Tag: marine insurance

From July, EU based insurance firms will no longer be able to insure any ship carrying Iranian oil In ten days on July 1st a sweeping European Union ban on Iranian imports will go into effect in response to the Islamic Republic's burgeoning nuclear program. In addition, and just as importantly, EU based insurance firms will no longer be able to insure any ship carrying Iranian oil.Iran is OPEC's second biggest oil producer behind Saudi Arabia. Oil analysts at Citigroup expect that Iran will still be sending out 1.25 million barrels a day, about half of last year's production.Brent crude is currently trading in the $95 dollar a barrel range , that's down eleven percent year to date. Light sweet is in the $83 dollar a barrel range, down 15% year to date.Ray Carbone is President of Paramount Options. He believes we'll see an upward trend before the July 1st deadline but it's unclear how high oil could go. Carbone says "it depends to a large degree on how much of Iran's share of oil OPEC is willing to pump out and that's still a question mark."Despite the EU ban several countries will still be importing Iranian oil. On the ...

$7.6 billion should there be an accident on an Iranian oil tanker coming to Japan Last week, the Japanese government's cabinet ministers both approved and submitted a bill to the Diet that allows insurance coverage to be made on oil imports from Iran. This is in direct opposition to the ban on Iranian oil insurance from the European Union that will take effect on July 1st. If passed by parliament, the bill would permit the government to make payments as high as $7.6 billion should there be an accident on an Iranian oil tanker coming to Japan.While the European Union is showing no signs of leniency, Japan has requested to be exempted from the ban on insurance of Iranian oil exports. The Japanese government has also made it clear that it has no intentions to stop importing oil from the Middle Eastern nation. The European Union's ban is just one of many attempts by Western nations to put sanctions on Iran with the hopes of convincing Tehran to abandon its nuclear development program via depleting its revenue sources. While not stopping altogether, Japan has reduced the amount of its oil imports from Iran, despite the sharply increasing demand after halting ...

European Union oil embargo on Iran will take effect in July Marine insurance, or lack of it, may yet turn out to be the most effective sanction used by Western nations in 17 years of tightening the screws on Iran's nuclear program.A European Union oil embargo on Iran, set to take effect in July, prohibits EU insurers from covering Iranian oil exports anywhere in the world. With around 90 percent of the world's tanker insurance based in the West, the arcane world of reinsurance and liability coverage has become a powerful weapon.Iran, OPEC's second-largest producer, exports most of its 2.2 million barrels of oil per day to Asia, and the four main buyers - China, India, Japan and South Korea - have yet to find a way to replace the predominantly Western cover for the giant crude oil cargoes en route from Iran to refineries across Asia. And that could dent Iranian crude exports to key markets, particularly Japan, cutting off a valuable source of Tehran's foreign exchange income. Crude oil prices have risen close to 40 percent to above $100 per barrel since October, partly on fears over supply disruptions from Iran."The bottleneck is insurance. If that's not settled, ...

Ship owners must alert insurer of Iran oil voyages Ship owners covered by Japan P&I club must alert the maritime insurer in advance of any plans to transport Iranian oil and petrochemicals that could fall foul of Western sanctions, the insurer said.The United States and European Union have tightened measures aimed at reducing Iran's oil trade, stemming the flow of petrodollars to Tehran to force the OPEC member to halt a nuclear programme the West suspects is intended to produce weapons.European insurers and reinsurers will be prohibited from indemnifying ships carrying Iranian petrochemicals anywhere in the world from May, and crude and oil products from July.Although Japan's P&I Club, which provides insurance for shipping companies, does not directly fall under the sanctions regime, it is largely dependent on the European reinsurance market to hedge its risk."Any reinsurers including other (P&I clubs) subject to EU legislation will not be able to pay out if a claim involves a sanctioned cargo," said Japan's main ship insurer in a circular to its members on Tuesday."This will impact the member's ability to make a recovery from the club as the club is not able to pay out on any claim in relation to which ...

INSA requests incurance cover Shipowners body INSA said it has requested the European Union (EU) to continue providing insurance cover to Indian ships for carrying oil from Iran, which is facing sanctions from the US and Europe."We have written to the European Union to allow its protection and indemnity cover (P&I) club to continue extending cover to Indian vessels," the Indian National Shipowners Association (INSA) CEO Anil Devli told PTI.INSA has mentioned that not providing insurance cover would be against the International Convention on Civil Liability for Oil Pollution Damage, Devli said.The sanctions prohibit EU-based entities from providing insurance and guarantees for transportation of oil from Iran. Most of the Indian shipping lines take protection and indemnity cover (P&I) mainly from them.Shipowners have expressed apprehensions that they may not get international insurance cover following the sanctions, announced on January 23.Earlier, the government said that India is considering providing sovereignguarantee to domestic shipping lines for import of crude oil from Iran. SCI, which operates about 40 tankers, will be one of the most affected companies as it will lose its EU insurance coverage for oil fleet operating in Iran from July 1, as European insurers will be prohibited from indemnifying ships ...

