We are haemorrhaging money! Machinery is the biggest cost in terms of overall claims amount that insurers pay. Machinery incidents amount to over 40% of the overall claims paid by underwriters. To give some background, insurers cover the cost of replacing machinery which has broken as a result of negligence by the crew providing such loss or damage has not resulted from want of due diligence by the
insured, owners or managers. This is very wide coverage and effectively acts as warranty insurance for the machinery. Obviously it is open to abuse and insurers trust the owners to be open and honest when presenting a claim for machinery damage.
I have been in the insurance industry for over 30 years and have benefited from the Braemar’s, previously the Salvage Association, monthly reports. The top four causes of casualty are always machinery, grounding, fire and collision in that order. This is also backed up by the International Union of Marine Insurers (IUMI), where the data is kindly provided by Lloyd’s List Intelligence.
Continue reading “Machinery, what is the underwriter’s problem?”
