An Insurance Upgrade
Faced with the potential fallout from insufficient insurance coverage for vessels, the United Arab Emirates (UAE) is reinforcing its requirements for ships flying its flag. The move targets protection and indemnity (P&I) insurance, which covers liability claims encompassing environmental damage and injury. Although separate hull and machinery policies exist for physical damages, the UAE’s decision signals a growing concern over ships lacking the ideal coverage in case of oil spills.
Within the International Group (IG) – a conglomerate of 12 ship insurers – 90% of the world’s ocean-going tonnage is covered. The UAE’s Ministry of Energy and Infrastructure issued an advisory on June 2nd, outlining the new criteria non-IG insurers covering UAE-flagged vessels must comply with.
Necessary Measures
As stated in the advisory, P&I insurers outside of the IG are now required to submit evidence of membership in a recognized maritime-related professional agency or regulatory body. Additionally, they must provide details of either the five largest settled claims or information on claims exceeding $10 million. These submissions need to be completed before June 30th.
The advisory also highlights the need for evidence regarding blue cards, which cover pollution damage. UAE officials have not commented on the matter.
A Growing Concern
The UAE-flagged fleet consists of several oil tankers – many of which are aging – and over 200 offshore vessels typically used in oil-related trading, according to data from the public database Equasis. What’s more, hundreds of “ghost” tankers operating without adequate regulation have joined the murky shipping trade in recent years. These vessels transport oil from countries hampered by Western sanctions and restrictions, such as Russia and Iran.
The Worrying Statistics
A Reuters investigation reveals that incidents involving these ships, including groundings, collisions, and near misses, peaked last year. In response, ports in China’s Shandong province are demanding more detailed information on oil tankers over 15 years old that call at their terminals, as per sources familiar with the situation.
In conclusion, the UAE’s move to tighten insurance requirements reflects the increasing concerns over unregulated vessels and potentially catastrophic outcomes. The enforcement of stricter standards will no doubt contribute to improved maritime safety and environmental protection.
