You would have seen the news in mid January about the huge cruise liner Costa Concordia running aground off the coast of Tuscany near Giglio Island.
The major disaster resulted in 32 people drowning and hundreds injured which is an absolute tragedy and an event that will also have a major insurance impact for Costa Cruises who own the Costa Concordia.
The damages in terms of possible insured losses due to the damage to the hull and claims arising from personal injury, liability and environmental damage could push losses up to $1 billion ($US). This figure also includes the potential loss of profits to the company due to the event occurring at the beginning of their peak season.
It is not only the insurable cost of the event that is overwhelming. The complex negotiations that will be going on behind the scenes with the many insurance companies and law firms involved in the event will likely see settlements drag on throughout the year.
There are reports that the owner of the Costa Concordia plans to refloat the vessel and tow her away “in one piece” in an unprecedented salvage operation that will cost an estimated $220 million. It is then almost a certainty that the ship will never carry passengers again.
This would make this disaster the largest maritime loss since the 1989 Exxon Valdez oil spill in Alaska and one of the single largest insurance loss in recent memory.