The number of marine vessel strandings along the South Africa coastline should serve as a warning to local ship owners who are sending an underinsured or uninsured fleet out to sea and in time could have a negative impact on the maritime insurance industry.
“We are hoping that the publicity surrounding the grounding of Eihatsu Maru last week serves as a warning to our local maritime industry. Although this particular vessel has been freed, the current bill for salvage operations sits at about R6 million,” says Mike Brews, Chief Operating Officer from Associated Marine, a division of Santam, South Africa’s largest insurer.
It is not clear whether the vessel, registered in Tokyo, is insured or not. If not, the South African public will be held responsible for the tab.
Local ship owners need to understand the potential consequences for their ships and their business if they are found in a similar situation without being fully insured.
“A grounded ship without insurance can be arrested, as well as its cargo, until the debt is cleared or a guarantee is arranged. In the case that the debt is not cleared, the ship and its cargo can be sold to defray expenses,” warns Brews.
Brews also cautions that the South African maritime salvage industry may be influenced negatively by the increase in the number of strandings along our coastline. The tugs involved in marine salvage are faced with special risks in the course of business and therefore must be fully insured.
“Part of the rating process of salvage vessels takes into consideration the average number of salvages likely per year and the risk and the potential for damage. If the risk of exposure to these types of incidents is on the rise, the local industry may feel the knock on effect,” concludes Brews.
