January 14, 2004
Move to cut shipbuilder's risk claims
The Salvage Association, the world's largest marine casualty surveying organization, is playing a key role in the London marine insurance market's efforts to reduce shipbuilder's risk claims, which have reached unacceptable levels.
Underwriters have suffered a series of heavy claims, led by the fire-ravaged cruiseship Diamond Princess in a Japanese shipyard in November 2002, said to have cost $250 million or more, and the cruiseship Westerdam in an Italian yard in October 2003, resulting in claims of $50 million or more.
Premium rates for this class of business have moved sharply higher. Last month, the London market's Joint Hull Committee (JHC), recommended that a new risk assessment provision be included in all policies. The new JHC Warranty JH143 calls for surveys of affected shipyards to assess their safety policy and practices.
Salvage Association managing director John Lillie, said today: "We have been very pleased to help underwriters in this important area, and our staff surveyors around the world are ready to service the new warranty." In fact, reports Lillie, the Salvage Association has already received instructions to carry out several of the new surveys and more were in the pipeline.
The Salvage Association, which is part of the British Marine Technology (BMT) group, has developed a new survey format under its "ShipShape" brand to give as much consistency as possible to the survey results. Underwriters and shipyards alike are reportedly very happy with the first completed surveys, says Lillie.
He noted that Salvage Association surveyors have been, and still are, engaged in all of the recent large shipyard casualties, giving them a close, first-hand knowledge of the problems.
"I am confident that these new measures will be successful in reducing shipyard risks," he says.