The maritime industry lags behind automotive when it comes to cooperating on safety and reliability and it needs to catch up according to maritime industry association International Union of Marine Insurance (IUMI).
The clarion call follows a report by Marine Propulsion which uncovered lost opportunities to improve equipment safety and reliability due to the structure of marine insurance, which does not cover faulty design. If equipment goes wrong, shipowners must choose between battling suppliers to prove liability or filing insurance claims that, though easier to pursue, do not address underlying failures.
IUMI loss prevention technical chair Pascal Dubois confirmed that equipment faults are rarely covered in insurance policies. He accepted that participating in the improvement of ship technology was a topic that required the attention of insurers.
“Insurers cannot replace the responsibility of the manufacturers in their duty of building products,” he said. “But to ease the creation of safer and more advanced ship design and technology, a global collaboration of all stakeholders involved in the shipping industry could be considered.”
Such collaborations have long existed between car manufacturers and insurers, Mr Dubois said. In shipping, stakeholders would include insurers, class societies, shipbuilders, systems and equipment suppliers and shipowners.
IUMI ocean hull technical committee chair Rama Chandran said the idea of shipowners choosing easier claim options was not a surprise.
“As insurers we had suspected in some machinery claims that it is more likely to be material failure due to an inherent defect or poor design,” he said. “But consequential losses are covered, and the cost of equipment is quite low in the scheme of things, which inhibits insurers from pursuing expensive forensic investigations.”
IUMI loss prevention technical committee member Roberto Spanu added that rules and regulations govern the formal investigation of serious incidents, including loss of life and pollution. But he noted a lack of best practice or a common industry approach to encourage the full participation of all stakeholders.
Mr Spanu suggested that the relationship between insurer and insured could also be improved. “The reliability and, most importantly, the safety of the shipping industry indeed can benefit from a more proactive approach focusing not only on the payment of claims, but also the real cause of an occurrence, for the purpose of reducing the probability and consequence of it occurring again.”