P&I Club Correspondents Under Pressure

Press Release
Tuesday, February 05, 2013

ITIC says P&I correspondents are coming under increasing pressure from clubs and from third parties to ensure that they have taken out professional indemnity insurance.
 


In the latest issue of its newsletter, The Wire, ITIC says it is aware that at least one International Group P&I club is considering asking all its correspondents to obtain professional indemnity cover, and anticipates that a number of other clubs will follow suit.



ITIC has recently commented on a proposed P&I club contract for its correspondents, and has highlighted areas where it believes the correspondent should not be held liable. It has also commented on what it considers to be a reasonable limit of liability for a P&I correspondent.



To illustrate the importance of adequate insurance cover, ITIC cites the case of a correspondent asked to survey a cargo of 2,000 metric tonnes of bulk fertilizer which had been contaminated by residues from a previous cargo. The correspondent, having carried out the survey - and following several telephone conversations with the P&I club - obtained verbal agreement to offer the cargo interests a depreciation allowance of $22 per tonne, which was accepted.



When the cargo interests submitted their claim for $44,000 to the P&I club, the club refused to pay, maintaining that the correspondent had acted without authority in offering settlement. The consignees therefore sued the P&I club and the shipowner. The correspondent was also involved, on the grounds that, if the court found that it had no authority, then it would be liable under the doctrine of breach of warranty of authority.



The case went to court in London. As the correspondent had no confirmation in writing, the dispute turned on which witness was believed. On this occasion the court found that the correspondent had been authorised to make the offer. However, if the correspondent had not made a convincing witness, and had not kept contemporaneous notes, it would have had to pay the claim, plus interest, plus the costs of some of the other parties involved, and would have faced a liability of more than $100,000.



ITIC insures more than seventy P&I club correspondents globally, on whose behalf it has handled claims arising out of missed time-bars and acting without the principal’s authority in conducting settlement discussions. It emphasises that, irrespective of whether correspondents are required by the clubs for whom they act to take out insurance, they clearly face an exposure to claims from both their principals and from third parties in respect of the work they undertake in investigating and responding to incidents.

 

Maritime Reporter March 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Court: Japan's Mitsui Paid to Release Ship

China Supreme Court says Mitsui pays about $29 mln; Ship released about 0030 GMT Thursday. Ship was seized over dispute dating back to 1930s. Advisor to plaintiffs says will likely demand more money.

Fredriksen Joins Rival for New Capesize Firm

Shipping tycoon John Fredriksen is joining one of its shipping firms with rival Knighsbridge Tankers Ltd to create the largest U.S. listed Capesize firm, which

Diamond Offshore profit falls as rig demand softens

Diamond Offshore Drilling Inc, one of the world's top five offshore rig contractors, reported a 17 percent drop in quarterly profit as demand fell for rigs used in deep water drilling.

News

Mitsui O.S.K. Ship Ready To Leave Chinese Port

Japanese shipping firm Mitsui O.S.K. Lines Ltd said on Thursday that its ship, the "Baosteel Emotion" 226,434 deadweight-tonne ore carrier, is ready to leave

Body Of Korean Boy Who Raised Alarm On Sinking Ferry Found

The body of a South Korean boy whose shaking voice first raised the alarm that a passenger ferry with hundreds on board was in trouble has been found, his parents believe,

UASC Introduces New Asia - Europe Network

UASC has introduced its new Asia – Europe Network with three new services (AEC1, AEC3, AEC4), and two enhanced services (AEC8, AEC9). These services will broaden

Insurance

Court: Japan's Mitsui Paid to Release Ship

China Supreme Court says Mitsui pays about $29 mln; Ship released about 0030 GMT Thursday. Ship was seized over dispute dating back to 1930s. Advisor to plaintiffs says will likely demand more money.

Lawyer: Korea Ferry Owners Accept Responsibilities

The family that has a major stake in companies that control the shipping operator whose ferry sank last week, likely to have killed hundreds, will take social and

Korean Ferry: Pair Drowned with PFD's Tied Together

A boy and girl trapped in a sinking South Korean ferry with hundreds of other high school students tied their life jacket cords together, a diver who recovered their bodies said,

 
 
Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Pipelines Salvage Ship Electronics Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1737 sec (6 req/sec)