Dubai: The UAE is tightening insurance requirements for vessels registered under its flag, according to a government advisory, amid growing concerns over ships sailing without top tier cover in the event of an oil spill.
Ships typically have protection and indemnity (P&I) insurance which covers liability claims including environmental damage and injury. Separate hull and machinery policies cover vessels against physical damage.
About 90 per cent of the world’s ocean going tonnage is covered by the 12 ship insurers that make up the International Group (IG).
According to the circular, non-members of the IG P&I Clubs are required to demonstrate that they have a minimum S&P Global rating of ‘A’, and provide a list of claims exceeding $10 million, or details of the five largest claims they have handled, including information on whether they have been settled or are still in reserve, before June 30, 2023. These insurers must also provide evidence of membership with a recognised maritime professional agency or regulatory body, and demonstrate that they have professional indemnity insurance with a minimum limit of $10 million.
Additionally, these clubs must have a claims settlement authority that is equal to or higher than the policy limit they offer; and provide copies of the Certificate of Insurance, approved financial certificates such as Blue Cards, and MLC (Maritime Labour Convention) Certificates. These insurers should have a Managing General Agent (MGA), that confirms the existence of an Agency Agreement, or Binding Authority Agreement (BAA) on a multi-year agreement basis, with a minimum duration of 24 months; and need to confirm the availability of an online vessel search facility, which allows for easy access to vessel information and verification.
Eng. Hessa Al Malek, Advisor to the Minister for Maritime Transport Affairs, MOEI UAE said: “By prioritising stringent P&I standards, we ensure the safety, financial security, and environmental stewardship of our maritime activities, attracting reputable investors, fostering trade partnerships, and creating a conducive business environment. These standards not only result in reduced risks and insurance liabilities, but also lead to increased confidence among industry stakeholders. As a result, we have full confidence that our ongoing efforts to strengthen the local, regional, and global P&I landscape will enhance the reputation of the national maritime sector, and foster sustained growth.”
With inputs from Reuters