The site of the Dali cargo incident has become the largest loss in the history of Protection and Indemnity (P&I) insurance. The reserves for this loss have now surpassed $2.8 billion, and the claims related to it have reached a layer of the international group's insurance structure that has never before been impacted to this extent by a loss.
Losses from the Incident
Gallagher Specialty has announced that the reserve related to the destruction of the Francis Scott Key Bridge in Baltimore, in March 2024, is likely to increase further. This reserve is currently over one billion dollars higher than the previous record related to the sinking of the Costa Concordia cruise ship in 2012.
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Details of the Incident and Its Consequences
A Singapore-flagged container ship lost power in March 2024 and, after colliding with the Key Bridge, claimed the lives of six construction workers and blocked the main shipping channel in Baltimore. This incident has so far led to claims from government entities, infrastructure owners, businesses, and the families of the victims.
The Dali loss has now been transferred to a collective protection of additional insurance policies of the international group, which effectively goes beyond the traditional supplemental coverage programs related to the year of the incident. Estimates suggest that about $300 million of the purchased additional protection remains available, meaning that the ship owners have not yet faced additional costs.
More than two years after the Dali incident, the physical construction of the replacement Francis Scott Key Bridge has finally begun. Teams are creating permanent foundations, constructing a building scaffold over the water, and removing remnants of the old bridge and marine foundations. The replacement bridge will feature a main cable-stayed span of 1,665 feet and approximately 230 feet of vertical height, providing greater separation and protection around the navigation channel. However, the project has become significantly larger and more expensive than initial estimates, with current costs estimated between $4.3 billion and $5.2 billion, and completion now targeted for the end of 2030.
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