority show a digger lifting sand and rocks on the bank of the canal around the bow of the ship.

While ship stranding is the common cause of shipping accidents in the canal, there have been 25 such accidents in the last ten years, according to the Allianz Global Corporation.

However, it is unlikely that insurance companies will face claims related to the leakage of materials into the canal water. The ship’s technical manager, Penhard Scholte, said there had been no reports of contamination.

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