NEW: Compulsory Marine Liability Insurance

NEW: Compulsory Marine Liability Insurance

If you are involved in the maritime and shipping industry, you will be only too familiar with the wealth of legislation and regulation with which you are obliged to comply. If you are looking to ensure that your shipping firm thrives in a competitive marketplace, contact award-winning Bahamas firm ParrisWhittaker, and we can begin working on your behalf.

When it comes to business at sea and in port, it is essential to ensure that you are fully compliant in order to protect you, your employees, your clients and your business.

The new compulsory marine liability insurance is a key issue for ship owners and their insurers. The Nairobi International Convention on the Removal of Wrecks 2007 will be fully in force for most states by the end of April 2015 – and there are some important elements which all ship-owners should take into consideration.

Under the Convention, states have the power to take measures to remove wrecks which are a hazard to navigation or to the marine environment. A wreck may include any object – such as cargo or machinery- which has been on board a vessel. The right of recovery operates on a liability basis, although liability may be limited where the wreck is as a result of war.

As part of the Convention, all vessels over 300MT tonnage which are either flagged by a state party or trading/navigating within the waters of a state party must maintain insurance for wreck recovery, and carry certification proving the insurance is in place.

In order to obtain a certificate of insurance from the flag state, the vessel’s owner must first secure a ‘Blue Card’ from their insurer verifying the insurance is in place and submit the ‘Blue Card’ to the flag state authority.

Claims for the cost of wreck removals are brought directly against the insurer, and the liability of the insurer is strict. However, there is some potential for insurers to find themselves liable for wreck removal costs. This may happen if a ship-owner cancels their Blue Card with the stipulated three months’ notice, and a wreck occurs during that three month period. Insurers should therefore consider obtaining an indemnity from the assured to cover this eventuality.

How can we help?

At ParrisWhittaker we know that vessel owners are keen to ensure that their business thrives in a competitive marketplace –and that ensuring full compliance with regulatory obligations is essential to seeing a business grow. If you are considering how best to meet the new obligations of the Convention on wreck recovery, or any other regulatory matter, you need swift, incisive legal advice to help you navigate potentially tricky waters.

The award-winning team of maritime and shipping lawyers at ParrisWhittaker are ready to provide the swift, incisive legal advice you need – and to help ensure your business meets its full potential.