Claims commentary

By Mark Brattman, Claims Director

Claims at ITIC continue to be consistent - both in terms of number and net notified. The last full policy year (2024) was a slight improvement on the Previous Five Year Average (PFYA), but remains in line -

2024: claims reported 801 (indemnity and debt) 
PFYA: claims reported 860 
2024: net notified US$16.8m 
PFYA: net notified US$20m

In terms of the type of claims by number, again, these are very consistent with the top three for both 2024 and the PFYA being:

1. Ship agents (port / liner)
2. Shipbrokers 
3. Ship managers

Despite the majority of the claims coming from what could be described as “the holy trinity” ITIC continues to see a wide range of claims from the varied membership, including naval architects and designers, marine consultants, P&I club managers, yacht custom clearance agents and yacht brokers. 

Many claims settle via Alternative Dispute Resolution (ADR) - specifically mediation. This is always a good alternative to full-blown litigation or arbitration for a number of reasons. It is often cheaper, it happens earlier, it is private and confidential, and most importantly, it is an agreement reached by the parties themselves. Nothing is forced on the participants. Also, there is more scope for inventive solutions, so whereas at litigation a judge will simply say “this party is correct and this party is wrong” in a mediation, solutions can involve agreements to work together on future projects or say, a reduction in future fees to set off liabilities. Due to this, ITIC is organising a “mock mediation” for members to attend in Cyprus. We hope that the event will be replicated in future. 

The sanctions and regulatory environments continue to grow and can prove difficult to navigate for both ITIC and members on a day-to-day basis. Failure to comply with sanctions can have devastating effects to businesses and therefore everyone needs to be careful in how they act. The once simple act of opening a claim file for a member now requires far more information than ever with many parties (and even vessels) needing to be checked before we can proceed. 

Similarly, paying claims requires more due diligence. This is a good thing and something we always advise our own members. For example, if new bank details are provided to you or a request to change existing bank details is received, this is a red flag and extra precautions should be taken - specifically confirming the change with someone you know by telephone. If you don’t know anyone, it should be confirmed via a publicly accessible phone number ie one on their website, as the number on the email or invoice you have been sent could be fraudulent. 

We also await the outcome of the implementation of FuelEU and EUETS in respect of claims. We anticipate a time lag of around a year between the commencement and parties having the full information to assess if they have suffered any losses.