Marine, Transport Risks of Refugee Crisis

As European governments approved a controversial plan to share 120,000 refugees between most of the European Union countries, there’s an important insurance story playing out amid the ongoing flow of thousands of refugees into Europe.

The risk management challenges and costs for freight transporters, haulers and shipowners arising from the refugee crisis are outlined in a recent Business Insurance article.

It reports that with thousands of refugees attempting to board trains and trucks heading for the United Kingdom at the French port of Calais this has caused problems for companies transporting goods.

Some of the risks they face include potential loss of earnings due to delays at ports, risk of damage to goods, fines for illegally transporting refugees if they board trucks undetected as well as driver safety.

Shipowners must also have emergency procedures in place to help their crews deal with situations given their legal and moral obligation to help ships in distress, Business Insurance notes.

A Reuters report suggests that more and more commercial ships are being drawn in to rescue refugees from unsafe and overloaded vessels in the Mediterranean:

Since January 2014, more than 1,000 merchant ships have helped rescue more than 65,000 people, according to estimates from the International Chamber of Shipping. That’s more than one in 10 of the estimated 585,000 migrants and refugees who crossed the Mediterranean over the period.”

Some of the merchant ships’ risks are covered by insurance, Reuters says.

Mutual marine insurers, also known as P&I clubs, provide cover for a wide range of liabilities including crew injury, pollution and cargo loss and damage.

So, if a refugee attacks and injures a crew member or breaks into a container and damages cargo, insurance would cover the shipowner.

But because rescue operations can take ships off course into uncharted waters, Reuters reports that other risks including fines for late arrival or the cost of chartering another vessel at short notice may not be covered.

Uncertainties also surround liability in the case of death or injury of a refugee while being rescued by a ship’s crew.

In June the Maritime Safety Committee (part of the International Maritime Organization) agreed that there was an urgent need for the international community to make greater efforts to address the problem through safer and more regular migration pathways, and to take action against criminal smugglers.

Check out I.I.I. facts and statistics on marine accidents here.