How much was Titanic insured for? what was the pay-out?
$10m apparently
that’s a very interesting article - thanks!
Well, now we have controversy. According to Willis, the H&M payout was only £1m. I would trust Willis, the actual brokers, ahead of some newspaper in Denver. But it seems the total payout was £16m presumably the rest being liability claims.
Now you think that article was interesting? Here’s a better story. White Star Line’s usual P&I insurer (ie liability insurer) was Liverpool and London Steamship P&I Association. Anyway, someone at White Star Line kinda forgot to enter the Titanic with L&L before her maiden voyage. Oops. But L&L agreed after the sinking to accept the Titanic as having been on risk and paid out on White Star’s liabilities anyway. Phew. Of course the fact that the chairman of L&L was also the chairman of White Star at the time might have helped…
L&L went bust in 1999 and was swallowed up by North of England P&I, in Newcastle. They have a lot of letters and memorabilia from Titanic in their offices.
But enough about the damn Titanicalready 
Yes, but that £1 million payout converted to about $5 million. From the US Senate inquiry, “The vessel, fully equipped, cost £1,500,000 sterling, or about $7,500,000. At the time of the accident the vessel carried insurance of £1,000,000 sterling or about $5,000,000, the remaining risk being carried by the company’s insurance fund.”
Exchange rate a bit different back then, I see. However, the Denver newspaper story would still appear to be substantially inaccurate.
A good friend of mine used to work for the L&L - including during the run-off. They did **not **go bust - the structure of a mutual Club within International Group means it cannot go bust before the last of it’s members goes bust. They did decide to discontinue operations and go into run-off though with the current membership being transferred into the North of England.
White Star had a fleet entry with the L&L, the fact (if true) that the Titanic was not formally declared entered is not as big a deal as it sounds. The Omnibus Rule is there to take care of those sort of situations - the purpose of the P&I Club as a mutual is to best serve the interests of it’s members. I am sure most members would have been happy to know it was sorted out after the event as “with the grace of god go I”.
The London insurance market had a fine history of “my word is my bond” which is sadly largely history now. I recall when Piper Alpha blew up six days after Occidentals renewal date, much of the syndicate reinsurance within Lloyds was incomplete or scratched in pencil draft only but that was all sorted out after the event too without anyone externally being any the wiser.
karpov do you do something insurancey that would make a good “ask the” thread?
Well, yes I guess I could.
Originally a geologist on the rigs, since worked in risk management for an oil major, as a broker at Lloyds of London and more recently for a reinsurance company but always oil & gas insurance.
About to go on vacation - maybe when I get back. Do you really think it would be of any interest? Generally if anyone knows what I do they just want to talk about the car insurance renewal…
You are right that technically L&L didn’t go “bust” but the practical difference between that and reaching the point where you have to sell out for a minimal sum is a fine one.
There was no legal obligation on L&L to accept claims on the Titanic. A fleet entry is only legally binding for ships in the fleet that are entered. As I understand it, L&L agreed to accept a backdated entry and did not use the omnibus rule. I am not sure that the omnibus rule can be used for risks incidental to shipowning that don’t arise from an entered ship. Hard to say on that one given the secrecy surrounding the exercise of the omnibus rule.
No argument with you there but whilst there might have been no “legal” obligation if an owner enters all his vessels without exception with one club (as opposed to a split entry) as White Star did with their fleet into L&L it would not be that much of a jump to accept that it would/should/was intended to be declared formally.
You might be correct re the Omnibus Rule, I don’t have an IGA Club rulebook handy right now but I always thought the Omnibus Rule was wider than just applicable to properly entered vessels, perhaps to allow for this type of situation. It is certainly used very widely as to it’s scope at times.
Are you still working in Marine Insurance, Princhester?
Not that much of a jump for those who don’t work in P&I, quite a jump for people who aren’t familiar with its congenial ways. That’s why it makes such a good story. I have an IGA club handbook handy (as do you, given that you have the internet;)) but the rule is ambiguous. Hazelwood’s book on P&I says only entered vessels but the text of the rule doesn’t make that clear.
Yes, still slaving away.
Gosh - they have their rule books on the internet now? Wow - P&I has changed (although I am sure it is still congenial in it’s ways)…
I used to be responsible for my employers fleet insurance, including the P&I, back when I was a risk manager for one of the oil majors. In the days when they actually owned their own fleet!
Regret have not been involved in P&I for over 12 years now. Almost pre-internet 