Here we are representing a marine insurance case to demonstrate how easily a small incident can escalate various parties and processes which also get involved in an emergency situation. It will also talk about the intricacies involved between various parties, including marine ocean insurance, in resolving the issues.
To present our case, we have created a hypothetical story which would built around a tanker and what are the situations through which that tanker must pass through. The following are the two main parties in our story.
- Tanker Name= L.K
- Shipowner= K.S Shipping
Let’s start discussing issues which L.K faces during its voyage and how the shipowner and other parties handle the situation.
It is winter night and L.K, a chemical tanker, is travelling at 12 knots en route from London to Sweden. Loaded with caustic soda, it is 100m long and equipped with a 5,000 HP MAN B&W 7S35MC engine. There are northerly winds, and more wind is also forecasted.
The First Sign of Problems
The vessel reports issues with the turbocharger and loud voices are also heard. However, the tanker can navigate at low RPMs without any issue. In this situation, the following actions need to be taken by different parties –
- Master – Now the master of L.K must follow the company’s procedures. It may include informing the superintendent, or as the situation demands, call the emergency number.
- Navigate Response – The crew members may contact their family members and friends and inform them about various issues associated with the vessel. These messages can be posted on social media platforms, from where the press may pick them up.
- Government Agency managing water transportation – As the climatic conditions are expected to deteriorate further, it contacts the ship to ensure there are no technical issues.
- Shipowner – Here, the shipowner, K.S Shipping, advises the master to seek shelter and a proper spot for anchoring.
The Second Notification from the Vessel
The main engine is completely broken down when there is a cylinder unit problem, and as per the Chief Engineer, it can’t be repaired. Now, the vessel has started drifting in northerly winds of Beaufort force 7 and rough seas. In this situation, the following actions need to be taken by different parties –
- Master – The shipowner and the rescue coordination centre have been informed that L.K is now ‘Not Under Command’ (NUC) and now the NUC lights have been turned on. With these conditions, L.K would be able to run for about 18-20 hours.
- Shipowner – The company mobilises its own emergency team and decides to transfer the cargo to another vessel. It starts preparing for loading condition and contacts the navigate response, which is the media management company, to appraise them of the current situation.
- Government Agency managing water transportation – It contacts the vessel to find out from the master- how many people are on-board, what are the weather conditions, the master’s intended course of action and whether any assistance is required or not.
Then the government agency also contacts the coastguard and informs them about the situation and warns them that they may require at the scene within 6-7 hours, if necessary. It also finds out any immediate risks in the area.
- Navigate Response – It helps the company in preparing a short-statement which should not be posted on the website but can be emailed to reporters and other concerned parties if asked for. Further, Navigate Response also stresses upon the need to carefully review the social media to keep any negative news away. Navigate Response works to find out that whether any of the other parties involved are planning to post information through their own social media channels or not.
- Marine Cargo Insurance Company – As the shipowner has a marine cargo insurance policy, it approaches the insurer for the claim settlement. Here the marine cargo insurer specialists begin to secure the apt tug commercial contract, establishing the crew’s capabilities to fix temporary repair work and exploring various available options.
The marine insurer also contacts the salvage brokers to find out the rate for tugs in the area. After that, the marine cargo insurer contacts the ship owner with recommendations regarding the available options and informs its own technical department about the situation.
The Operation Starts
Tugs are sought to bring the vessel safely.
- Marine Cargo Insurance Company – It receives different options from salvage broker and discusses the same with the shipowner.
- Shipowner – The various options suggested by the marine cargo insurance company are discussed with its own team, and a decision is made with regards to the available tug options.
- Navigate Response – As now the concrete action has been taken and shared, it advises the shipowner to post a statement on its website and gets ready to face questions.
Towage, Evacuation and Grounding
The insurer appoints specialists who review the towage situation and finds out that the operation is a salvage operation. The team of specialists scrutinizes the situation to rule out the possibility of deliberate loss. The team submits its report to the marine insurance company who thoroughly reviews it and agrees to submit the claim accordingly.
Safe and Sound
The vessel has been successfully salvaged and is safely towed.