Letter: Insurance Review
Ports and terminal operators need to be vigilant of how they insure themselves in the event of vessel collisions as well as accidental damage to infrastructure.
The starting point is to undertake a collision and accident risk assessment. Use the data you have on incidents to assess the likelihood of accidents and where you are weak. You need to show the insurer that you understand the principle that the best crisis management is never heard about because you have prevented it ever happening.
When selecting your coverage, customize the insurance policy to address your risk profile. These policies should consider the port’s size, vessel movements, location and how congested your port is, the cargo types and how dangerous they are.
We advise that the insurance policy covers not only damage to port infrastructure but also collision damage to ships and any third-party liability. You do not want to be at the mercy of a third party to cover the cleanup and repair costs when they may or may not have adequate insurance.
A smart move is to embrace technology to mitigate risk. Examine improved navigation aids and surveillance systems and review safety protocols. Practice your emergency response, showing what you have done and what you have learned.
Often, responsibility for collisions and accidents is badly worded; make sure you are clear who carries legal responsibility in accident scenarios so you can keep your financial losses and premium to a minimum.
CEO, Armada Risk Partners