April 30, 2015 | Industry Insights

Pollution Hazards for Non-Hazmat Shippers

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Shippers, whether carrying hazardous cargo or not, could become liable for pollution or other environmental incidents. Having the right insurance in place is crucial.

Just this week, the cargo ship M/B Marathassa was released under escort after having been found spilling thousands of liters of bunker fuel into English Bay in Canada. The Cyprus-flagged ship was on its maiden voyage when a mechanical failure caused the fuel discharge in early April. A collision in the fog in Houston in March caused another large chemical spill with potential for air and water contamination.

A collision or any other incident that causes spillage of chemicals from a ship can require much more than just the costs of transferring cargo to a new ship. The leakage of fuel or other contaminants into waterways can affect multiple industries and, depending on the circumstances, can generate lawsuits from numerous affected parties. Flammable chemicals may require special, and costly, response crews, while other chemicals can be impossible to contain before they affect fisheries, tourism or other coastal or sea-based sectors.

Incidents that happen in port can carry even more potential liability since port employees and equipment are also exposed to injury or damage. Water and air testing is standard since some chemicals can be dangerous if inhaled. If an incident affects waterfowl or bird sanctuaries, liability compensation could expand.

Investigation of pollution events can take months or even years to complete, during which time costs pile up and defense attorneys’ fees mount. Without adequate environmental liability insurance, those expenses could fall outside of coverage.

Pollution liability insurance for the shipping industry is complicated and highly dependent on each trip and load. Some cargoes obviously have environmental implications, but you might be surprised at how many items represent a pollution hazard. Your cargo insurance or marine insurance broker can help you assess your liability exposure and acquaint you with hazards you might be unaware of.

Some insurers require that you yield settlement authority to them or waive certain potential coverage payments, so review not only what losses are covered but also how settlements on claims are handled. You also need to consider what kind of payments are available for regulatory actions and government investigations. Some insurers exclude such coverage to various degrees.

At Roanoke Trade, we go beyond plain-vanilla products. We dig into your full set of exposures and help you build a comprehensive protection plan for your ongoing shipping needs. Pollution liability coverage is very complex. Don’t leave it to a generalist.

We invite you to learn more about us, our experienced talent in this highly specialized area, our creative solutions, and the value we will bring to you and your clients. Please contact us at 1-800-ROANOKE (800-762-6663).


Sources: Insurance Journal, Yahoo News Canada


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