A WORLD OF RISK ON LAND, SEA AND INLAND WATERWAYS

Ocean marine insurance is the "unsung hero"

Although ocean marine insurance does not receive the kind of attention given to life, health, automobile and homeowners business, nevertheless it is a highly significant sector in world commerce. It has also been around longer than any other form of insurance and has the deserved reputation of being the forerunner of the insurance concept.

Ironically, looking at all that's been written in the general press about the Hurricane Katrina disaster, it's hard to find any specific mention of marine insurance, even though there are vivid descriptions of the costly losses to properties such as the oil rigs and gaming boats that are covered by marine underwriters.

This is not to criticize the enormous print, radio and TV attention given to the disaster of Katrina, because the emphasis was where it belonged: the horrendous devastation of the Gulf Coast, and the awful toll of death, human suffering and dislocation.

The reason for the near anonymity of ocean marine insurance is probably that it operates in a sphere that hardly arouses the attention of the general public or even the more sophisticated business leadership. Most people are probably unaware of the extent of waterborne commerce in the United States, both in international trade and on inland lakes and rivers. That lack of awareness may include many in the insurance business.

However, because the Gulf ports are such an integral part of American ocean commerce and the oil rigs and pipelines are so vital to our energy supply, those losses and the insurance coverage to help restore normality should have drawn more attention.

Also exposed to loss and covered by marine underwriters are piers, cargo awaiting distribution, storage buildings and vessels. Marine insurers also insure those very important tourist centers, the gaming ships (floating casinos), which are structured atop barges. The moored facilities off the shores of New Orleans, Biloxi, and other Louisiana and Mississippi locations generated nearly $1.5 billion in revenue in 2004, according to a story in The New York Times. These losses may add to marine insurers' woes if they sold the product referred to as "trade disruption," a relatively new coverage similar to business interruption insurance.

by Levy, Emanuel