MARAD TO REVIEW WAR RISK INSURANCE FOR INLAND, COASTAL TITLE XI SHIPS
The U.S. Maritime Administration has started to review its policy for commercial war risk hull and protection and indemnity insurance for Title XI vessels operating in U.S. inland rivers, intercoastal waterways and in the Great Lakes.
“Some experts are predicting a possible marine threat, either as a means or as a target or both, if another terrorist attack were to occur against the U.S.,” the agency said. “We have the authority to rescind or revise the existing waiver policy and to impose the full war risk cover on all Title XI vessels if we determine that it is now necessary.”
Currently, MarAd waives the Security Agreement requirement for commercial war risk hull and protection and indemnity insurance on Title XI mortgaged vessels, which are operated exclusively on the inland river and intercoastal waterways. The policy dates back to June 30, 1971, when it was approved by the assistant secretary of commerce for maritime affairs.
Most operators in the inland waterways and intercoastal trades have taken advantage of the waiver. MarAd estimates that about 20 companies with more than 500 vessels, including a large number of inland barges, are not insured for war risks.
A standard war risk insurance policy covers a number of non-marine perils risks, such as warlike operations, strikes, civil unrest and terrorist acts.
“The basic underlying assumption for the war risk waiver for inland/Great Lakes was that the threat of attack within the continental 48 states or Great Lakes was very slight. Events of Sept. 11, 2001, have called this basic assumption into question,” MarAd said. “As a consequence, we may begin to require that some or all of the inland Title XI vessels have war risk coverage.”
MarAd said it will be taking comments from the industry about the possible policy change through Nov. 13. For more information, contact Edmond J. Fitzgerald of MarAd at (202) 366-2400.