Baltimore bridge collapse: Insurance loss could hit $3 billion

(LANKAPUVATH | COLOMBO) –  The collapse of a bridge in the US city of Baltimore will result in the largest single marine insurance loss ever, a British insurance marketplace said.

Six people were presumed dead after a ship crashed into the bridge, and divers have recovered two bodies.

Experts say the damages could cost as much as $3 billion (£2.3 billion).

“I would say it’s certainly going to be one of the largest marine losses in history,” said John Neal, chief executive officer of Lloyd’s of London.

“Of that there is little or no doubt,” Mr Neal told the BBC. “But genuinely the good news is it’s insured.”

Mr Neal said the port and the ship that crashed into the bridge are also insured.

“So from a financial point of view, there is a process that will allow for financial compensation to be made and for the claim to be settled,” he said.

The Maryland Department of Transportation has so far asked the Biden administration for $60m in emergency funds to help clear debris and clean up after the incident.

Addressing the bridge collapse is not the only expense, either. Until the shipping lane is reopened, experts say the incident could lead to losses of up to $15m (£11.8m) because of how vital the Baltimore port is to global commerce.

Mr Neal would not offer a number for how much insurance companies may be billed for the collision, but analysts at Barclays have said the claims could cost insurance companies as much as $3bn.

The analysts said damages to the bridge itself could amount to $1.2bn, while insurance companies may face fees between $350m and $700m for wrongful deaths.

Closure of one of the US’ biggest ports while the bridge is repaired could also cost millions of dollars, Barclays’ analysts said.

The Port of Baltimore is the 14th largest in the US. In 2023, 52.3 million tonnes of foreign cargo, worth $80.8bn, passed through Baltimore, according to data from the state of Maryland.

Experts have stressed that the closure of the port could have ripple effects on global supply chains.

President Joe Biden has said the federal government should cover the cost to rebuild the bridge.

Paul Wiedefeld, secretary of the Maryland Department of Transportation, and other officials noted that resolving the bridge collapse will not be a quick process.

But he promised at a press conference on Wednesday that officials were working to “come up with a design for the replacement of that bridge as quickly as possible to get the port back up and the community back up and running”.

Source: BBC

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