Costa Concordia is a
Concordia-class cruise ship owned and operated by Costa Cruises. She was built
at Fincantieri's Sestri Ponente yards in Italy. The name Concordia was intended
to express the wish for continuing harmony, unity and peace between European
nations. Costa Concordia entered service
in July 2006 and was the largest ship to be built in Italy, at 114,500
tons. Costa Concordia was indeed a huge
ship described in its website as a 'real floating temple of fun that will amaze
you’.
On 13th Jan
2012, in calm seas and overcast weather, under command of Captain Francesco
Schettino, Costa Concordia struck a rock in the Tyrrhenian Sea on the western
coast of Italy about 100 km (62 mi) northwest of Rome. This tore a 50 m (160 ft) gash on the port
side of her hull, which soon flooded parts of the engine room resulting in
power loss to her propulsion and electrical systems. The vessel was abandoned and people
evacuated. 32 people reportedly died in
the accident. The sinking of the cruise
ship was cause of International concern and Insurance industry feared that this
could well be one of the biggest losses underwritten in Marine portfolio as the
estimates ranged from $600m-$800m.
Besides the Hull loss and
passenger claims, there would be liability claims as well. There were some reports that the vessel had a
high deductible.
We generally deal with
Marine Cargo – insurance ship is known as Marine Hull – the insuring terms
would usually be ITC Hulls 1.10.83 or the later version of 1.11.95. The Policy would cover – Actual Total loss /
CTL of the vessel; vessel’s proportion
of General average or Salvage; Sue and labour charges; collision damage to other vessels or their
cargoes together with any legal costs.
Hull policies do cover liability too but are generally restricted to 3/4th
of liability while the balance 1/4th could be recovered from a
P&I club depending upon terms of coverage. If the collision is with a ship
which is also owned by the same assured, this will not affect a claim by virtue
of ‘sistership’ clause.
Costa Concordia no longer
rests in the same place of accident but has been salvaged and taken for
scrapping ……. Here is interesting news from Daily mail that Tuscany and Giglio
seek £177m in damages over claims that Costa Concordia disaster tarnished their
image and scared off tourists.
Isola del Giglio is an Italian island and comune situated in
the Tyrrhenian Sea, off the coast of Tuscany, and is part of the Province of
Grosseto. Giglio means "lily" in Italian. The island is separated by
a 16-kilometre (10 mi) stretch of sea from the nearest point of the mainland. Giglio
Porto is located on the eastern coastal
side and hosts the port. Reports now
state that Officials for Italy’s Tuscany region and the island of Giglio are
seeking €220m (£175m) in damages from
Costa Cruises, a unit of Carnival Corp, for the 2012 Concordia cruise liner
disaster. The ship remained partially submerged near the port of the holiday
island for more than two years before being raised and towed away this year in
one of the largest and most complex maritime salvages ever completed.
“We will ask Costa for
€30min damages to Tuscany’s image,” the region’s president, Enrico Rossi, told
a court in the Tuscan city of Grosseto, according to a statement. Rossi said the region had registered a
decline in tourism, and that Giglio had lost 45,000 visitors due to the
disaster. A consultant to Giglio’s local government, Carlo Scarpa, asked the
same court for €190m in damages, most of it for tarnishing the island’s image. The
two officials spoke during an ongoing trial against Concordia’s captain, Francesco
Schettino, who is being tried for multiple charges, including manslaughter,
causing a shipwreck and abandoning ship. “To reconstruct the image of Tuscany
as a top tourist destination will require years of work, substantial
investments and costly national and international advertising campaigns,” Rossi
said.
Though the lovely Italian
island of Giglio they have been dealing with shipwrecks for quite some time, Costa
Concordia was dramatically different as there have been fears of this monster
could ruin one of Italy’s lesser-known paradises. Giglio a small island with a 27km coastline,
is inhabited by about 2,000 residents. Before the Concordia it was visited by
about 24,000 tourists a year, many of them attracted by the island’s natural
delights, be they fauna or fowl, scuba diving or hilltop striding. In short,
today’s Giglio is an environmentalist’s paradise where almost the only economic
activity is tourism. When Costa Concordia ran aground, with its 500,000 gallons
of fuel, not to mention five restaurants’ worth of food and 1,300 gallons of
olive oil, as well as paints, cleaning fuels and other substances, an
environmental disaster of monumental proportions was on the cards – not only
for Giglio and the Tuscan archipelago but also for the nearby French island of
Corsica. So far that disaster has been avoided by the good action of
salvors…….. yet after the towage, there are Qs on whether there could some lasting environmental or economic damage has
been inflicted on the island? - by
another yardstick, when the media first stomped out here, in January 2012, there were only few rundown bars and
restaurants; now the port has elegant
and chic bars.
…. The liability claims of
a different order are threatening big. Italian
officials are seeking a staggering £177m (€220m) in damages. Tuscany's
government wants £25m (€30m) in compensation from Costa Cruises, a unit of
Carnival Corp., arguing that its image has been tarnished and tourism has
declined significantly. A separate claim
by the island of Giglio, where the 950-ft-long cruiser ran aground in January
2012, has been put in for £152m (€190m). The mission to upright and salvage the ship had
already cost hundreds of millions of
pounds
The 3/4th
Collision liability clause would read : The Underwriters agree to indemnify the
Assured for three-fourths of any sum or sums paid by the Assured to any
other person or persons by reason of the
Assured becoming legally liable by way of damages for
8.1.1 loss of or damage to
any other vessel or property on any other vessel
8.1.2 delay to or loss of
use of any such other vessel or property thereon
8.1.3 general average of,
salvage of, or salvage under contract of, any such other vessel or property
thereon, where such payment by the Assured is in consequence of the Vessel
hereby insured coming into collision with any other vessel,
The indemnity provided by
this Clause 8 shall be in addition to the indemnity provided by the other terms
and conditions of this insurance. The
exclusions to this are :
8.4.1 removal or disposal of
obstructions, wrecks, cargoes or any other thing whatsoever
8.4.2 any real or personal
property or thing whatsoever except other vessels or property on other vessels
8.4.3 the cargo or other
property on, or the engagements of, the insured Vessel
8.4.4 loss of life, personal
injury or illness
8.4.5 pollution or
contamination, or threat thereof, of any real or personal property or thing
whatsoever (except other vessels with
which the insured Vessel is in collision or property on such other vessels) or
damage to the environment, or threat
thereof, save that this exclusion shall not extend to any sum which the
Assured shall pay for or in respect of salvage
remuneration in which the skill and efforts of the salvors.
The Protection and
Indemnity clubs would generally cover : Loss of life, injury and illness of
crew, passengers and other persons; Cargo
loss, shortage or damage; Collision; Damage to docks, buoys and other fixed and
floating objects - Wreck removal; Pollution; Fines
and penalties….. vessel diversion expenses and more including unrecoverable GA
contributions.
Though there could be
still specifically designed covers, the type of liability damages that Costa
Concordia is facing now, appears not to be covered under any situation.
With regards – S.
Sampathkumar
21st Nov. 2014.
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