Expert Risk Articles

When a Client Runs Aground

Former Head of Marine Claims in France, Frédéric Denèfle works in the AGCS Paris office. As a marine claims manager he dealt with piracy, crashes at sea and the worst of storms. In this story, as was so often the case, time was of the essence.

8:30 a.m. Paris in the spring. He notes it vaguely. An early morning – like any other morning, thinking of other things: kids, car, that next vacation. At the office now, Frédéric waves to the usual faces. And he walks through the usual routine of coffee and fluorescent lights.

9:00 a.m. Computer on. Kids, car, that... – an urgent e-mail grabs his attention. Awake now. A small cargo ship has run aground outside the port of Taranto in Italy. It's been stuck now for three or four hours. The report reads: "It cannot get out on its own power."

But it's not that simple either: the vessel is stuck in a commercial mussel bed. If there is any damage to the mussels, there is more than a hull damage or any loss-of-hire due to late deliveries: the indemnity would be huge. The ship has to get out ASAP.

9:02 a.m. Several things need to happen within the next 60 minutes. Step one, however, is to look at the insurance policy and make sure he is the right person to act: yes, indeed. Bureaucratic as that sounds, this is essential. There is nothing worse than having several people running around trying to solve the same problem.

His next step is to check nautical charts. Where is the vessel exactly? Uh-oh. It is then that the claims manager realizes how serious the mussel bed issue is.

It's a major farm that several local fishermen depend on. But he also finds out other key information such as the general geographical situation of the seabed, the currents, the harbor formation and underwater installations like pipes.

Instantly he reaches for his phone and dials up his local surveyor. In the marine insurance business, clients' vessels sail all the seven seas. The only way to service them is with this global network of surveyors, agents who know the language, know the area, know the authorities, know who to get in touch with.

"Hi, this is Frédéric ... Yes ... Yes, run aground ... a serious third-party issue with a mussel field. And we urgently need a tugboat. What's out there?"

10:00 a.m. The surveyor has called back, "Frédéric? I have a tug owner and a lawyer for you to work with. She is excellent. She'll negotiate with the tug owner, and she's arranging a meeting with the mussel farmers. Perfect."

In the meantime, he has also activated two further colleagues, master mariners who work at Allianz as risk engineers. They know the sea and bring in their nautical expertise. Their exports are coming in now. They list all the potential exposures as well as numerous things to bear in mind.

Chief among their concerns is the tide: Once it ebbs, the ship will sink further and crush large sections of the mussel field. The ship will also start to lay on its side, damaging the hull – maybe even puncturing it, a worst-case scenario. The tide is still rising, however, which would be advantageous for the tugboat.


No trivial matter: the lives of many fishermen depend on mussel beds.

11:00 a.m. OK. Time to assess the situation. Frédéric has been doing this job for some 20 years, and the one lesson he has learned is keeping a clear head. Who is now involved, what is there to do, and who is doing what?

The surveyor is his eyes and ears, his chief mediator and a person he needs to be able to depend upon. The master mariner risk managers are compiling further data and keeping a close eye on the tide. The lawyer has started her meetings and phone calls. Right now she’s working to calm down all the third parties involved: the authorities, other ships and the mussel farmers.

What really calms them is knowing that Allianz is involved: "A comfort," thinks Frédéric, "a comfort for me to know that the local people have a name they can trust." The lawyer is also talking with the tug owner. He has his own issues. He wants security, a contract and various other assurances.

Fortunately, there is a nearby tugboat at all. That's not always the case. If there was no suitable tugboat nearby Frédéric would have to get one from farther away through a Lloyd’s open contract. That would not only take more time but also be more expensive and would mean complicated negotiations later.

12:00 noon A hurried lunch break. Frédéric, coffee, snack, desk, telephone. Still negotiating, calming, assuring and coordinating. It is getting tense. "I've seen these things go bad," he thinks. There is no reason why anything must go wrong, but there are a lot of mistakes you can make.

The authorities and fishermen seem quiet for the moment. That's not his concern. It’s the tug that's getting all his attention now. Why is this taking so long?

The tugboat is a crucial part of this kind of situation. It needs to be the right size and strong enough to tow a stranded vessel. This is where a bad situation can be made much worse, like someone putting out a fire with the wrong extinguisher.

He recalls that fishing boat a few years ago... what was it's name? It was with several other trawlers lined up and linked to the same net, a kind of fishing the French call pêche en boeuf – "fishing like cattle."

There the herd was, and one of their number had run aground. Fishermen feel self-sufficient, so instead of calling a tug, another boat in the group tried to help by towing it with a rope. A bad idea that became a disaster. When the boat that was "helping" ran aground as well, the hulls and engines of both boats were damaged. "They know the sea, but they don’t know physics," he muses.

1:00 p.m. Still negotiating with the tug owner.

2:00 p.m. Still negotiating with the tug owner. The tide is reaching its maximum level.

3:00 p.m. At last, at last, the deal is done. He breathes a sigh of relief. The tugboat is on its way. Meanwhile, Frédéric can begin to settle other issues through the lawyer on the scene.

Now that he knows when the boat is being towed out of the mussel field, he and his surveyor can signal the other parties involved. The time gives a limit, an expectation of the scope of the damage caused. This is also reassuring. Now everyone knows when the emergency will be past.


Tugboats are a critical piece of infrastructure in an emergency.

5:00 p.m. The tugboat has arrived. It's tethered to the cargo ship. And it's moving forward. The tide is still in their favor. It's lifted the ship, and it's flowing away from the mussel bed. Soon the stranded ship will be in harbor.

The end of the day is drawing near, and things look calm again – or calm enough. Thank goodness for the surveyor, and for the lawyer in his network.

"That's it," Frédéric thinks, "I might never have to deal with an issue in Taranto again, but if I do, or wherever else an emergency comes up, I know I can rely on someone to be there."

Still a couple hours of wrapping up paper work and formalizing all the different agreements made that day ahead. Then, into the night: kids, car, that next vacation.

Download "Global Risk Dialogue" fall 2009 (3 MB)

  1. Expert Commentary

    The skill of the claims handler and network of the marine insurer come to the fore when time is of the essence in the grounding of a vessel. It requires prompt action to achieve a successful salvage while minimizing the impact on the environment and third parties.

    Having an experienced claims handler who has the ability to map out a plan of attack and think on their feet as matters develop is the key. Also having a network of experienced marine claims staff to call on for advice or possibly even take over management of the claim is a distinct advantage.

    One major difficulty is that the situation will often require delicate negotiations with a number of competing interests. They often know that there are very few alternatives to call on and can be rather mercenary in their approach. The claims handler therefore needs to have access to a network of people with a range of skills to call on to assist in either negotiations or connections to a variety of capable service providers.

    This article highlights how critical it is to have access to people who know what they are doing and are suitably empowered to make decisions on the run as the status of the vessel and weather conditions will change rapidly. These aspects should be critical considerations for clients and brokers alike when selecting a marine hull insurer.

    /assets/Global%20offices%20assets/Australia/RonJohnson_106x70.jpg Ron Johnson

    Ron has spent his entire career of over 40 years in general insurance, primarily in the marine insurance field. He came to AGCS in 2009 as Regional Manager of Marine, Asia-Pacific. He holds a Bachelor of Business degree with a double major in Law and Accounting. Ron works in the Melbourne office.