Baltimore Bridge Collapse

More like a troubled bridge over water, amirite?

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Troubled bridge underwater.

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https://www.reuters.com/business/insurers-brace-multi-billion-dollar-losses-after-baltimore-ship-tragedy-2024-03-27/?

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Maybe I’ll move news of the Baltimore crash/ bridge collapse to it’s own thread later. In the meantime, ocean carriers are invoking force majeure

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Wondering if all those industries affected by the delay will do the right thing: raise prices on all goods right now.
As the gasoline companies do.

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I don’t understand the use of this in the context of insurance:

Force majeure events are usually defined as certain acts, events or circumstances beyond the control of the parties, for example, natural disasters or the outbreak of hostilities. A force majeure clause typically excuses one or both parties from performance of the contract in some way following the occurrence of such events. Its underlying principle is that on the occurrence of certain events which are outside a party’s control, that party is excused from, or entitled to suspend performance of all or part of its obligations. That party will not be liable for its failure to perform the obligations, in accordance with the clause.

Does that mean next time we have a hurricane we can declare force majeure, we couldn’t control the hurricane so sorry about your house?

It seems weird to have “we’ll cover your little losses, but if a big loss happens, oopsie daisy no coverage”

As I read it, it’s related to the additional expense that the receiver is going to incur to get their good from a different port than originally agreed.

I think from an insurance perspective, IIRC, normally the shipper is on the hook for damages to goods until it is picked up by the receiver. With force majeure, that coverage now ends once the cargo is unloaded at port.

Sounds like this is what insurance is for. I can understand between two parties, like in this instance the shipper and the receiver, and in this instance there will be a delay in shipping to and receiving in Baltimore for several weeks or months, different from what the contract states.

I don’t think that would be permitted when the insuring agreement is to provide coverage to your house.

However, if the insurance contract were providing coverage for my liability for losing or damaging your cargo as it travels in a container on my ship, a strong case should be made that I shouldn’t be liable if your cargo is destroyed due to a tornado trying to eat the container or my ship.

I guess it depends whether the insurance is covering “liability for me causing damage to your property” versus “liability for your property being damaged while under my care.”

And I don’t know how these contracts are written. If the intent is just to cover “mistakes by the shipper causing damage to property” rather than “damage to the property” in general then I see.

We need a maritime lawyer on this forum. Anybody know where Chareth went?

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You’re a crook, Captain Hook. Judge, won’t you throw the book, at the pirate?!

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I don’t think that force majeure affects if the coverage exists, I think it affects when the coverage exists.

Like say I’m shipping a Mercedes Benz from the Mercedes factory in Stuttgart, Germany to a local dealer in, say, Alexandria, VA. And you’re insuring the Mercedes all the way from Stuttgart (where it had been the manufacturer’s responsibility) to Alexandria where it becomes the dealer’s responsibility. At any point in between, Rastiln Insurance Company is responsible. And I’m paying you a premium of $X to cover the Mercedes, which you have accepted. And the car is to be transported by rail from Stuttgart to [European port] and then by container ship to the Port of Baltimore, then by truck to the dealer in Alexandria.

But now that the Port of Baltimore is closed, it’s going through Port Newark instead. Well Newark is a lot further from Alexandria than Baltimore is. A lot more chance of something happening en route from Newark to Alexandria than from Baltimore to Alexandria. You didn’t sign up for that added responsibility.

So you declare force majeure and once the Mercedes is offloaded in Newark your responsibility ends.

If there is a hurricane that throws the Mercedes into the ocean while the container ship is still at sea, that’s still your responsibility. If the Mercedes was damaged in Europe, that’s still your responsibility. But if it’s damaged at Port Newark or in transit from Newark to Alexandria then it’s not.

At least, that’s how I understand it.

Thats what reinsurance is for.

Standard liability contracts are not designed to cover every eventuality.

So the likely “losers” here are the reinsurers. They are going to take billion dollar hits over the next few years.

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LegalEagle’s review of the legal/liability issues:

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