Hurricane Ida: Considerations for Shipping Companies and Their Insurers | Adams and Reese LLP

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Hurricane Ida has now passed and many are still in damage assessment mode. What issues will shipping companies and their insurers face as we move forward? This update identifies some of the key issues that will likely come to the fore based on our experience with previous hurricanes.

1. Act of God?

Most hurricanes are treated by the courts as a natural disaster, but this is only the beginning of the investigation of marine liability claims. The central question will be whether Hurricane Ida was such a natural disaster that no reasonable preparation could have prevented a ship from breaking free. Note that this could be different in different locations, depending on the severity of the storm in specific locations. This usually requires a factual investigation that takes into account the forecast weather conditions, which are then compared to what actually happened, and a detailed assessment of the preparations undertaken by the shipowner.

2. Hurricane planning

Most shipping companies have or should have a hurricane plan that outlines the steps to be taken to secure or relocate marine assets and when these should be taken based on the evolution of any weather event. In liability claims, a central first question is how the execution of such plans was undertaken, often under difficult circumstances with rapidly changing information.

3. Disclaimer or limitation of liability

When a vessel has become free during a hurricane, the shipowner usually files a “limitation action” in which they will seek relief from liability on the grounds that the hurricane was a natural disaster such as no preparation. reasonable could not have prevented the vessel from being released or limited its liability in accordance with the Shipowner’s Limitation of Liability Act, 46 USC §§ 30501 et seq. the disaster value of the vessel, plus pending freight.

An action for limitation must be filed within 6 months of receipt by the shipowner of written notice of a claim, although it is generally prudent to do so within 6 months of the date of the loss and maybe earlier to try to establish jurisdiction. The burden of proof lies with the shipowner who seeks to limit his liability to demonstrate that any fault which caused the loss was caused “without the knowledge of the owner”. In general, this means that the courts will consider who was in charge of making the decision with respect to hurricane preparations and to what extent this reached the level of management so that it was attributed to the owner. Again, this is a factual investigation.

4. Who else could be at fault who cannot limit the liability?

Sometimes during hurricanes ships break free because the land structure they were attached to breaks down. The owner (unlike the shipowner) does not have the right to seek to limit his liability. Questions may arise as to whether the owner was at fault in not maintaining the property which failed and allowed the vessels to free themselves.

5. Don’t believe everything you read

There have been numerous reports of maritime accidents, including ship escapes, collisions, alliances, property damage and pollution. Not all of these reports are accurate and caution is in order. However, it is best to notify insurers of potential incidents as soon as possible so that a prompt investigation can be undertaken and claims can be settled. Communication is central.


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