Marine Liability Insurance Increases Up To Threefold For Tankers Trading To US
Increases of as much as threefold in the cost of marine liability insurance faced owners of tankers trading to the U.S. at the recent renewal of most protection and indemnity covers.
In the wake of the Exxon Valdez disaster, increases required by the Protection and Indemnity Clubs (P&I)—the tanker owners' reinsurers and the underwriters of the excess pollution contract—have produced perhaps the biggest rise in insurance costs many shipowners have seen.
The clubs set general increases that ranged between 20 percent and 60 percent, while the cost of reinsurance bought by the International Group of P&I Clubs will be about 50 percent higher than last year. Excess pollution contracts represent one of the biggest rises. Shipowners who decide to buy annual cover for U.S. trading crude tankers under the excess contract, which provides some $200 million of pollution cover excess of $500 million, will be paying more than 13 times last year's rate.