Suez Canal ship owners face millions in insurance claims

Grounded Suez Canal ship owners face millions in insurance claims for salvage operations and delays
2 min read
25 March, 2021
The owners of the Ever Given could face millions in insurance claims for spoiled cargo and delays to shipping.
The stuck ship is causing delays for other vessels on the Suez Canal [Getty-file]
The giant container ship wedged in the Suez Canal could result in millions of dollars in insurance claims against the vessel's owners, according to industry sources who spoke to Reuters.

The Ever Given ran aground on Tuesday when it lost steering in high winds causing the 400-metre, 224,000-tonne container vessel to become wedged in the canal and blocking the shipping lane.

A Dubai-based marine company, GAC, is attempting to release the ship, and reports on Wednesday suggested that the ship had been refloated. These reports were later found to be incorrect. 

The owners of the Ever Given, Shoei Kisen KK from Japan, could now face a slew of insurance claims from both the Suez Canal Authority and from other vessels or loss of revenue, who have had their passage hampered. 

Sources who spoke to Reuters said that large container ships, like the one stuck in the Suez, are insured for damage to the hull and machinery for $100-140 million. 

This hull and machinery insurance will be liable for the salvage operation to free the ship. 

"It is potentially the world's biggest ever container ship disaster without a ship going bang," said one shipping lawyer to Reuters, who declined to be named. 

Further insurance claims could be made by the owner of any perishable cargo that is on board the Ever Given or any of the other ships that have had their journeys delayed. 

"If you have a constant build-up of ships, there are massive supply chain issues," Marcus Baker, global head, marine and cargo at insurance broker Marsh, told Reuters.

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Local sources told Reuters that at least 30 ships to the north of the Ever Given have had their passage blocked and three to the south. 

Further insurance claims could be made for damage caused to the canal itself. Photos have shown heavy machinery removing part of the bank in an attempt to free the ship. 

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