Insurers put up initial $25 mln for Spain oil spill
Date: 22-Nov-02
Country: UK
Chief Executive of A. Bilbrough & Co, Paul Hinton, who manages the London Protection and Indemnity Club insurance portfolio, told Reuters: "It looks like it is something of that order."
The ship's liability insurer is the London Steamship Owners' Mutual Association, a Protection and Indemnity, or P&I club, as it is known in the shipping industry. Such clubs insure 90 percent of the world's ships.
Hinton said the payment would be made on a "no fault" basis which means the sum would be paid automatically under what is known as the Civil Liability Convention.
A second big oil slick was forming around the wreck of the Prestige this week, threatening Spain's northwest coast with further environmental devastation a week after the tanker first got into difficulty.
It took some 60,000 tonnes of viscous fuel oil to the bottom of the Atlantic when it finally broke up on Tuesday.
Already blackened by a first spill over the past week, the Spanish shoreline faces what may be one of the world's worst ever incidents of oil pollution.
Hinton said a much larger tranche of compensation - up to $180 million - would later be made available through the International Oil Pollution Compensation Fund (IOPC).
Hinton said in smaller compensation cases the ship's owner through its insurer provides the first layer of compensation, but for much larger claims and spills the IOPC Fund kicks in.
"The ship owner and the Fund normally set up an office to receive claims and that involves us and then we try to find ways of providing some kind of early relief to those poor people who suffer from the spill," he told Reuters.
"The P&I Club's involvement is in accordance with these international conventions...Our layer of it is the first layer then the Fund comes in after that."
