Average main engine damage claim tops $500,000

NOVEMBER 15, 2015 — A new report from Gothenburg, Sweden, based mutual insurer the Swedish Club shows that incorrect maintenance and repair continue to be the most frequent cause of main engine damage – a trend which has continued unabated since the Club began monitoring the issue nearly ten years ago.

Entitled "Main Engine Damage," the report investigates more than 1,000 Hull and Machinery claims relating to over 5,400 vessel years of statistics.

"Main engine damage makes up nearly 35% of machinery claims costs," says Lars Malm, Director, Strategic Business Development and Client Relationship for the Swedish Club. "It is the most expensive category of claim with an average cost of over half a million U.S. dollars per claim. Yet most engine damage, as with so many claims we see in many different areas of our business, remains related to incorrect repairs and maintenance. Numerous cases have been noted where damage occurs shortly after the engines have been overhauled by ship or shore staff."

With an average cost per claim of $926,000, lubrication failure is still the most costly cause of damage to the main engine, due to consequential damage to expensive parts such as crankshafts etc.

"We are seeing crew with insufficient experience and training; experts not in attendance at major overhauls; contaminated lubrication oil and contaminated bunkers; and engine components not operated or overhauled as per management instructions," says Mr Malm. "It is a catalog of errors which can only be remedied by the implementation of a proper management system, backed up by comprehensive audit and inspection."

The report contains good news for the Korean shipbuilding industry: vessels built in Korea, which account for almost 31% of the Club's entries, have contributed to only 12% of the total cost of main engine claims in the last three years.

Despite technical advances since the Swedish Club published its last report on this topic in 2011, vessels with low speed engines continue to incur proportionally fewer claims than those with medium and high speed engines, with 57% of club entries in this category responsible for only 40% of main engine claims cost.

You can download the full report HERE

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