Global marine insurer Marsh has launched a US$50 million port blockage insurance facility, inspired by the ensuing chaos and amid heightened supply chain risks.
Claimed by Marsh to be the first of its kind, the new port blockage insurance package is being made available to shipping ports and terminals around the world. The facility is backed by a panel of Lloyd’s of London and London market A+ rated insurers. The insured capacity of $50 million is standard, with higher limits being available on a case-by-case basis.
Coverage aligned to specific risk
Created by Marsh following the collapse of the Francis Scott Key Bridge and subsequent disruption at the Port of Baltimore, the insurance facility can be purchased independently or used to supplement existing cover.
Available to Marsh clients globally, it is specifically designed to provide clients with cover for loss of revenue caused by third-party accidents such as a vessel sinking in a channel, a vessel impact resulting in a waterway closure, or a natural catastrophe.
Although not a daily occurrence, blockages are far from unheard of. Incidents, like the MV Dali container ship, which demolished the bridge and blocked access to Baltimore, are at the high profile end and attracted worldwide attention. However, smaller incidents are no less catastrophic to those immediately impacted.
“Port blockage is a growing concern for businesses operating in the maritime industry and can result in significant disruptions to global supply chains and loss of revenue,” said a statement from Marsh. “The facility’s wording can be customised to meet the specific needs of individual clients, meaning that coverage can be aligned to specific risk exposures and operational requirements.”
Debilitating consequences for businesses
If not a shipping incident, then forces of nature can soon escalate into disasters, which render ports out of action.
“Port blockages around the world are increasing with frequency and severity, and are resulting in debilitating consequences for businesses involved in international trade,” said Louise Nevill, CEO, UK Marine, Marsh Specialty. “As global trade continues to expand, this new facility offers clients a rapidly available layer of insurance cover to protect operations and recovery in the event of port and terminal disruptions.”
Nevill runs the Marine, Cargo & Logistics operation for Marsh Specialty in the UK. The overall department has 720 specialist colleagues in 26 locations around the world.
Marsh is respected around the world as a leading insurance broker and risk advisor. The business is part of the New York-listed company, Marsh McLennan. It remains a moot point as to whether the example chosen by Marsh is a valid one.
The allision on 26 March of this year crippled the port of Baltimore and, at the time, the Maryland Port Administration estimated daily losses to be almost four times that fifty million dollar limit. Total insurance losses, said analysts at Barclays, could cost up to three billion dollars.