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Marine insurance and accidents in the Bahamas

Insurance

Mandatory coverage

What maritime risks must be covered under the law and what is the mandatory level of coverage?

Inland waters risks or any land risks which may be incidental to any sea voyage must be covered by an insurance policy.

Insurable risks and ships

What other risks are typically covered by marine insurance contracts concluded in your jurisdiction and what ships are insurable?

All seaworthy ships are insurable. Even ships which are under construction, being launched or undergoing any adventure analogous to a marine adventure should be covered by a marine insurance policy.

Subrogation rights

What is the legal regime governing marine insurers’ subrogation rights?

In accordance with Section 80 of the Marine Insurance Act:

(1) Where the insurer pays for a total loss, either of the whole, or in the case of goods of any apportionable part, of the subject-matter insured, he thereupon becomes entitled to take over the interest of the assured in whatever may remain of the subject-matter so paid for, and he is hereby subrogated to all the rights and remedies of the assured in and in respect of that subject-matter as from the time of the casualty causing the loss.

(2) Subject to the foregoing provisions, where the insurer pays for a partial loss, he acquires no title to the subject-matter insured, or such part of it as may remain, but he is thereupon subrogated to all rights and remedies of the assured in and in respect of the subject-matter insured as from the time of the casualty causing the loss, in so far as the assured has been indemnified, according to this Act, by such payment for the loss.

Marine accidents

Collision and pollution

What rules and procedures (under both domestic and international law) apply to the prevention of, liability for and remedy of:

(a) Collision?

Collision is governed by:

• the International Regulations for Preventing Collisions at Sea 1972;
• the Merchant Shipping Act;
• the Merchant Shipping (Maritime Claims Limitation of Liability Act);
• the Freeport Harbour Rules;
• the Freeport (Marina and Inland Waterways) Bylaws; and
• the Merchant Shipping (Training, Certification, Manning and Watchkeeping) Regulations.

(b) Oil pollution?

Oil pollution is governed by:

• the International Convention for the Prevention of Pollution from Ships (MARPOL) 73/78 (Annexes I/II, III, IV and V);
• the MARPOL Protocol 97 (Annex VI);
• the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties 1969;
• the International Convention on Oil Pollution Preparedness, Response and Cooperation 1990;
• the Merchant Shipping (Oil Pollution) Act;
• the Merchant Shipping (Oil Pollution) (Indemnification of Shipowners) Regulations;
• the Merchant Shipping (Oil Pollution) Act (Dollar Equivalent) Order;
• the Environmental Health Services Act;
• the Merchant Shipping (Maritime Claims Limitation of Liability) Act; and
• the Freeport (Marina and Inland Waterways) Bylaws.

(c) Other environmental damage caused by a ship?

Other environmental damage caused by ships is governed by:

• the International Convention on the Control of Harmful Anti-fouling Systems on Ships 2001;
• the International Convention for the Control and Management of Ships’ Ballast Water and Sediments 2004;
• the Merchant Shipping Act; and
• the Environmental Health Act.
Salvage

What is the legal regime governing salvage and general average?

The Merchant Shipping Act governs salvage and general average.

Places of refuge

What framework governs access to places of refuge for ships in distress?

The International Maritime Organisation governs access to places of refuge for ships in distress in The Bahamas – namely, Resolution A.949(23) (the Guidelines on Places of Refuge for Ships in Need of Assistance).

In practice, the port controller designates areas of refuge for distressed ships.

Wreck removal

What rules and procedures apply to the removal of wrecks in your jurisdiction?

The Merchant Shipping (Wreck Removal Convention) Regulations and the Nairobi International Convention on the Removal of Wrecks apply to the removal of wrecks in The Bahamas.

According to Section 230 of the Merchant Shipping Act:

1. Where a vessel is sunk, stranded or abandoned in any port under the control of a port authority or in or near any approach thereto, in such manner as in the opinion of the port authority to be, or to be likely to become, an obstruction or danger to navigation, the authority may —
(a) take possession of and raise, remove or destroy the whole or any part of the vessel;

(b) light or buoy the vessel or part until it is raised, removed or destroyed;

(c) sell, in such manner as it thinks fit, the vessel or part when so raised or removed, and also any other property recovered in the exercise of its powers under this section, and out of the proceeds of the sale reimburse itself for the expenses incurred by it in relation thereto under this section, and shall hold the surplus, if any, of the proceeds on deposit for paying to the person establishing his right to it: Provided that such deposit shall be forfeited to the authority unless such person makes his claim within one year of the sale;

(d) if the expenses connected with the raising, removal or destruction of the vessel exceed the value of any property recovered, the excess shall be a debt due to the port authority from the person who was the owner of the vessel at the time when the vessel was sunk, stranded or abandoned.

1. Where a vessel is run aground or stranded, or is found in a dangerous or hazardous condition, in a port under the control of a port authority, or in or near the approaches thereto, and it appears expedient to the port authority to take charge of the operation of refloating or removing the vessel, it may, subject to subsection (3) of this section, appoint an officer to direct such operation, and such officer shall be authorized to do all things which in his opinion are necessary to refloat or remove the vessel, and the master and all persons present belonging to the ship shall obey the direction of such officer and render him such assistance as he may require.
2. An officer to be appointed under subsection (2) of this section shall only be appointed with the approval of the Minister, and such officer may be appointed either generally or in a particular case.

Under what circumstances can the authorities order removal of wreckage?

Where the Port Authority believes that a wrecked, stranded or abandoned vessel is seen to be, or likely to become, an obstruction or danger to navigation, it may order its removal.

Where a vessel is sunk, stranded or abandoned on the coast or on or near any rock, shoal or bank in The Bahamas or any adjacent seas and the minister believes that the vessel is or is likely to become an obstruction or a danger to navigation, they will have the same powers in relation thereto as a port authority.
Source: Callenders & Co

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