Maritime Risks on the Rise Despite Record Low in Lost Ships

In 2023, the number of completely lost large shipping vessels reached a record low of just 26, as reported by Allianz Commercial. This marks a significant decline, with a 33% reduction in lost ships year-on-year and a 70% decrease over the past decade. Allianz classifies a large vessel as a ship exceeding 100 gross tons.

Decrease in Overall Shipping Incidents

Overall shipping casualties or incidents decreased by approximately 3% in 2023, with machinery damage or failure constituting more than half of all global events.

Breakdown of Ship Losses by Type

Cargo ships represented the majority of total losses, comprising 60% of the ships lost in 2023. Fishing vessels followed, with four total losses, and tug boats accounted for three losses. Sinkings were the leading cause of ship losses, making up half of the total, followed by wrecked/stranded vessels and fires/explosions.

Challenges in the Global Shipping Industry

Despite the decrease in lost ships, the global shipping industry faced significant challenges in 2023. Rising piracy, droughts affecting the Panama Canal, and ongoing conflicts in Ukraine and Gaza endangered shipping vessels and their crews.

Captain Rahul Khanna, global head of marine risk consulting for Allianz Commercial, highlighted the impact of climate change on shipping, emphasizing the disruption caused by the Panama Canal drought and the urgent need for the industry to decarbonize. These conditions necessitate the development of alternative shipping routes, which can lead to longer transit times and increased shipping costs.

Impact on Supply Chains

Businesses importing from China and Southeast Asia are experiencing delays as cargo vessels reroute around the Cape of Good Hope to avoid conflict in the Red Sea. As of April 2024, shipping volume around the Cape of Good Hope has surged by 193%.

Khanna noted in Allianz’s Safety and Shipping Review 2024 that recent disruptions, including extreme weather, climate incidents, container ship fires, groundings, the pandemic, and geopolitical conflicts, have severely tested the resilience of global supply chains. These events have exposed vulnerabilities and highlighted the need for robust strategies to mitigate such disruptions.

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Commercial Auto

Around the P&C Insurance Industry: November 20, 2024

Porsche Auto Insurance:Launched an unlimited insurance product for high-mileage Porsche owners driving over 10,000 miles annually. This complements their pay-per-mile policies, allowing owners to choose fixed premiums or mileage-based options. Multiple vehicles on a single policy can also have mixed coverage. Safeco Insurance:Entered a book transfer agreement with Main Street America Insurance, enhancing its personal lines presence in 22 states. Main Street America is shifting focus to commercial lines, including commercial products and bonds. Resilient Cities Network & Tokio Marine Group:Partnered to bolster urban resilience projects. The collaboration supports the Resilience Finance Taskforce, helping cities globally scale investment strategies for resilience and climate adaptation. Skyward Specialty Insurance Group:Introduced life sciences liability coverage tailored for the life sciences industry, addressing risks such as medical liability, errors and omissions, and general liability. This strategic move supports the complex insurance needs of healthcare innovators. AAIS Partner Program:Welcomed Sproutr, offering AAIS members access to tools and services that streamline operations and foster growth in insurance processes. Duck Creek Technologies:Opened its second Center of Excellence in Warsaw, Poland, enhancing global customer service capabilities, particularly in Europe, the Middle East, Africa, and the Asia-Pacific regions. Liberty Mutual & Coursera:Launched an entry-level course, Insurance Sales Agent, to train learners in risk management, sales, and ethical practices, equipping them for careers in insurance sales. World Insurance Associates:Acquired United Counties Insurance Group of Old Bridge, NJ, expanding its regional operations. Previsico:Unveiled Instacasting, a flood mitigation solution using rainfall data for real-time surface water flood predictions, enabling faster and more precise response strategies.

COVID-19

Live Event Insurance: Navigating New Risks in a Post-Pandemic World

The surge in live events after COVID-19 has brought a new wave of challenges for venues. Whether hosting concerts, sports games, or festivals, ensuring adequate insurance coverage has become critical for managing increasing risks. Venue owners and operators must reevaluate their general liability and other insurance policies to safeguard against potential liabilities. The Risks Facing Entertainment Venues Imagine hosting a packed concert where pyrotechnics go awry or a brawl breaks out. These incidents can lead to lawsuits, legal fees, and insurance claims that could devastate your business if not adequately prepared. Proper coverage and legal risk management are the backbone of every successful venue. Tools for Managing Liability: Exculpatory Language To mitigate risks, venues often employ exculpatory language, such as disclaimers on tickets or websites. In New York, for example, these clauses can limit a venue’s liability for certain incidents, excluding cases of gross negligence. However, courts mandate that such language must be clear, bold, and conspicuous to be enforceable. Online ticket purchases further enhance risk management through clickwrap agreements. These agreements require customers to actively confirm their understanding of terms, adding another layer of legal protection. Understanding Assumption of Risk For recreational activities like concerts or sporting events, the doctrine of primary assumption of risk is another legal shield. It protects venues when attendees willingly accept inherent risks of the activity, such as injuries from a mosh pit. However, it does not cover negligence in venue maintenance or security lapses. Maximizing Insurance Coverage Given the complexities of live event liability, venue owners must ensure their insurance policies address all potential scenarios. Key steps include: Compliance and Risk Mitigation Under New York Insurance Law § 3420(d)(2), insurers are required to respond promptly to liability claims. Delays can result in waived defenses, placing greater responsibility on the insurer. Staying compliant with such laws is essential for efficient risk management. Preparing for the Unexpected The post-pandemic resurgence of live events highlights the importance of a robust risk management strategy. Regularly updating exculpatory language, reviewing contracts, and optimizing insurance coverage ensures venues are well-prepared to handle unforeseen challenges. At Skyscraper Insurance, we specialize in tailoring comprehensive insurance solutions for entertainment venues. From general liability to vendor contracts, our team can help you set the stage for success while managing risks effectively. Contact us today to learn more about protecting your venue and your business.

Maritime Risks on the Rise Despite Record Low in Lost Ships