Armed Guards Cutting Corners On Insurance

Private maritime security companies are dangerously under-insured and this raises serious liability concerns for shipowners.

James Wilkes, managing director of specialist maritime investigation company Gray Page, said the minimum level of cover required for employers’ liability for PMSCs was £5m ($8m) and many firms were not meeting this obligation.

“There is reason for concern and the responsibility lies with the PMSC, but if firms don’t have appropriate cover in place, shipowners should be insisting on it. P&I Clubs have a very firm view on this.”

He said a problem was that PMSCs are service-based companies that generally don’t tend to be rich in assets and this could become problematic for shipowners if they, or a third party, tried to sue a PMSC, as all they can really rely on is the firm’s insurance; if it is insufficient, there will be little they can do.

“There is an unequal relationship between shipowners and PMSCs in that one is incredibly well insured and the other definitely isn’t. What comfort can shipowners have that PMSCs can stand up to their own liability?

“PMSCs have to be realistic. They are in business in a large commercial world and if they want to have contractual relationships, they need to get the right cover.”

Security Association for the Maritime Industry founder Peter Cook admitted this was an issue that needed addressing urgently.

“Maritime security is a new area and the insurance products to provide adequate support for PMSCs have not been easily available in the market until now. It is also a somewhat challenging area and the premiums are quite high.”

He said that SAMI was working with some leading insurance brokers to formulate a good set of insurance products for the maritime security industry and this was also being done in co-ordination with P&I clubs.

“This means everybody has to be diligent when contracting private security to ensure they have adequate protection,” he warned.

SAMI will be issuing insurance advice to its membership, which Mr Cook said now totalled more than 70 PMSCs, later this month.

2 Comments
  1. DONOVAN 8 years ago

    i would like to included into the responce s regarding insurance cover and premium alterations, as it is very expensive currently for small to medium companies.

  2. Szymanski 8 years ago

    Donovan

    I am not sure I understand your request / suggestion. Would you like to BE included in the response or would you like to see responses regarding insurance cover and premium alterations?

    Knowing what you would like would allow us to actually provide info you require 🙂

    Brgds
    Kuba

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