With the colapse of that bridge in Baltimore, how and who will pay for the damages and losses caused?

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Mainly I’m curious if the insurance of the ship or any other kind of insurance company will be involved + any other source that will pay for this.

Im totally aware that first an investigation must be completed to know the causes in order to determine liabilities and consequences. Hypothetical cases are welcome 🙂

In: Economics

5 Answers

Anonymous 0 Comments

While it should be covered by the shipping company and the Maryland Transit Authority (who runs and collects tolls on the bridge) it will almost certainly be the US federal government and DOT.

I say that, somewhat sarcastically, because the Key bridge is a major part of Baltimores traffic management plan and having all that debris in the Patapsco River has shut down ports. This needs to be cleaned up and repaired(replaced) as quickly as possible. Waiting for courts to determine liability takes time, effort, and money. The Federal Government can start cleanup today.

I point out liability, because similar to the Evergreen container ship that got stuck in the Suez Canal, the ship owner and the operator are not always the same company. So the operator will say it was a faulty ship, and the ship owner will say it was poorly maintained and operated. Meanwhile the clean up isn’t happening because neither company wants to foot the bill.

Anonymous 0 Comments

Shipping is usually covered by Lloyds of London, which then divides that large insurance with smaller insurance companies.

Anonymous 0 Comments

The ship declared an emergency due to loss of power. that caused the bridge authority to close traffic on the bridge, but wasn’t in time to clear the workers who were using the overnight lull to patch potholes.

There will be an investigation, but either the ship owner’s insurance or the ship operator’s insurance is likely to pay a lot. It’s unsafe to operate a ship without adequate propulsion. It’s unsafe to not maintain your ship’s propulsion systems. There is plenty of blame to go around.

Anonymous 0 Comments

I used to work in homeowner’s insurance. The process might be slightly different with ships, but I imagine it will be something very similar to this.

The ship/shipping company’s liability insurance will jump in immediately and pay for the damages. From there, that insurance company will do something called subrogation. This is a process where they essentially make a determination about who was really responsible for the loss.

Was it a pilot error? Was it a maintenance problem? Was it a manufacturer problem for an engine part? They will do their best to track down the origin of the problem, then they will contact whatever insurance company is responsible for the issue and expect them to pay them back (typically a lot of lawyers are involved in this).

Anonymous 0 Comments

This isn’t really a situation where someone’s going to pay for damages and losses.

If you remember that ship blocking the Suez canal – the compensation afterwards was just related to the salvage operation, nothing to be done about the 10s of billions of dollars of trade that was impacted.

That’s the proximal problem now – the bridge in the water is blocking the port of Baltimore. So the federal government and DOT will get right on trying to clear the bridge, the state will do what it can, and at the end of all of this there might be some lawsuit against the company that owns the boat for operating unsafely (if that’s the case) but it’s not going to be asking for the cost of the bridge or the cost of lost trade in the next few weeks etc.