Claims Analysis Highlights Vessel Type Differences

grounded ship

By MarEx 2016-03-16 19:05:55

A new report from the Swedish Club shows the hazards and job complexities that seafarers face are very much dependent on vessel type. 

In P&I Claims Analysis, published this week, the club studied thousands of incidents in the last ten years. Bulk carriers top the charts, with the greatest increase in the number of claims. This trend is also being seen in the container sector, with both the cost per claim and the number of claims rising. The frequency and cost for tankers is the lowest of the three types.  

The report highlighted both an increase in claim costs and a rise in the number of claims for the most common P&I claims: cargo, illness and injury, over the last ten years. The club has seen a rise in the number of claims for all vessel types.

Cargo Claims

With the various vetting processes in place, it is no surprise that tanker claims make up the smallest proportion of cargo claims seen by the club. However, around 60 percent of claims and the same proportion of costs were incurred by improper cargo handling and insufficient cleaning.

Seafarers working on bulk carriers must take care to avoid cargo damage, with bulk carriers recording both the highest average cargo claims cost and also the most frequent claims over the last ten years, says the club. A failure to check cargo properly before loading and improper cargo handling are the cause of the most expensive and most common claims respectively, emphasizing how important it is for crews to monitor entire cargo operations to secure as much evidence as possible about damaged cargo.

The proper treatment of cargo seems to prove a challenge across all market sectors: by far the most frequent claims are for improper cargo handling, making up over 30 percent of the total claims. At the same time the most expensive claims come from the problem of inherent vice - when cargo has been contaminated or not in a proper condition when loaded.

Only about one percent of expensive cargo claims were above $500,000. However, they were 50 percent of the overall claims cost for 2013 and 30 percent for 2014. While claims in the $1-5000 cost interval fell by almost 50 percent between 2013 and 2014, those in the $5,000-50,000 cost interval rose by about 30 percent - not a coincidence.

Illness and injury claims

Seafarers on container ships needs to watch their step, says the club, as almost 60 percent of all slips and falls occur on container vessels – almost certainly due to the amount of debris on board and the number of people involved in cargo operations.

Statistics show that slips and falls are the biggest concern on all three types of vessels studied, causing over 44 percent of claims and making up the same percentage of costs.  The frequency for injuries has increased substantially since 2012, with the locations on board where most injuries occur being the cargo deck areas, machinery room and open deck areas. Most injuries happen during routine maintenance which normally requires a work permit and risk assessment.

Whilst average claims costs for injuries have been relatively stable, there has been an increased frequency – possibly explained by a greater awareness of the right to make a claim and the level of financial compensation available, says the club.

The frequency of illness claims has remained somewhat stable, but the club has seen a steady rise in the average cost of illness over the past ten years across all categories. The reason for this may be increased medical cost and older crew, which need more medical assistance.

The report is available here.