Every Tanker Calling on the US is Illegal

OPA 90, along with the billion plus dollar claims out of Piper Alpha and the Exxon Valdez, has changed in a “Draconian” fashion the costs of coverage in the marine insurance market, according to Johnson and Higgins’ Michael Northmore.

Now a back room confrontation which could ultimately mean that tankers calling at US ports are doing so illegally is about to spill over. P&I clubs have been able to purchase reinsurance of about $1.25bn to make themselves whole for member losses. The one exception is in the area of oil pollution liability, where the reinsurers will not offer it and the clubs are not anxious to buy it above $500m.

Under OPA 90, the US Coast Guard must draft regulations which would, in effect, make the Clubs directly responsible for the liability costs associated with a spill of a member shipowner. US Congress is pressing the Coast Guard to be very strict in this regard, and it is expected the Coast Guard rules will, indeed, make the Clubs directly liable, even if the owner were to have breached a warranty.

This is only an excerpt of Every Tanker Calling on the US is Illegal

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