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Mandatory rules imposed on shipping
and their insurance cost
Dale Hammond
Director, Tindall Riley (Britannia) Limited
Managers of The Britannia Steam Ship Insurance Association Limited
In this presentation I will talk about the impact that the growing number of
mandatory laws and regulations have on shipowners and how this has the
potential to increase the costs of insurance including, frommy own perspective,
P&I costs. When I talk about the costs of insurance, I am particularly thinking
of the penalties and associated costs that a breach of regulations may lead to
and which, if covered as a P&I risk, will feed into the costs of P&I insurance.
There are many issues I could have chosen to talk about to illustrate these
developments. However, I will focus on just 3 very different issues that are
having, or in future may have, a significant impact on shipowners. These are:
(1) the refugee crisis, particularly as experienced in the Mediterranean
Sea, and the obligations imposed on shipowners under international
conventions;
(2) the increasing regulations aimed at minimising pollution from ships; and
(3) economic and trading sanctions in relation to Iran.
Throughout this presentation I will refer to an expectation by governments and
international organisations that mandatory laws and regulations are needed
to ensure that shipowners act as “good citizens” of the world. However, acting
as a good citizen imposes obligations on shipowners, which I categorise as the
“shipowners’ burden”.
This burden can take several forms: The ones that I would particularly like to
focus on are:
(1) the additional costs caused by compliance with regulations ;
(2) the fact that so many regulations create uncertainty for shipowners: this
is for various reasons, some of which may be deliberate but others simply