PMSC Insurance Concerns Raised

In the wake of the IUMI Conference, Lloyd’s List has raised the spectre of insurance cover becoming invalidated in West Africa if armed guards do not have contractual liability insurance.

West of England P&I Club deputy director Chris South has spoken on the difficulties of getting underwriters to think creatively when it comes to contractual liability cover for private maritime security companies subcontracting to local navies in West Africa.

BIMCO’s Guardcon is based on the knock for knock principle, meaning that each party is responsible for personnel and property. It is thought that if an armed guard had an accident on a ship, that individual guard would not be constrained in who he or she sued and was therefore likely to start legal proceedings against the shipowner. However, the knock for knock principle entitled the shipowner to be indemnified by the PMSC.

It was stated that underwriters insuring PMSCs have been arguing against buying cover for contractual indemnity, however the West African context is proving extremely problematic.