Key Bridge collapse could be largest-ever financial maritime loss

BALTIMORE — The deadly collapse of Baltimore’s Francis Scott Key Bridge could rival or beat the maritime industry’s largest-ever financial loss, with insurance claims expected to reach $1 billion or more.

“It’s going to be a big claim, and the big number there is the potential cost to rebuild the bridge,” said John A. Miklus, president of the American Institute of Marine Underwriters, in an interview Tuesday, a week after the bridge was struck by the freighter Dali and collapsed, killing six people. “This is one of the largest, most complicated marine claims I can think of.”

The cost of rebuilding the nearly 50-year-old steel arch bridge alone could run high into the hundreds of millions of dollars. Miklus and other experts believe the bridge collapse, which sent a crew of workers who were repairing potholes on Interstate 695 tumbling into the frigid Patapsco River, could rival the largest financial loss to date.

That occurred over a decade ago, when 33 people died after the Italian cruise ship Costa Concordia grounded off the coast of Italy and partially sank during a Mediterranean voyage. The International Group of P&I Clubs, a group of 12 self-insurance clubs that offer marine liability coverage for 90% of the world’s oceangoing vessels, paid $1.5 billion in claims.

Britannia, a P&I member that collectively shares loss exposures among the 12, insures Dali owner Grace Ocean Private Ltd., according to Britannia’s website. Britannia and the other clubs are backed by an extensive reinsurance pool that spreads losses throughout the global insurance market, made up of large, well-capitalized companies with a maximum claims capability of $3.1 billion.

“They’re the ones that are going to be on the hook for the big numbers, because that encompasses all of those third-party liabilities … removal of the debris, loss of life, rebuilding the bridge,” Miklus said.

On Monday, Grace Ocean took the expected first step in what likely will lead to years of litigation to sort out who pays for which damages and how much. Singapore-based Grace Ocean and Synergy Marine Pte. Ltd., which manages the 984-foot cargo ship, together filed a claim in Baltimore’s U.S. District Court asking a judge to clear them from liability or limit damages to the value of the ship plus the revenue it stood to make from its cargo, which they estimated at $43.7 million.

The vessel could be responsible for “third party” liabilities, such as the death of the bridge workers, removal of debris, and the cost to rebuild the bridge.