Finance

Baltimore Bridge Collapse: Who Will Pay for Destroyed Bridges, Damaged Businesses, and Lost Lives?


Crash Francis Scott Key Bridge A multi-layered tragedy in Maryland: a disaster for the family and friends of the victim or presumed dead deep personal lossIt’s an economic nightmare for businesses that rely on the Port of Baltimore.

For federal court, it will soon come down to a balance of money and facts, with a network of insurance companies expected to pay at least part of the bill.

disaster A cargo ship lost power early Tuesday, Hitting Baltimore’s Francis Scott Key BridgeEight people were present when the highway bridge collapsed, two of them were rescued, the bodies of the other two were found, and four are still missing and presumed dead.

The accident, which shut down the Port of Baltimore, a major shipping port, could cost the region’s economy hundreds of millions of dollars in lost labor revenue next month alone, according to economic analysis firm Implan.

A report from credit ratings agency Morningstar DBRS predicts the collapse could become the most expensive marine insurance loss in history, surpassing the previous record of about $1.5 billion set in 2012 Costa Concordia shipwreck Cruises around Italy. Morningstar DBRS estimates total insured losses from the Baltimore disaster could reach $2 billion to $4 billion.

Here are the fees, legal claims and the insurance companies that will pay:

What legal claims are there?

In federal court, lives lost and property damaged will be reduced to questions of money and fact: an individual or a business own and operate the vessel Was there some kind of oversight? Is anyone else partially responsible? How much will it cost to replace the bridge and comfort the families of the victims?

The insurance company will ultimately bear at least some, if not all, of the total cost.

Enrique Serna, a lawyer who specializes in representing migrant workers and others injured on the job, said his firm was contacted by some of the victims’ families shortly after the accident, but he They have not yet been represented. They come from El Salvador, Honduras, Guatemala and Mexico, some dating back decades.

Serna said litigation is inevitable and the ship’s insurance companies may soon seek “limitations of liability,” asking a judge to limit the damages they can be ordered to pay. Victims need to respond quickly to ensure that any caps are not compromised. t is set too low.

“What happens is it’s a race against time as to when you can file a claim,” Serna said.

What are the economic costs?

Attorney Thomas Schoenbaum, an expert in maritime law and a professor at the University of Washington, said that despite the significant economic losses, Affected businesses Owners and operators of vessels will not be able to be prosecuted.

“The bad news is generally bad on this front: in maritime law, pure economic loss is not recoverable. If you suffer a financial loss, lose money, or your business goes out of business, or your business loses customers, unless you suffer some physical damage as well as other losses “Economic losses cannot be recovered under maritime law,” he said.

The only exception is damage caused by pollutionLike an oil spill, the bridge debris is not considered pollution under maritime law, he said.

Charm City Warehouse owner Bernard Sommer, whose Baltimore-based business serves shipping lines that need to store cargo containers, expects to suffer heavy losses whenever ships are rerouted to other ports.

“If they open in 30 days, we’re going to lose 60 to 90 days of business. For them to do that in 30 days is pretty quick,” he said. “Until this pipeline is open and shipping, they will not provide any service to the Port of Baltimore.”

Sommer said he has not yet contacted his insurance company to ask whether his policy covers losses related to the closure of the Port of Baltimore.

“What if the building caught fire and we couldn’t operate, or something like that? Yes, that’s covered. But I don’t know if something like that is covered,” he said. “It’s hard to say. When you sign up for insurance, they give you a page of everything they cover. Then there’s 45 pages of everything they don’t cover.”

Atlantic Maritime Ship Supply had to send a truck to Newport News, Virginia, on Friday to service a ship that was originally bound for Baltimore. Ship owner Edward Dryer hasn’t yet double-checked his insurance – he’s waiting to see if his operations will be affected.

He expects ports to gradually reopen over weeks rather than months.

“Let’s be optimistic that they can get it fairly quickly The channel is at least partially open,” said the dryer.

Experts say replacing bridges can cost US$400 million Or more.

What about the insurance company on board?

Ships and other marine vessels often have more than one type of insurance. They usually have policies that cover damage to the hull or machinery and may also cover the cargo the ship is carrying.

But for other very expensive losses, such as major environmental damage or disasters such as bridge collapse, large shipowners turn to so-called “protect and indemnity” or P&I insurance.

P&I insurance can be provided by a “club” of insurance companies owned by multiple policyholders. Club members deposit money into a pool that can be used to pay catastrophe claims. The idea is to share the risks associated with a major disaster so no major disaster occurs. Companies can only bear it alone.

The insurance club can also purchase its own insurance to cover expenses that the capital pool cannot bear alone. This is called “reinsurance” – the club is the first to pay the insurance, and then the second payer is the “reinsurance”.

The Britannia P&I Club provides insurance for ships in accidents. The London-based club, which is also part of the larger International Group of P&I Clubs, may help cover costs should they exceed a pre-arranged amount. Reinsurers may also underwrite a portion of the tab.



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