The collapse of Baltimore's Francis Scott Key Bridge is will almost certainly lead to billions in liability claims. Less certain is who pays for what, and how much.
With various owners and companies involved – and with some maritime laws predating even the Titanic sinking – untangling that web of will be costly and complex, my colleagues Catherine Thorbecke and Nathaniel Meyersohn write.
"This claim has the potential to be north of a billion dollars," said John Miklus, the president of the American Institute of Marine Underwriters.
"Litigation will run years."
Analysts at Barclays, meanwhile, estimate total cost of insurance claims from the disaster could be as high as $3 billion.
Insurers footing the bill
The Dali ship is owned by Grace Ocean Private, a Singapore-based company, and insured by the Britannia Protection and Indemnity Club.
Britannia is one of the dozen marine insurance member clubs under the International Group of P&I Clubs, a consortium that provides liability coverage for 90% of ocean freight and pools claims among members.
These insurance companies are backed by insurance companies of their own — a business known as a reinsurer.
Miklus said these P&I insurance clubs collectively pool losses, but they also buy "an extensive reinsurance program."
"So, when we start talking about losses of a billion or more, this is being spread through the whole global reinsurance market," Miklus added.
How much will the rebuilding cost?
It's still too early to know the final bill for damages and rebuilding.
The bridge alone could be worth more than $1.2 billion, said Loretta Worters, a spokesperson for the Insurance Information Institute. Then there will almost certainly be large liability suits, medical costs for survivors, clean-up costs, and more, she added. Damage and losses to cars and clean-up from the debris and reconstruction will also factor into the total.
Claims for damage to the bridge alone could be some $1.2 billion, according to Barclays analysts, with wrongful death liabilities totaling as much as $700 million.
Just to complicate things a bit more...
While Dali is owned by Grace Ocean Private, it was chartered by Danish shipping giant Maersk when it plowed into the bridge early Tuesday morning.
When it comes to maritime law, "all the liability ends up with the ship owner, which will be the Singaporean company," said Martin Davies, the director of the Maritime Law Center at Tulane University. "Maersk, the Danish company that has all the cargo on board the vessel, is not liable," Davies added.
But the ship owner has the potential to significantly cap how much it is liable for in this case, thanks to a statute that dates back to 1851.
The statute – which was used by the owners of the RMS Titanic, among other instances – could limit the ship owner's liability to how much the Dali was worth after it crashed.
See Catherine and Nathaniel's full story for more.
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