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Contaminated Fuel Speculation and the Insurance Fall-Out from the Baltimore Bridge Crash 

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Contaminated Fuel Speculation and the Insurance Fall-Out from the Baltimore Bridge Crash 

One of the factors investigators are looking into surrounding the Dali cargo ship crash into the Francis Scott Key Bridge in Baltimore is “dirty fuel.” An officer aboard the ship recounted the presence of a heavy smell of burning fuel in the engine room after one of the engines shut down. Dirty or contaminated fuel can create clogging issues with a vessel’s principal power generators.  

Ships use different fuels depending on the points of their cruise. A relatively light diesel fuel is standard while vessels are inside a port, and if contaminated, algae, dirt, and water are the most common culprits. 

The Dali is a Panamax-type ship built in 2015 by Hyundai Heavy Industries. The vessel has a capacity for 10,000 containers and is one of thousands that frequent the Suez and Panama Canals. The Dali underwent more than 20 port state control inspections, and according to the international shipping database Equasis, none of the inspections resulted in the ship’s detention. 

The Singapore-based Synergy Marine Group operated the Dali on the Tuesday, March 26th crash. The ship was hauling cargo for A.P. Moller-Maersk and heading for Sri Lanka. The Dali was moving at an industry-standard speed of roughly 9.2 mph, and weather conditions were stable. 

Insurance analysts expect the bridge collapse to result in multiple multibillion-dollar insurance claims. Disruption to businesses that rely on the port to the bridge itself will require coverage, and the crash victims will likely raise claims against the ship operator. 

The entities that will bear the bulk of the insured cost are the reinsurers, who take on risks sold by the insurers. Britannia P&I Club is the Dali’s insurer, and it is common for specialized marine insurers to have reinsurance coverage of approximately $3.1 billion for vessels like the Dali.

For a point of comparison, thirty-two people perished in 2012 when the cruise ship Costa Concordia sank near an Italian island. Insurers paid over $2 billion to claimants. Meanwhile, in 2022, the car carrier Felicity Ace, caught fire and sank, resulting in approximately $500 million being disbursed under insurance policies.