ITIC: Professional Indemnity Cover Needed

press release
Monday, March 12, 2012

ITIC says professional indemnity cover essential in litigious shipping industry.

 

International Transport Intermediaries Club (ITIC) has warned that, in today’s increasingly litigious business environment, there is a growing need for shipping professionals to have third-party indemnity insurance cover. This can be the case even in those sectors where insurance has not previously been deemed necessary, and in cases where, despite a favourable outcome to legal proceedings, substantial costs may be unrecoverable.

 

Writing in its newsletter, The Wire, the latest issue of which is dedicated to the hydrographic sector, ITIC cites by way of example a US court ruling which held that the then-US Hydrographic Office (USHO) was not negligent in causing a passenger ship to ground between Nantucket and Martha’s Vineyard after the ship’s owner claimed that a reef had been charted negligently.

 

Firstly, the court held that the error on the chart was not a result of any negligence by the USHO because the organisation conducted the survey in 1939 using state-of-the-art techniques. It also found that there was no pressing need for the USHO’s successor, the National Oceanic and Atmospheric Association (NOAA), to perform a new survey. Finally, the court ruled that the ship did not actually rely on the defective chart when fixing its course. Therefore, even if the chart had been defective, it did not cause the loss. The US Court of Appeal confirmed the second point, but the first was not mentioned in the judgment.

 

ITIC points out, “Although there was no liability on the USHO, the defence costs amounted to a small fortune and, in the US court system, the winning party does not receive a cost award. In this instance, the party was a large national hydrographic office, but the same could apply to anyone providing data or professional advice. The cost of being proven innocent can be high.”

 

ITIC also cites a case in which a hydrographic surveyor had been contracted to produce a chart for a telecommunications company to allow the positioning of underwater fibre-optic cables. A significant time after the charts had been created, a ship towing an anchor made contact with one of the cables and with an underwater electricity cable, which caused damage estimated at $175,000. A claim was made against all parties to the project, including the hydrographic surveyor. However, the surveyor was successfully defended on the basis that the charts were created specifically for its client a year prior to the incident. However, the cost of the defence came to $32,000.

 

ITIC says, “The cost of legal assistance is always high and time-consuming. The ability of the correct insurer to manage the litigation is vitally important to ensuring that costs are kept to a minimum and to allow people to continue with their business and not have their efforts diverted into the often complicated ensuing legal issues.

 

“Many companies see insurance as an unproductive cost. This is especially true of small companies, where it is one of the top three expenses. We often hear that ‘insurance takes the profit out of a project’. This is the wrong way to view insurance. A good insurer can add enormous value.”
 

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

People & Company News

BHP Bullish on Caval Ridge's Prospects

Yesterday BHP Billiton Coal President, Dean Dalla Valle, was joined by the Hon. Tony Abbott MP, Prime Minister of Australia, and joint venture partner Mitsubishi in a ceremony to open the US$3.

Vice Presidents Rejig at Caterpillar Inc

Following the previous announcement regarding two group presidents’ retirements and new responsibilities for another group president, Caterpillar Inc. (NYSE: CAT)

Keppel Logistics Expands in Australia

Keppel Logistics Pte Ltd, a wholly owned subsidiary of Keppel Telecommunications & Transportation Ltd (Keppel T&T), has expanded its logistics capabilities down

Legal

ITIC Measures against Ebola

The International Transport Intermediaries Club (ITIC) has issued the following general advice related to the outbreak of Ebola. Vessels that have recently

ClassNK's Guidelines for Exhaust Gas Cleaning Systems

Leading classification society ClassNK announced that it has released Guidelines for Exhaust Gas Cleaning Systems. These guidelines cover class safety requirements

China, Vietnam Pledge Maritime Cooperation

China and Vietnam have agreed to "address and control" maritime disputes, state media said on Friday, as differences over the potentially energy-rich South China

 
 
Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Salvage Ship Repair Shipbuilding / Vessel Construction Winch
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: 0.1330 sec (8 req/sec)