IG Clubs to provide abandonment cover in line with MLC

The International Group of Protection and Indemnity Clubs (IG) highlighted the importance of a Group-wide agreement to provide financial security for shipowners for the consequences of abandonment of crew.

The details of the impact of the 2014 MLC amendments regarding seafarer liability and compensation was discussed at length during a dedicated ‘People Risks’ panel-session at the International Group of P&I Cubs Correspondents Conference, currently underway at the QEII Centre in London.

Since 18 January 2017, ships that are covered by the duties and obligations set out in the ILO’s 2006 Maritime Labour Convention (MLC), as amended, have been required to maintain financial security for specific liabilities to crew members in the event of their abandonment. In order to meet this requirement, IG Clubs have agreed to provide the certification required under the Convention and have arranged reinsurance cover which provides in total USD200 million MLC abandonment cover.

This IG MLC reinsurance arrangement has been developed to ensure that shipowners can demonstrate compliance with the requirements of the 2014 amendment to the MLC, requiring vessel owners to maintain financial security for the cost and expense of crew repatriation in cases of seafarer abandonment, including liability for up to four months’ arrears of wages and entitlements. A separate financial security certificate is required for contractual claims arising from seafarer personal injury, disability or death (MLC Standard A4.2, as amended).

    “The collective agreement developed by IG and provided through its member clubs offers a boon to owners on MLC amendments, which could otherwise have proven very costly. But of course, addressing the issue of abandonment is not purely financial. It is about providing support to crews when they need it most – ensuring that they have access to food and water, fuel and medical supplies while they are awaiting repatriation; working to secure visas and repatriation travel, and paying unpaid wages,” explained Jonathan Hare, Senior Vice President and General Counsel of Skuld Club.