What Insurance Does
Too often in discussions of this industry, we focus on fear and the negative. What if this or that were to happen? Why do I pay so much premium? There are so many things to worry about, etc.
It’s not often enough that we talk about how well insurance does its job. In the case of the raising of the Costa Concordia, the ocean liner that wrecked off the Tuscan coast in January of 2012, we have a story showing what insurance does so well.
Hull insurance on the vessel is already paid off, and we’re talking about a $500 million payment there.
Now, insurance is underpinning the recovery of the vessel, the largest marine wreck removal project in history. Costs on the removal project could run another $1 billion.
The Costa Concordia ran aground in environmentally sensitive waters. The Italian government wants the ship removed intact, so that environmental damage is minimal. It also wants it removed as quickly as possible.
That pressure to get the wreck off the reef first is adding much more cost to the project. But you won’t hear insurers complaining about that, at least not publicly.
What we do hear in our story is that the recovery company’s risk manager believes that it is his insurance program that makes the difference. Confidence in his program allows him to successfully compete against other bidders and to perform his work without fear.
That’s the little-discussed or publicized side of insurance that bears repeating.