Two Greek-owned bulk carriers have been attacked and sunk by Houthi rebels in the Red Sea this week. The 63,027 dwt Panamax bulker, Magic Seas, was attacked with drones, missiles, rocket-propelled grenades on 6 July about 50 nautical miles southwest of Hodeidah. All members of the crew were rescued.
A day later, the 36,768 dwt bulk carrier, Eternity C, faced repeated attacks from rocket-propelled grenades launched from small craft. Three of the 25 people on board are understood to have died – two crew members and one member of a three-person security team.
Ten people were recovered from the water on Wednesday into Thursday, six others are understood to have been kidnapped by the Houthis and taken to an unknown location. So far, others remain unaccounted for, with four believed to have died.
The Houthis justify their attacks on commercial ships on the basis that the ships have alleged recent trading links with Israel. The Iran-backed rebel group has vowed to continue its aggression until Israel halts its campaign in Gaza.
Boilerplate P&I insurance policies which cover third party risks including loss of life, injury, cargo damage, pollution, and wreck removal, do not apply in times of war, civil war, rebellion, or as a result of hostile acts. Owners trading assets in regions affected by hostilities must therefore make alternative war-risk arrangements to cover these situations. These are made either through their P&I Club’s channels, or directly with specialist war-risk underwriters.
P&I Clubs contacted yesterday were reticent to comment. Mutual insurance sources, however, describe the P&I backdrop at times of hostility as ‘a rather grey area’. The approach of Clubs varies considerably, Seatrade Maritime News was told. The approach of some mutual insurers is apparently quite ‘transactional’ in the sense that if the policy specifically excludes war risks or activity in hostile waters, that is non-negotiable.
However, other Clubs may be more accommodating, in some circumstances possibly even interpreting the rules in favour of their members. Sources cited the so-called ‘omnibus clause’, also known as the ‘risks incidental to ship owning clause’. This is a discretionary provision that gives Clubs some flexibility to address unforeseen risks which, while not specifically covered in policy wording, could be deemed to lie within the scope of mutual insurance cover.
The issues are far-reaching and complex. Experts point out that at a sector-wide level, P&I cover for ships trading in dangerous regions are a concern for all members of the International Group of P&I Clubs (IG). All are potentially liable for large claims through the IG’s complex pooling framework.
At an individual level, they add, it behoves shipowners to ensure that all possible measures are taken to safeguard the welfare of seagoing personnel and their dependents, particularly ships’ crews working on board vessels trading in perilous waters.
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