270 Shipping Lines Abandon Insurance

270 Shipping Lines Abandon Insurance

JAKARTA – Indonesian National Shipowners Association (INSA) predicted around 270 shipping lines or 10% of the total 2,700 shipping lines operated in Indonesia still abandon the insurance for their vessels and loads.

INSA Chairwoman, Carmelita Hartoto, said most of shipping lines still abandoning insurance are operated in local areas.

Therefore, she stated her office is ready to fully support and to assist INSA’s members to have insurance based on Transportation Ministry’s regulation.

Per March 1^st 2015, the ministry will require vessel owners to insurance vessel frame dismissal and compensation protection.

According to her, the obligation is similar with the regulation made by port operators which are only allowed to be berthed by the vessels having insurance. The regulation, she added, is the realization of transportation player’s spirit to improve safety.

“We facilitate it but many insurance firms intending to directly visit vessel owners,’ she said on Sunday (2/1).

Prior to that, Transportation Ministry has sent a letter to INSA to ask vessel owners having motor vessels over 35-GT capacity to insurance their vessels with vessel dismissal insurance and compensation implemented starting from March 1^st 2015.

The regulation is stated on letter AL.801/1/2 Phb 2014 about the obligation to insurance vessels with vessel dismissal insurance and/or protection and compensation.

The letter stated Transportation Ministry also gives administrative sanction to vessel owners who do not insurance their vessels such as warning, permit suspension, and permit termination.

The new regulation refers to Article 203 Clause 950 law No. 17/2008 about shipping, Article 119 of Governmental Regulation (PP) No. 5/2010 about navigation, and Article 18 of Transportation Minister Regulation No. PM 71/2013 about salvage and/or underwater projects.

Carmelita said the obligation to insurance vessels with vessel dismissal insurance will not increase shipping tariffs.

So far, such insurance has been included in vessel operational cost adding shipping cost.

“Shipping cost should not be increased since it has been included in operational cost,” he said.

Profitable

Lolok Sudjatmiko, INSA Deputy Chairman, added the regulation related to insurance actually gives profit for vessel employers since it will lower vessel operational risk.

According to him, the regulation will also guarantee safer shipping route since countless shipwrecks are located on shipping route.

However, Lolok reminded insurance brokers not to make the regulation as a method to seek much profit without respecting claim ease for service users especially vessel owners who are not accustomed to vessel claim process.

“However, in Indonesia, many people utilize something without respecting the claim,” he said.

Therefore, he asked the regulation to be socialized massively by INSA, Transportation Ministry, and vessel insurance brokers.

In the socialization, all stakeholders must give comprehensive information.

With the effort, he said, vessel owners will have sufficient information to make insurance or to claim for insurance. “It needs to be utilized by implementing this regulation as well as possible and not seeking profit,” he added. (Bisnis Indonesia)