Bridge collapses from vessel collisions ‘rare’, says Allianz Commercial

The dramatic collapse of the Francis Scott Key Bridge as a large container ship struck a support column leaving the Port on Baltimore on Tuesday is rare, according to Allianz Commercial’s claims data, although collisions and contact incidents with port infrastructure is the fourth-most common cause of all shipping incidents in the last decade. There have been almost 2,000 reported incidents of vessels colliding with port infrastructure worldwide over the ten years to 2022, accounting for 7% of a total 27,000 shipping incidents, according to the Allianz Commercial Safety and Shipping Review. Allianz Commercial recorded 203 contact-with-infrastructure incidents specifically involving container ships during the same period, with the most common involving collisions with port infrastructure, including harbour walls, piers and quays. “Bridge incidents such as this one are rare,” Allianz Commercial said, referencing an academic paper published at the PIANC-World Congress in 2018 that recorded 35 major bridges collapsed worldwide due to ship or barge collision between 1960 and 2015. Allianz Commercial said total vessel losses of vessels after colliding with other vessels or contact with port infrastructure is also “thankfully rare”. Over the past ten years to 2022 across all vessel types, Allianz Commercial recorded 30 total losses from collisions with other vessels and just four from contact incidents with port infrastructure, which together accounted for 4% of all total ship losses. Of 3,032 reported shipping incidents in 2022, 280 were logged as collisions involving vessels, second only to machinery damage/failure, while contact with port infrastructure totalled 155 incidents. Allianz Commercial said common causes of this type of incident can include human error and machinery, equipment or engine failure. While the sensitive recovery operation continues in Baltimore, the risk industry is tasked with determining where the liability falls and what lines of business will be impacted. Julien Horn, partner, ports & terminals and logistics at broker McGill and Partners, said a ship the size of Dali will be insured through one of the International Group of P&I Clubs for its third-party liabilities, which will spread the loss across many carriers and markets, although losses will be far reaching. “These potential liabilities go beyond the rebuilding of the bridge and will need to consider removing the bridge debris currently sitting on the ship and at the bottom of the Patapsco River. The economic disruption and pain felt by businesses and individuals in Maryland and the Baltimore economic area will be widespread and likely take years to fully comprehend and compensate those affected,” Horn said. He added that port operations need to return to normal as quickly as possible, with some port and terminal operators often covered for loss of revenue through their business interruption insurance. However, standard policies would only protect loss of revenue following an accident that damaged the insured’s owned or leased property, and it has yet to be established if the bridge was owned by the port authority or terminal operator. A second type of BI policy protects against port blockage or denial of access to the port, although Horn said this is less common. In any case, “this may be the largest example of port blockage seen by the insurance market in recent years”, he added. “As for the ports, terminals, their suppliers and stakeholders west of the Francis Scott Key Bridge, hope lies in two directions as they consider how to act, what support they may have to their path back to normal and the economic support insurance may offer. With the eyes of the world in focus, the economic drivers of the region will push to use every avenue to clear the channel and allow free access of ships to the ports and terminals in the Baltimore maritime area,” Horn explained. Allianz Commercial also affirmed that the losses are likely to fall within the ship’s P&I cover. “Outside of the implications from any tragic loss of life, the nature of the incident points to a sizeable loss, given the extent of the damage to the bridge and the surrounding area. Other potential losses could result from blocked port access, cargo loss, any environmental implications etc,” it said.

Bridge collapses from vessel collisions ‘rare’, says Allianz Commercial

Some 203 container ships have collided with infrastructure over the past ten years

Want to read this article?

Read Next

Ferma members told AI will bring risk and reward for corporate insurance buyers

Aon’s revenues up 5% as it completes $13bn NFP deal

Warmer climate spreading risk of malaria and dengue to new regions

UN launches new net-zero insurance forum to replace NZIA

Pen extends fleet capacity deal with Zurich in Republic of Ireland

Ferma members told AI will bring risk and reward for corporate insurance buyers

Aon’s revenues up 5% as it completes $13bn NFP deal

Warmer climate spreading risk of malaria and dengue to new regions

UN launches new net-zero insurance forum to replace NZIA

Pen extends fleet capacity deal with Zurich in Republic of Ireland

Want to read this article?

Read Next

Ferma members told AI will bring risk and reward for corporate insurance buyers

Aon’s revenues up 5% as it completes $13bn NFP deal

Warmer climate spreading risk of malaria and dengue to new regions

UN launches new net-zero insurance forum to replace NZIA

Pen extends fleet capacity deal with Zurich in Republic of Ireland

Related Articles