Who will pay for the Key Bridge collapse?
Who will pay for the Key Bridge collapse?
Six construction workers were killed as they repaired potholes on the Francis Scott Key Bridge before it collapsed, and two were injured. Over $500,000 has been raised for the families.
Meanwhile, two massive crane barges are lifting debris out of the water and onto a barge. Even with the cleanup well underway, so many questions remain unanswered about the disaster in Baltimore. One of the big ones: Who’s going to pay for it?
The collapse of the Key Bridge could well become the most expensive marine insurance loss in history.
“Something in the ballpark of $2 to $4 billion,” said Nadja Dreff, senior vice president for North American insurance ratings at Morningstar DBRS.
Roughly 100 insurance companies are involved, Dreff said. The owner of the boat that crashed into the bridge has maritime insurance. Everyone who sent cargo has cargo insurance. The bridge itself may be insured, and the Port of Baltimore has insurance for business interruption.
For now, all of those insurance policies are likely going to pay.
“Over time, as the investigation continues and there’s more clarity about exactly what happened and who’s ultimately responsible, insurers themselves will start recuperating some of those losses,” she said.
Meaning the insurers will sue whoever’s fault it is and the insurance company behind them.
The Dali’s owner is Singapore-based Grace Ocean; the company that manages the ship is Synergy Marine. They’ve both filed a petition in Baltimore under a law from 1851 that lets them argue their liability should be capped at the value of the ship — $42.5 million, they say — if they weren’t aware of whatever issue caused the incident.
“I doubt the ship owner will be able to limit its liability,” said Martin Davies, a professor of maritime law at Tulane University Law School.
Filing that petition may not end up limiting the ship owner’s liability, but Davies said it does gather all claims filed against them into one place — Maryland — rather than having them scattered around the world. He said that’s a benefit in itself.
If a court does find that the ship’s owner knew or should have known there was a problem, blame will be directed at the company, but it won’t stop there, said Lawrence Brennan, an adjunct professor of admiralty and maritime law at Fordham University.
There can be third parties, he said, like a fuel supplier that provided defective fuel or a bridge owner that didn’t put up the right lighting.
“That’s what you look for, as many people as possible to share the responsibility financially,” he said.
Brennan said that will take two to four years.
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