Recently, a cargo ship carrying thousands of luxury cars caught fire while being transported from Germany to Rhode Island. While it was a relief that the crew members were safely rescued from the ship, the same cannot be said for the estimated 4000 vehicles aboard the cargo ship (Felicity Ace). The huge fire likely engulfed the vehicles onboard and an estimated US$400 million loss tag was assigned to the various automakers that had their vehicles onboard the ship. Volkswagen Group, which had 1100 Porsches, along with other Volkswagen, Bentley, Audi and Lamborghini models, was estimated to have lost at least US$155 million.
This incident will no doubt put even more pressure on the supply chain strain that’s being felt across the world, and more so for vehicle manufacturers as they grapple with computer chips shortages. It also highlighted the importance of having adequate insurance coverage in place to mitigate such incidents. While the fire likely destroyed most of the vehicles, it is unlikely that the various vehicle manufacturers will bear the full US$400 million in losses, as they will have marine cargo insurance in place, alongside the shipowner. As such, the vehicle manufacturers are likely to have incurred part of the damages instead of in full, with insurers picking up the bulk of the liabilities. Likewise, the hull insurance held by the shipowner will also have covered part of the damage suffered by the cargo ship.
Contact MAKinsure to assist your company with a review or quotation of your insurance coverage today.