Combined insurance streamlines vessel incident response

In the event of a major incident, such as a grounding or fire, it is likely a shipowner will need both hull and machinery (H&M) and protection and indemnity (P&I) insurers involved as elements of the claim will fall on each insurance. 

A recent tug grounding on a breakwater offered an example of how such arrangements can lead to duplicated efforts, says NorthStandard head of Coastal & Inland, Nick Taylor, and NorthStandard head of Sunderland Marine, Craig McBurnie. 

The incident, which happened outside a European port during a storm, did not lead to any injuries, with the crew safely evacuated by helicopter. However, inspectors on board a patrol vessel sent out by the harbour master found fuel was leaking from the stricken tug. 

While oil booms were erected around the vessel to protect the environment, separate surveyors were appointed by P&I and H&M insurers, with both attending the scene when the weather improved. 

“With the P&I surveyor checking for pollution and monitoring the clean-up operations, the hull surveyors were more concerned by a crack in the hull plating and water in the engineroom,” explain Mr Taylor and Mr McBurnie. 

“The salvage operation itself proved successful, with an additional tug deployed to pull the stranded vessel after temporary repairs and pumping the engineroom. Nevertheless, the appointment of two surveyors meant separate lawyers and oil spill contractors were also appointed.”

Had cover been purchased from NorthStandard’s newly launched one-stop shop for H&M and P&I, fewer appointments would have been necessary. This new offer was developed in a collaboration between NorthStandard’s Coastal & Inland and Sunderland Marine teams. 

“It brings potential cost savings by packaging policies together at the outset, as well as by streamlining claims handling and enabling quicker outcomes,” say Mr Taylor and Mr McBurnie. 

“In the event of an incident, a combined claims team works closely together to provide the response across all aspects of a casualty in a collaborative manner. Where it is in the interest of the shipowner, surveyors, experts and lawyers can be jointly appointed.” 

A joint service simplifies casualty handling, reduces costs and speeds up the overall response. “This can avoid delays that may arise when insurers are not aligned and are more concerned in protecting their own exposure in the incident,” say Mr Taylor and Mr McBurnie.  

“Teams integrated across H&M and P&I also benefit from full transparency on information, allowing them to communicate with clarity with the owner, its broker and any other interested parties in the incident.” 

In the case of NorthStandard, that clarity draws on global expertise, a network of qualified lawyers, barristers, inhouse mariners and technical specialists, and support that is available immediately, 24/7. 

Vessel collisions

Collisions are another example of claims that can involve both H&M and P&I interests, with liability often split between the two covers depending on policy wordings.  

“With a combined policy, any interaction between the insurers will take place in the background without the broker or shipowner informed but not needing to co-ordinate matters,” Mr Taylor and Mr McBurnie explain. 

“Similarly, no exchange of security would be required between the insurers, which, again, would reduce the risk of delays arising during the handling of the claim.”  

Occasionally, there can be situations where the H&M and P&I interests diverge. Should this occur, NorthStandard has robust internal conflict procedures to ensure appropriate separation between claims handlers.  

“Furthermore, these exceptions do not counter the overarching benefits for owners of smaller vessels of purchasing marine insurance from a single source. After all, these are not limited to event response alone.” Under NorthStandard’s one-stop offer, its loss-prevention team works closely with owners on technical, operational and safety issues to minimise claims and maximise operational efficiency.