Now that Evergreen’s vessel Ever Given is floating and no longer blocking passage in the Suez Canal, most of the news will move on to other things. That doesn’t mean the story is over yet, it is just the beginning of a new chapter.
In regard to the Ever Given’s recent predicament, there are plenty of potential insurance issues of complexity that will surface. Investigations will be done, insurer pool schemes (collective reserves) will be tested, and lawsuits will be filed, all due to the Ever Given grounding in the Suez Canal. The ship owner, Shoei Kisen Kaisha (a subsidiary of Imabari Shipbuilding), and the charterer, Evergreen Marine, will have their hands full.
Cargo owners may question if they experienced a loss due to the transit delay of their cargo on the Ever Given, or one of the vessels stuck behind it, if they can file a claim successfully with their marine cargo insurance policy? The short answer is ‘not likely’, at least not yet, and not for a loss caused by the delay. Keep reading.
Marine cargo insurance coverage typically (‘typically’ being code for ‘fat chance’) does not cover delays in transit, even if the result of a covered peril.
That does not mean cargo owners on all vessels impacted will forget about any losses due to delays, it means they will look to Evergreen Marine and the ship owner to take responsibility. While there is a good case for cargo owners who have real physical damage to their cargo on the Ever Given such as losses to perishables, I think there would be a harder path for the zillion entities that will pursue satisfaction for liquidated damages they may have experienced caused by the delay. There will be plenty of losses, and insurance puzzles, to go around starting with the loss of revenue for the canal authority and canal repairs if needed.
I think it is a ‘given’ general average will be declared in regard to the Ever Given. (Did you see what I did there?). With the huge amount of costs Evergreen, the ship owner, and their non-cargo insurers like their P&I, will have to contend with, I suspect all parties will shed as much in costs as they can.
(UPDATE APRIL 1ST…NO FOOLING) It was confirmed April 1st that General Average was declared. I did not change the overall paragraph because I did not was to lose mi ‘given’ play om words pun.
Through general average cargo owners on the Ever Given may end up with the burden of cost such as salvage expenses, refloating the vessel, ship damage if any, and any direct cargo losses on the Ever Given. That is where cargo owners will get to use their marine cargo insurance. General average is covered under most normal cargo insurance policies. I think whatever general average number cargo owners get strapped with, that will just be the tip of the overall ice burg when it comes down to the to the six day vacation the Ever Given took on the beautiful shores of the Suez Canal.