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

Finance

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

US Plans to Shut Royalty Loophole on Coal Exports

U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia according to reforms proposed by the Interior Department on Friday.

Hapag-Lloyd Completes CSAV Merger Capital Increase

Hapag-Lloyd completed the planned capital increase of EUR 370 million (approximately $452.5 million) as part of the business combination with the Chilean shipping

News

Port Workers in Argentine Grain Hub End Strike

Port workers in part of the Argentine grains hub of Rosario lifted a work stoppage on Friday, only a day after they went on strike over demands for higher year-end bonuses, a union official said.

Madsen to Chair Norway’s Research Council Executive Board

Henrik O. Madsen appointed chairman of the executive board of the Research Council of Norway   DNV GL president and CEO Henrik O. Madsen was appointed as chairman

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

Insurance

DSG Marine Asks Shipowners to Consider Fixed Premium P&I Cover

P&I Insurance Seminar for Owners and Charterers held in Mumbai DGS Marine, a global P&I management provider and exclusive manager for the British European and Overseas (BE&O) P&I Facility,

US Obamacare Impacts the Global Marine Industry

The Affordable Care Act (ACA), otherwise known as Obamacare, the recent healthcare plan in the United States, is affecting the international superyacht industry,

Even 'Small' Vessels are Getting Bigger

The Shipowners’ Club is a mutual provider of P&I insurance that has throughout its 160 year history been dedicated to serving owners of small and specialist ships.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Navigation Pod Propulsion Port Authority Salvage Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | 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: 0.3270 sec (3 req/sec)