Development of a New Insurance Protocol for Marine Casualty Response

Abstract

ABSTRACT Marine casualty response has become increasingly complex. Many responsible parties (R.P.'s) do not have the financial resources to fund the potentially high cost of spill response and other aspects of a casualty and they must rely on their various marine insurers, including hull, protection and indemnity, and pollution to cooperate in a timely and effective response. While underwriters have traditionally worked together to coordinate their response and solve response issues, clear responsibility for certain aspects of response has become blurred because environmental concerns are playing a greater role in salvage, firefighting and other aspects of marine casualties. The pollution liability insurers are increasingly being asked to both finance and oversee aspects of marine casualty response that have traditionally been part of the responsibility of other insurance interests. Increased environmental sensitivity, however, should not lead to a shift in the traditional roles of marine insurers in responding to marine casualties. Instead, the marine insurance industry must look to new ways to address the interplay of their coverages to ensure timely casualty response and funding of all necessary operations. This paper will outline possible approaches to address this issue and explore the problems of establishing a market protocol. The protocol could address initial funding of the casualty response and the use of dispute resolution mechanisms such as arbitration. There may also be value in developing a United States agreement along the lines of the Special Compensation P & I Clause (SCOPIC) and there may also be a need to create a new open salvage contract.