The collapse of a bridge near the Port of Baltimore is poised to have significant repercussions for reinsurers and the broader marine insurance market, as one of the busiest ports in the mid-Atlantic region grinds to a halt.
In the early hours of March 26, the Francis Scott Key Bridge plunged into the water after being struck by a cargo ship departing for Colombo, Sri Lanka, prompting Maryland Governor Wes Moore to declare a state of emergency. Rescue efforts were swiftly initiated by emergency personnel.
According to media reports, crew members aboard the Singapore-registered container ship Dali had alerted the Maryland Department of Transportation just prior to the accident, indicating a loss of vessel control and the possibility of a collision with the bridge.
While the aftermath of the accident is expected to generate a complex array of claims and liability issues that may take years to resolve, the financial ramifications are anticipated to weigh heavily on the reinsurance industry.
Loretta Worters, a spokesperson for the Insurance Information Institute, remarked, “No doubt both marine insurers and reinsurers will be involved with this loss.”
The vessel Dali is owned by Grace Ocean Pte. Ltd., managed by Synergy Marine Pte. Ltd., and insured by The Britannia Steam Ship Insurance Association Ltd. (Britannia P&I Club), a protection and indemnity (P&I) club that provides coverage for the global shipping industry.
A spokesperson for Britannia P&I Club confirmed that all crew members and the two pilots onboard the Dali had been safely accounted for, though the exact cause of the incident is yet to be determined.
While it remains uncertain if the insured limit on the property placement will fully cover replacement costs, Chubb Ltd. is reported as the lead insurer of the bridge, with potential claims likely to be subrogated to the shipowner’s insurance.
Worters noted that the International Group of P&I Associations, supported by AXA XL, would likely bear the brunt of the incident’s impact, while Aon PLC is understood to cover the property placement for the State of Maryland’s bridges and tunnels.
The complexity of the claims spectrum encompasses various lines of business, including inland marine insurance, liability insurance, and business interruption insurance, which serves to mitigate revenue loss or expenses incurred during bridge repair or reconstruction.
Despite the scale of the incident, there is no anticipated environmental impact akin to that of an oil tanker accident. Britannia P&I Club affirmed that no pollution had been associated with the bridge collapse.
This incident draws parallels to the May 1980 collapse of the Sunshine Skyway Bridge in Tampa, Florida, where the M/V Summit Venture collided with one of the bridge’s supports during a storm, resulting in numerous casualties.
