Government makes $22.4 million insurance claim

Bangladesh Shipping Corporation (BSC) is seeking $22.4 million from its insurer for a cargo ship hit by a missile in March, government officials familiar with the talks said, in the first major marine insurance claim from the dispute in Ukraine, Reuters reported.

The UN shipping agency said last week it would create a safe sea corridor for merchant ships and crews stuck in the Black Sea and the Sea of ​​Azov, although shipping industry sources s expect progress to be slow. Projectiles have hit four other ships in recent days and one has sunk.

Insurance premiums have soared more than 100% for trips to the region since the start of the war. Insurers are keeping a close eye on other claims that will eventually drive up costs further.

An explosion on the night of March 2-3 rocked the Bangladesh-flagged Banglar Samriddhi and killed a crew member. The ship had been stuck in Olvia since February 24 after Ukraine closed its ports due to the Russian invasion.

Ukraine has accused the Russian military of targeting port facilities in a missile strike, while the Russian embassy in Dhaka says the circumstances of the incident are ‘being established’ . Russia denies targeting civilians or merchant ships.

The ship’s owner, BSC, has since filed a claim with its insurer after abandoning the ship, a senior BSC official said.

The war risk cover was provided by Bangladesh’s state-owned Sadharan Bima Corporation and reinsured through Lloyd’s of London broker Tysers, a Sadharan Bima Corporation source said.

The source added that Sadharan Bima’s exposure was 10% with Tysers covering the remaining 90%.

“Fortunately, there was no cargo on board when she arrived at the port of Olvia,” the official said.

“The ship was supposed to pick up the modeling clay from the port before heading to Italy,” he said, referring to a material used in making ceramics.

Tysers did not respond to requests for comment.

BSC chief executive Commodore Suman Mahmud Sabbir separately told Reuters it would take time to process the request.

“Without withdrawing the ship outside the war zone, the war risk insurer cannot send its expert to assess the quantum of damages. We are taking all necessary measures to defend our interests for sure,” said Sabbir.

The London marine insurance market has widened the area of ​​waters it considers high risk in the region as conflict escalates and perils to merchant shipping increase.

“On paper, this should be a straightforward claim. But given the situation in Ukraine, it could take time to process, especially if more (documentation) is needed,” an insurance industry source said.

Viktor Vyshnov, deputy head of Ukraine’s maritime administration, told Reuters the ship was at anchor in the port with no crew on board. The remaining 28 crew members were evacuated to Bangladesh.

“The Harbor Master is looking for crew members to come on board,” he said.

Vyshnov confirmed that the ship’s deck was damaged when the missile hit, although it was unclear whether the engine was disabled.

Vessels usually have protection and indemnity (P&I) insurance, which covers liability claims, including environmental damage and injury. Separate hull and machinery policies cover vessels against physical damage. This is in addition to war risk coverage.

Stale Hansen, chairman and managing director of Norwegian naval insurer Skuld, told Reuters the ship had been engaged with them for P&I, adding that “given the wartime circumstances of this casualty, this loss is handled by insurers of war”.

The latest war vessel casualty was the Liberian-flagged Japanese tanker Mercer Street, which was damaged in a suspected drone attack off the coast of Oman, killing two crew members in July this year. last.

Between 1980 and 2020, less than 10 ships over 100 gross tons suffered total losses in attacks, according to analysis of data from insurer Allianz Global Corporate & Specialty.

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