Potential Claims Impacts Resulting from the Francis Scott Key Bridge Collapse

How to handle complex ports and terminals business interruption insurance claims, marine and cargo damages, and marine stock claims are topics that have again come to the forefront of claims professionals’ minds following the tragic Francis Scott Key Bridge collapse in Baltimore.

Many have sought to put a figure on the total value of claims, in some cases more than $4 billion; meanwhile, the owners of Dali have sought to limit liability to the value of the vessel, estimated to be $43.67 million, according to the court filing. It remains to be seen how many policies have been triggered by this event, and the value will only be known in time.

Potential Claims

Ultimately, the numerous claims will take months, if not years, to resolve. Below are some of the potential claims:

• Rougly 50 million tonnes/$80.8 billion of foreign cargo.
• More than 1 million tonnes of roll on/roll off farm and construction machinery.
• 1 million Twenty-foot Equivalent Unit containers.
• 11 million tonnes of general cargo.
• 847,158 cars and light trucks (more than any other U.S. port).

While concessions on the east side of the bridge are not blocked, those to the west are expected to be impacted for some time yet. Officials have indicated a plan to open a 35-foot-deep temporary channel within weeks with a number of vessels already having used two small temporary channels.

There is hope the entire shipping channel can be cleared by the end of May 2024, with roghly 1,000 tonnes of debris already removed. In the meantime, many vessels will be diverted to other ports along the east coast such as those in New York and New Jersey with onward travel by road and rail.

• Port Tariffs: Loss of movement tariffs and charges and/or stevedoring revenue.
• Silo or Warehouse Storage: Loss of revenue while vessels are diverted to other ports.
• Increased Costs/Extra Expense: Additional cost of transportation or workarounds to mitigate a loss of revenue.
• Losses at Other Businesses Ancillary to the Port Itself: Ingress or egress policy extensions often stipulate affected property should be situated within a specified distance of where ingress or egress is prevented, which could be the start or end point of the bridge .

The extent to which losses can be mitigated will ultimately depend on the circumstances of the affected parties and undoubtedly there will be ongoing discussions, negotiations, and disputes along the way regarding the quantum of loss.

Retaining a forensic accountant early and involving other relevant experts (marine engineers, structural engineers, equipment engineers, etc.) can provide tremendous value to the claims review process. Given their unique skill sets and experience managing large or small ports and terminals claims globally, they can prove to be invaluable resources for insurance companies, independent adjusters, and law firms.

Thorpe is an executive vice president in J.S. Held’s Forensic Accounting – Insurance Services Practice, based in Dubai, UAE. He has more than 17 years of experience. He can be reached at dthorpe@jsheld.com or +971 56 658 3620.