UK Ship Insurer Sees Problems Paying Claims Involving Sanctions-hit Russian Provider
Paying claims for ships involved in accidents or collisions with other vessels covered by sanctions-hit Russian insurer Ingosstrakh will prove difficult, UK ship insurer West said, in another sign of complications with Moscow's oil trade.
In June, Russia's Ingosstrakh, which provides services to Russian oil exporters including ship insurance cover, was added to the UK's list of Russian entities under sanctions in what the British government said was part of efforts to "ramp up economic pressure on Moscow".
West is among 12 clubs offering protection and indemnity insurance to ships, which covers third-party liability claims including environmental damage and injury. The 12 insurers, which form the International Group of P&I clubs, cover around 90% of the world's ocean-going tonnage.
In one of the first industry responses to the UK sanctions, West said in an advisory this week it "may be constrained on our ability to provide cover for members with regard to any liabilities incurred with another vessel insured by Ingosstrakh".
This is especially the case where that is by way of a planned operation such as a ship-to-ship transfer of oil, it said.
In the event of a collision with an Ingosstrakh-insured vessel, West added that its members "are advised that the club may need to seek a licence to pay or reimburse any resulting liabilities."
"Such a licence may take time to obtain, if indeed it can be obtained at all," West said.
In response, Ingosstrakh said the advisory was "a misleading attempt to dissuade shipowners from doing business" with the Russian insurer.
"West claims it could be prohibited by sanctions from providing coverage in the event of a collision with a ship insured by Ingosstrakh, but West provides no explanation for why sanctions laws would prohibit coverage payments since payments are made to the injured party, not Ingosstrakh," Ingosstrakh said in an emailed answer to a Reuters' request for comment.
(Reuters - Reporting by Jonathan Saul and Moscow bureau; Editing by Cynthia Osterman)