To enhance its resilience, a port can transfer certain risks to an insurance company. It should be borne in mind however that many risks cannot be insured, there may be large deductibles and there can be delays before claims payments are made. Therefore, insurance needs to be seen in the context of a wider risk management plan.

Insurers assessing overall port risk look at several risk factors across areas including: (i) nautical services; (ii) natural hazards; (iii) property fire; (iv) management and leadership; (v) maintenance; (vi) management of contractors; (vii) environmental exposures and control; (viii) health and safety management; (ix) contract management; (x) security; (xi) ship-to-shore operations; (xii) road and rail infrastructures; (xiii) cargo handling; and (xiv) business interruption.31

Experience reported by some insurers indicates that out-of-service cranes, particularly those involved in the ship-to-shore movement are often the source of many port business disruptions and financial losses. In ports, collisions between cranes, other cargo handling equipment, or vessels are common occurrences. Larger cranes also face risks related to extreme wind events. Ensuring that cranes are regularly maintained can sometimes be a challenge, particularly as it can take between 12 to 18 months to replace a crane should one be damaged. Insurers working on port issues, based on claims they have seen and the risk assessment work they have carried out, have a range of risks or potential risks as: (i) server rooms at or below water levels, therefore prone to flooding; (ii) infrastructure issues, such as port reliance on a single electrical substation; (iii) issues with the sole supplier of port piloting services; and (iv) a lack of appropriate weather forecasting capability to allow time to handle severe weather events.

When considering the risk of collisions between vessels and cargo handling equipment, insurers take into consideration the following elements:

  • Pre-arrival communications and exchange of information.
  • Position of structures on quay and berthing angles.
  • Use of tugs and pilots.
  • Load and unloading planning, e.g. lighting, noise, traffic management, housekeeping, access/egress arrangements, suspended load controls, segregation of operational areas, supervision, etc.
  • Non-planned/non-routine load-lifting, e.g. how are requests to lift additional equipment on/off the ship handled, planning processes for lifting mobile plant in/out of bulk cargo holds, etc.
  • Limiting conditions for operation, e.g. weather, non-routine conditions, emergency response considerations, fatigue, shore crane interaction with ship cranes, incident reporting and recording.
  • Minimum air-draught beneath ship loader in all tidal conditions.
  • Precautions on ships and terminals during cargo handling.
  • Ship-to-shore safety checklist and toolbox meetings.
  • Manning and supervision.
  • Safety features installed on quay cranes, such as boom anti-collision system and hoist snag load protection.
  • Whether the ordered cranes have considered, in their specification, the likely future mix of vessels calling at the port.
31 This example illustrates some of the considerations taken into account by Zurich insurance.