Insurers And Stranded Suez Ship Owner Could Face Millions In Claims

One of the world's largest container ships is stuck in the Suez Canal, and the ship's owner and insurers face claims totaling millions of dollars even if the ship is refloated quickly, industry sources told Reuters.

The  Ever Given ran aground on Tuesday morning after losing the ability to steer amid high winds and a dust storm, the Suez Canal Authority said in a statement. The accident threatens to disrupt global shipments for days.

The ship’s owner, Japanese firm Shoei Kisen KK, and its insurers could face claims from the SCA for loss of revenue. And that's not all. The ship's owner and its insurers also could face claims from other ships whose passage has been disrupted, insurers and brokers said.

“All roads lead back to the vessel,” said David Smith, head of marine at insurance broker McGill and Partners, told Reuters.

Container ships of this size are likely insured for hull and machinery damage of $100-140 million, Reuters said. The ship was insured in the Japanese market. The cost of the salvage operation is also borne by the hull and machinery insurer. A salvage team is reported to be on its way to Egypt to deal with the accident.

In addition, owners of the cargo on board the ship and on other ships stuck in the canal will likely claim from the ship’s liability insurer for losses to perishable goods or missed delivery deadlines, Reuters said.

At least 30 ships were blocked to the north of the Ever Given, and three to the south, local sources said. Several dozen ships could also be seen grouped around the northern and southern entrances to the canal.