1) Attendees to the call

• Anthony Mollet, Chair (AM),
• Jerry Carter, Price Forbes Insurance (JC)
• Jamie Cook, Lockton Insurance (JCook)
• Martyn Locke, Xenia Insurance (ML)
• Steve Simms, Simms-Showers LLP (SS)
• John Phillips, Awyr Las Ltd (JP),
• Iain Butterworth, Butterworth Marine (IB)
• Anthony Desbrousses, Marine Recoveries (AD)
• Martin Smits, Trefoil Bunkers (MS)
• John Tsogas, Sekavin Bunkers (JT)
• Leo Aunchayna, Christophersen Bunkers (LA)
• Nikki Jessop, Maritime Bunkering (NJ)
• Tani’ George, Plus Petroleum Bunkers (TG)

2) Matters Discussed

Introduction

AM opened the meeting and gave an outline of the aims for the Group in this specific area of Insurance Policies and Cover (Please see attachment to the Minutes with script of opening introduction.)

The view from insurers

JC commented that the Bunker Market continue to have a comparably low rating for insurers but that this is appetite to grow the portfolio of bunker suppliers. He believes shipowners are increasingly demanding to know about suppliers’ policies and to be assured about their levels of cover. With the price of bunker fuels and also new emerging fuel markets and pricing indices, the exposures for suppliers remains significant. More suppliers should be considering their product liability cover accordingly.

JT stated from their position in Greece that they buy product directly from their own refinery and as such have greater assurance of product suitability before on-selling and supply. JCook added his agreement that many insurers have withdrawn from the bunker sector. There are many misconceptions about what elements are / are not included in policy cover, especially with Product liability and P&I.
JCook states a bespoke approach is required by the insurer to make certain the unique risk characteristics are captured and considered. There are advise gaps that need to be filled. Suppliers should review policies and consider buying back elements that are excluded.
JCook further recommends for insurance policies to be packaged together, as this can help with scale and therefore overall cost, e.g., P&I, Product Liability, Hull & Machinery)

JC does believe there has been an increased level of interest and engagement from the bunker supply companies recently, believing they are recognising the risks and need to review policies. He further agrees that the policies require very tailored wording, alongside legal GT&Cs to ensure cover is a reflection of the operational risks and likelihood of events occurring.
Both JC and JCook agree that bunker suppliers have to become better at taking a risk management standpoint when reviewing insurance against their business, growth and general strategy.

The view from the legal aspect

SS picked up on the issue with wording and terminology and emphasized the need for suppliers to disclose everything that is potentially insurable in their operation. The phrase “at most, good faith” can be a problem. How much a supplier demonstrates they have their business operations covered and can show willingness to avoid events and reasons to make claims is imperative.

Furthermore, it has to be considered what legal jurisdiction the supplier operates in and again, this links to GT&Cs.

SS also highlights (linked to his article in Bunkerspot, available on the MFA portal) the importance for a supplier to understand the degree to which theirs is a Marine Insurance Policy. There needs to be greater education to make sure suppliers are aware the nature of the policy and the specific elements of cover that is being provided for the insurance fee.

IB reemphasised that the impact for a supplier is huge, if they are not checking policies regularly and in a structured manner.

IB asked to the panel “when an insurance policy is being renewed, do insurance brokers ask to look at the GT&Cs?” JC stated that typically this is requested. He further added that a sound set of GT&Cs can drive down premiums, if they truly reflect and capture the specific elements of a suppliers’ business and operational risk. He also said that Product Liability cover can be very beneficial to have in place in case of claims.

Credit insurance and how it differs

JP argues that credit decisions are daily, operational events and therefore, the importance of credit insurance is more fluid and generally better understood and reviewed by suppliers. He does believe suppliers are on the whole lax at reviewing documents and the detail of a policy, generally leaving it until renewal time rather than fully comprehending the clauses and impact regularly.

JP raised the benefit of suppliers selling to SPV entities and how this can provide a stronger position for suppliers in the case of a credit claim. An “assumed” ownership structure can cause confusion when chasing unpaid bunker debt. The ring-fencing of a vessel ownership can be beneficial for a supplier when considering credit policy.

ML agrees that credit control is more of a daily consideration. It is more interactive and generally gets discussed more often between the insurer and insured. The motivations of corporate governance and relationship with bank for invoice factoring and loans, means credit policies are given more attention by suppliers.

The view from bunker suppliers

NJ admitted that as a rule, the details and particulars of their company insurance policies are not discussed and shared with staff. She recognizes this would be beneficial, to ensure operational and sales colleagues are aware of the wider risks and implications to the business.

MS raised the point that many suppliers do not own the barges and charter them in. He posed the question about obtaining permits to perform bunker supplies and if all insurance policies associated between the entities are understood. He also posed the question as to whether different or additional insurance is needed for a company time-chartering tonnage in to perform supplies.

MS further considered the importance of GT&Cs being robust. With traders sitting in the middle of deals and therefore back-to-back terms being agreed, he believes it is imperative a supplier sticks to their own GT&Cs and not become caught at the end of the claim chain. Insurance cover in this regard is essential.

JCook agreed and re-stated the need for suppliers to have some built in flexibility to cover the various types of barge ownership, charter and supply methods. He reminded the panel the need for open and full disclosure of business operations when discussing policies and renewals. Insurers can help if suppliers come forward with all aspects of how they operate and where they feel the risks lie.

MFA potential resources, guidance and support

AM informed the panel that work is underway to create an insurance policy guideline. This and an FAQ sheet will be added to the MFA portal for members to review.

The insurance companies represented in the meeting are all offering for members to discuss any insurance policy question or request a review. Members are to contact the MFA and will be put in contact with relevant experts accordingly.

The MFA is promoting its assistance to bring members closer to insurance companies and to begin a process of policy review and risk assessment of their business operations.