Responsibility of the owner or the insurer towards the payment of damage Granting relief to the Romanian insurer of the MV Rak carrier - a vessel that sank off Mumbai's coast in August last year - the Bombay High Court directed the Director General (DG) (Shipping) to give the insurance firm a hearing before black-listing it and preventing other vessels, insured by the firm, from entering Indian ports.Widening the issue, Justice P B Majmudar and Justice R D Dhanuka also asked the Qatar-based company Delta - that owned the MV Rak - and its Dubai-based charterer and agent to be joined as parties in the litigation.The court said the issue of the responsibility of the owner or the insurer towards the payment of damages for environment pollution, caused by the sunken ship, needs to be ascertained."Somewhere it should be sorted out," the court said pointing out that pollution caused by the leakage of oil from a sinking vessel poses serious environmental hazard. The court said it needs to be determined whether or not an insurer can be held accountable for the damages if the owner of the vessel fails to respond.In the interim period, however, there would be no restriction ...

Professional indemnity cover essential in litigious shipping industry International Transport Intermediaries Club (ITIC) has warned that, in today's increasingly litigious business environment, there is a growing need for shipping professionals to have third-party indemnity insurance cover. This can be the case even in those sectors where insurance has not previously been deemed necessary, and in cases where, despite a favourable outcome to legal proceedings, substantial costs may be unrecoverable.Writing in its newsletter, The Wire, the latest issue of which is dedicated to the hydrographic sector, ITIC cites by way of example a US court ruling which held that the then-US Hydrographic Office (USHO) was not negligent in causing a passenger ship to ground between Nantucket and Martha's Vineyard after the ship's owner claimed that a reef had been charted negligently.Firstly, the court held that the error on the chart was not a result of any negligence by the USHO because the organisation conducted the survey in 1939 using state-of-the-art techniques. It also found that there was no pressing need for the USHO's successor, the National Oceanic and Atmospheric Association (NOAA), to perform a new survey. Finally, the court ruled that the ship did not actually rely on the defective chart ...

Validus Holdings' likely claims payout on the Costa Concordia disaster will not increase Validus Holdings' likely claims payout on the Costa Concordia disaster will not increase even if insured losses are much higher than currently forecast.The Bermuda reinsurer's chairman and CEO Ed Noonan told The Royal Gazette that the company's estimated loss of up to $65 million resulting from the cruise ship disaster was not a surprise, given the company's significant presence in the marine market.His comments came after Validus's announcement of a narrow full-year profit in a challenging 2011.Validus announced last week that it could be on the hook for between $50 million and $65 million based on total estimated insured losses from the cruise ship tragedy of $845 million to $950 million, representing a share of between six and seven percent of the industry-wide loss."It's right in line with our market share," Mr Noonan said. "We a big marine insurer in Bermuda and in London."The interesting thing about this is that no one really knows yet what the industry losses will be. But even if it goes to $1.5 billion our loss does not change, because of the protection we have bought."The Costa Concordia ran aground and came ...

Owners to declare whether the Rena is considered to be still in route Cargo owners have begun lodging claims against Mediterranean Shipping Co., the charterer of the grounded Rena in New Zealand.MSC is waiting for the ship's owner, Costamare, to formally declare whether the Rena is considered to be still in route.If the ship is declared to be not on a "continuing voyage," salvors will have some rights to the cargo, MSC's general manager, Phil Abraham told the New Zealand Herald.Uncertainty over whether the containers will be recovered has meant customers, many with household possessions on board, cannot make claims to their insurers. Abraham said some large shipping companies with cargo on board had already lodged claims with his firm."We are dealing with those but we are having to wait to see what the owners and salvors are going to do," he said.Costamare, which has insured its cargo with the Swedish P&I Club, has 60 days from the day of the Rena's grounding on Oct. 5 to file an action in a court in New Zealand or another jurisdiction to limit its liability in the accident. Source: Journal of Commerce

Discounts of up to 35% A number of kidnap and ransom insurers are demanding the presence of armed guards on vessels transiting the Gulf of Aden and the Indian Ocean before they will provide cover, and others are offering discounts of up to 35% to shipowners employing private security firms for voyages in high-risk areas.For an average vessel valued at $20m, the starting price for a policy is in the region of $35,000 for a seven-day transit of the Gulf of Aden. With armed guards on board and a K&R policy in place, a discount of 35% would represent a saving of $12,250.While no insurer was prepared to confirm they were offering such discounts or requiring the use of armed guards when underwriting policies, some told Lloyd's List they offered some form of discount on the war rate for vessels transiting pirate hotspots.Reductions in premiums are made for the use of private security, as well as for vessels that have a K&R policy and those that have implemented Best Management Practice 3 or 4.When asked if he was aware of underwriters offering discounts for armed guards, Lloyd's Market Association senior executive Neil Roberts said: "I'm sure it's true, but this ...