This is how the Emma Maersk bill will be settled
Even though Maersk Line's prestige ship Emma Maersk is back on the water, there's still a bill to be paid following the accident where the ship sprang a leak, which lead to the engine room being flooded by tens of thousands of liters of sea water. The ship, the first of the carrier's E series, had to be taken out of operation for months following the accident in the Suez Canal in February, from where the ship was towed to Palermo for repairs.
The ship underwent extensive repairs, which included, among other things, the removal of the Wärtsila engine in small parts, which were then taken into pieces and repaired before being put back together again. At times, the Palermo shipyard looked like a chaotic warehouse for spare parts, though great attention was obviously paid to making sure that everything went back where it belongs.
Two bills
Following the major repair process, there are two bills to settle. The first relates to the customers whose cargo might have been delayed because a reloading had to be performed. The other relates specifically to the repairs. The Maersk Group is largely self-insured, but not entirely. The maritime insurance market is usually spread across many different players in order to minimize the risk for the individual party. In the case of Emma Maersk, the bill amounts to approximately USD 45 million, and that's just for towing the ship to Palermo and the subsequent repairs at the yard.
"That's not completely off the mark, that the final figure should come to something like that. We haven't finished adding up the final price. It's a lot of work, and we'll probably have to wait till the end of 2013 before everything has been added up," CEO of Maersk Insurance, Lars Henneberg, tells ShippingWatch.
Maersk Insurance has already earmarked USD 18.1 million for the accident in its finances, and Henneberg confirms that this is will also be the final amount Maersk Insurance itself will pay for the accident. Add to this the various potential customer claims, but that's a commercial issue to be handled by the container carrier.
Many stakeholders
Normally a small army consisting of repairmen, shipyard officials, Maersk Line, Maersk Maritime Technology, insurance companies, the accident commission, and certification bureaus become involved when accidents happen in shipping. And the number of stakeholders doesn't get smaller when the accident includes the kind of massive damages as in the case of Emma Maersk.
This means that the process could be even longer, and that it could be 2014 before the bill is finally divided between the various parties. The royally appointed adjuster will be summoned and asked to present his estimate of which expenses are related to the accident and which can be traced to "lack of maintenance." The process is similar to that of evuluating property damage.
A series of insurance companies, often as many as 20, will join the Maersk Group in paying for damages in the so-called syndicates. Codan and Catlin Group account for the majority of the expenses in the syndicate.
Related articles
Emma Maersk sailing again
For subscribers
Emma Maersk cargo relocated
For subscribers
The Emma Maersk hole will now be closed
For subscribers
