ERGO Hestia will participate in compensation payments related to the recent blockade of the Suez Canal. On board the ship Ever Given, which paralysed one of the key communication routes in the world for six days, were cargoes insured by the Sopot (Poland)-based company. Under the insurance protection, ERGO Hestia will cover the due cost of salvage of the insured property whose value exceeds 700 thousand PLN.
On 23 March, before 8:00 a.m., one of the largest container ships in the world sailing to Rotterdam ran aground and stood across the Suez Canal. This blocked any movement of other vessels using the canal – more than 350 ships were queuing.
The total costs from the incident are tentatively estimated at around $1 billion. A small part of this amount will be paid by the Sopot-based insurer. Goods of Polish importers – clients of ERGO Hestia – were among other containers on board the ship. The value of the insured assets exceeds 200 thousand USD, i.e. over 700 thousand PLN.
The cargo insurance, in addition to standard insurance cover, also includes a share in the so-called common breakdown, i.e. costs incurred to save the ship and cargo. Since the ship is carrying goods insured by ERGO Hestia, we will cover the costs of salvaging the property belonging to our customers,” says Agnieszka Nowacka, Property and Casualty Loss Adjustment Director at ERGO Hestia.
A complicated process
Determining who and in what amount should pay the so-called rescue costs is a complex and lengthy process. It will be carried out by the dispatcher, i.e. the person chosen by the shipowners to settle the costs. The cargo owners must provide him with guarantees from the cargo insurer to collect the cargo from the destination port.
In this type of incident, where time is of the essence, we support our clients. Our experts collect the relevant documentation, on the basis of which we issue financial guarantees which will allow our customers to collect their goods from the port – emphasises Agnieszka Nowacka.
For the time being it is difficult to determine how high costs will be incurred by ERGO Hestia in connection with the joint failure. They will depend on the final determination of the rescue costs and will be a percentage of the value of the cargo insured by the Sopot-based company.
This is not the first incident of this type in sea transport in which ERGO Hestia supports its customers. A similar incident, although on a smaller scale, took place in 2008. Then the MSC Sabrina ran aground on the St. Lawrence River in Canada. As part of the rescue operation, some 500 containers were reloaded onto another ship. The final salvage costs amounted to $3 million, which for ERGO Hestia translated into a compensation payment of $900. For Ever Given, however, the initial salvage costs are estimated at more than $300 million.