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The Vessel Pollution Insurance Application: Why Does My Underwriter Ask Me That?
By: Lars Perkins
36 Mill Plain Road, Suite 410Danbury, CT 06811Phone: (203) 730-8833Fax: (203) 730-8863
Significance Of Hull and P&IOPA Removal Obligations Are Defined Broadly
Enough To Require Raising A Vessel
Hull Underwriters collect premiums to provide sue & labor and salvage coverage
P&I Underwriters collect premiums to provide coverage for removal of wreck obligations
Pollution Underwriters do not wish to duplicate coverage for raising a vessel but cannot raise policy defenses as a COFR guarantor
Five Year Loss History
Five Year Loss History
Past Results Are Not A Guarantee Of Future Performance
Minimize Impact On Pricing By Explaining What Has Been Done To Prevent Similar Spills In The Future
Vessel Type
Vessel Type
Self-Propelled VesselsFuel & Oil Aboard To OperateCan Spill ThemselvesCan Cause Third Party Spills
Non-Self-Propelled VesselsRisks Defined More By Pollutants AboardSubrogation Rights May Exist Against Tug
Gross Tonnage
Gross Tonnage
GT Is A Volumetric Measurement
Defines Liability Under Both OPA and CERLCA
Regulatory Tonnage Lower Than ITC Tonnage
33 CFR Part 138.30 – Using Regulatory versus ITC
Application For Simplified Measurementhttp://www.uscg.mil/hq/cg5/msc/interactive_tonnage.asp
https://npfc.uscg.mil/cofr/default.aspx
COFRs
Certificate Of Financial Responsibility
33 USC § 2716 – The responsible party for
1) any vessel over 300 GRT (except a non-self-propelled vessel that does not carry oil as cargo or fuel)
2) any vessel using the waters of the EEZ to transship or lighter oil
shall establish and maintain evidence of financial responsibility
Financial Responsibility Amounts - OPA
The Oil Pollution Act of 1990 limits of liability for vessels are
Single-Hull Tank Vessels Over 3,000 GT
Greater Of $23,496,000 or $3,200 Per Gross Ton
Less Than Or Equal To 3,000 GTGreater Of $6,408,000 or $3,200 Per Gross Ton
Double-Hull Tank Vessels Over 3,000 GRT
Greater Of $17,088,000 or $2,000 Per Gross Ton
Less Than Or Equal To 3,000 GT Greater Of $4,272,000 or $2,000 Per Gross Ton
Any Vessel Other Than A Tank VesselGreater Of $854,400 or $1,000 Per Gross Ton
Source: 33 CFR § 138.230 – Effective July 31, 2009
Financial Responsibility Amounts - CERCLA
CERCLA – Hazardous Substance Liability
Comprehensive Environmental Response Compensation And Liability Act
CERCLA liability limits for vessels are the greater of$500,000 or $300 per gross ton for vessels not moving hazardous substances as cargo
$5,000,000 or $300 per gross ton for vessels moving hazardous substance as cargo
List Of CERCLA Substances – 40 CFR § 302.4
Trading Area/Navigation Limits
Policy Specifically Addresses U.S. Liabilities
Foreign Waters Endorsement Is Available
Lower Liability Outside US May Be Offset By Higher Response Costs
Liquid Cargos
Liquid Cargos
Self-Propelled versus Non-Self-Propelled
Cargo1) Oil (Persistent/Non-Persistent)2) Hazardous Substances – MSDS3) Non-OPA/Non-CERCLA Substances
Construction – Single versus Double Hull
GT
Self-Propelled Vessels
Self-Propelled Vessels
TugsGross TonnageTowing Oil/Chemical Barges
Fishing VesselsGross TonnageDescription Of Type Of Fishing Vessel
Offshore Supply VesselsGross TonnageCERCLA Substances As Cargo?
Other Vessels – Crewboats, Passenger Vessels, Pleasure Yachts
Gross Tonnage
Non-Self-Propelled Vessels
Non-Self-Propelled Vessels
BargesType/DescriptionGross TonnageHazardous Substances As Cargo?Amount Of Fuel/Oil Aboard
a) <5 Gallons – COFR not requiredb) <10,000 Gallonsc) >10,000 Gallons
Other Issues
Other Issues
Special EquipmentSpudsLegsLiftsJack-ups
Description Of OperationsDredgingSalvageDrillingTankerman Duties Aboard Unscheduled
Vessels
Conclusion
Conclusion
Pollution Liabilities Are Here To Stay & Will Continue To Become More Onerous
Cargo Owner Shipping Oil In Single Hull Vessel Is Responsible Party After 12/31/10
Fully Describe Risk Profile To Underwriter To Adequately Insure
Review Adequacy Of Limits Annually
Next Change To Vessel Limits Due In 2012
www.opainsurance.com
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