ITIC warns professional service providers of rising claims exposure

THE International Transport Intermediaries Club (ITIC) says it has seen an increase in the number of professional indemnity claims made against the professional service providers who are its members. And it warns that the increase is likely to continue as a result of the trend towards privatisation in what have traditionally been public sector-dominated disciplines such as hydrography.

In the latest issue of its newsletter, The Wire, ITIC notes that, over the course of the last few years, the trend has been for former governmental hydrographic organisations to be privatised, joining the existing privately owned companies in the oil & gas and ports & harbours sectors. And it says that, as this trend continues, it is increasingly likely that third parties and contractual partners will attempt to hold such hydrographic service providers liable for losses they may have suffered whilst relying on the services they provide.

Claims can be extensive, and extremely expensive. ITIC refers to the 1983 Swedish Supreme Court decision in the Tsesis, in which a Russian tanker of that name ran aground after striking a rock in Swedish territorial waters which was incorrectly marked on the chart. The court held that the Swedish Hydrographic Office was liable for the consequences, including the damage to the ship. The court also held that, because the chart was defective, this was a defence for the owner to any claim for the clean-up costs of the spillage and any pollution claims.

ITIC Communications Director Adam Jacobson says, “The world is becoming increasingly litigious, and ITIC has seen an ever-increasing volume of professional indemnity claims made against its members, which include maritime professionals such as marine surveyors, naval architects, class societies and a number of hydrographers. In addition to insuring their exposure to liability with a reputable insurer, hydrographers and other service providers should devise best working practice guidelines which should be issued to, and followed by, all staff in order to minimise the likelihood of claims occurring in the first place.

“Also, when entering into a new contract, certain clauses should either be inserted at an early stage or implemented into existing standard trading terms and conditions, for example a clause excluding or limiting liability, or a choice of jurisdiction and governing law clause which could help to reduce or limit potential exposure. Based on the decision in the Tsesis, do not agree to Swedish law if you have the choice.”

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com.

3rd March 2010
ITIC Press Release PR0210