Swedish Club Warns Of Worrying Trend In Expensive Vessel Claims

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Accidents are generally caused by human error and often occur in conjunction with technical or equipment failure.  Injuries and cargo claims usually occur because the crew did not follow SMS procedures.  Alternatively, procedures were inadequate or simply did not address the situation in hand.

The Swedish Club studied and analyzed bulk carriers, container vessels and tankers, which represent 80% of the insured vessels, for few claim categories in detail such as cargo, illness, injury etc., and prioritises identifying the patterns and trends derived from loss statistics.

The report observes that costs have risen over the last ten years, with this rise mainly affecting the frequency of claims above USD 5,000 after the deductible.  For claims below USD 5,000 there is actually a drop in frequency.  The reason it believes that more intense trade with less time on board to prepare for critical operations has resulted in a higher number of crew-related incidents.

The report expresses concern about some extremely expensive claims and also about a worrying trend that the number of expensive claims is increasing, which in turn increases the overall costs significantly.

The report finds that when accidents occur it is often the case that crew members have ignored procedures or did not identify the risks.  This may be that the crew member did not see the benefit in following the procedures.  This clearly demonstrates that the company has failed to establish a safety culture on board that emphasises the importance and benefits of approved procedures.

The report concludes with a note that safety improvements are not about spending great amounts of money, but prove cost efficient when compared with a catastrophe, not to mention the avoidance of human tragedy.

Source: The Swedish Club