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The stranded owner of the Suez ship and insurance companies face millions of claims

A cargo ship sits with its bow stuck to a wall after being stranded across the Egyptian Suez Canal on Wednesday. (AP photo)

Industrial sources said, on Wednesday, that the owner and insurance companies of one of the world’s largest container ships stranded in the Suez Canal face millions of dollars in claims even if the ship is quickly resurrected.

The Suez Canal Authority said in a statement that the ship Evergiven, which weighs 400 meters and weighs 224 thousand tons, ran aground on Tuesday morning after losing the ability to drive amid strong winds and a dust storm, threatening to disrupt global shipments for days.

The GAC, a Dubai-based marine services company, said that authorities were still working on freeing the vessel on Wednesday afternoon, and that information it had received earlier claiming that the vessel was partially reflowed was inaccurate.

Insurers and brokers said the ship’s owner, Japan’s Choi Kisen KKK, and its insurers could face claims from the Securities and Commodities Authority over lost revenue and other ships disrupting their passage.

“All roads lead to the ship,” said David Smith, the marine chief at McGill and Partners, an insurance broker.

Choi Kesen could not be reached for comment.

Insurance sources say that container ships of this size are most likely insured against hull and machinery damage ranging from $ 100 to $ 140 million. Two sources said the ship is insured on the Japanese market.

The cost of the rescue is borne by the body and machinery insurance company.

“It is likely to be the largest container ship disaster in the world without the ship exploding,” said one shipping lawyer, who declined to be named.

Martin Schottiver, a spokesman for Dutch marine services company Boskales, told Reuters that its subsidiary, named Salvidge, had been hired to help with the operation. A team of about 10 people is heading to Egypt.

Supply chain issues

In addition, owners of cargo on board and other vessels stranded in the canal are likely to claim liability for the ship from an insurance company for losses incurred by perishable goods or failure to comply with delivery dates, sources said.

“If you have a constant backlog of ships, there are big problems in the supply chain,” said Marcus Becker, global head of shipping and shipping at insurance broker Marsh.

UK P&I Club said in a statement emailed to Reuters that it is the protection and compensation insurance company for Ever Given, but declined to comment further. This portion of insurance covers ships against pollution and injury claims.

Smith said at McGill that the bulk of these insurance claims will likely be reinsured through a program run by the wider international group of protection and compensation clubs.

Local sources said that at least 30 ships were blocked in North Evergreen and three in the south. Dozens of ships were also seen gathered around the northern and southern entrances to the canal.

Kepler Analytics said more than 20 oil tankers carrying crude and refined products were affected by the disruptions.

There may also be claims for damages to the canal, said Rahul Khanna, global head of marine risk advisory at Allianz Global Corporate & Specialty (AGCS).

Photos shared by the Securities and Commodities Authority showed an excavator removing soil and rock from the canal bank around the ship’s bow.

Grounding operations are the most common cause of charging accidents in the channel, with 25 in the past 10 years, according to AGCS.

However, it seems unlikely that insurers will face channel leakage claims. Bernhard Schulte Shipmanagement, the ship’s technical management company, said there had been no reports of contamination.

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