Sanchi wreck claims won't exceed US$200 million

Claims arising from the wreck of the Iranian oil tanker Sanchi are not expected to exceed US$200 million.

The oil tanker collided with a Chinese cargo ship off the coast of China on January 06, killing its entire crew of 32. All 21 of the cargo ship’s crew survived.

According to a report by shipping news portal Tradewinds, a US$95 million reserve has been put on the protection and indemnity (P&I) claim from the sinking of the Sanchi, which was built in 2008 and weighs 164,000 DWT. It covers pollution, loss of life, and full collision liabilities.

The hull and machinery insurance of the National Iranian Tanker Company, which operates the Sanchi, is at US$32 million, while the ship’s cargo is insured at US$67 million. This means that the total insurance bill is expected at US$195 million, barring an unexpected claims rise.

The P&I claims reserve put on the Sanchi’s loss by the Steamship Mutual P&I club is just short of the US$100 million threshold where the International Group’s reinsurance programme kicks in.

However, there is also a substantial pooled claim for the 13 International Group clubs which also hit Hydra, the P&I clubs’ captive reinsurer. With the P&I claim of US$95 million, Hydra’s exposure is at around US$61.6 million.

The Sanchi’s hull insurance was led by Skuld’s Lloyd’s Syndicate 1897, which already settled the claim. Meanwhile, the ship’s cargo was insured mainly by Hanwha Insurance Group of South Korea.

On the other hand, the Chinese cargo ship, the CF Crystal, has P&I cover from Skuld.

The incident, which happened in the East China Sea, is not expected to cause major shoreline pollution, which will keep P&I liabilities low.