Every passenger in the ill-starred Princess of the Stars was insured for P200,000 under a group accident policy. Will paying this amount wipe away all of Sulpicio Lines’ liabilities for a passenger’s death, especially if the Board of Marine Inquiry rules that Sulpicio was negligent?

I do not think so.

The passenger’s kin had better be careful when he signs the claim release. This paper should refer to the accident policy only. It should not free Sulpicio of any and all other liabilities. The kin’s lawyer should guard against this.

By the way, how about the survivors? How much will Sulpicio pay them? And, how about the crew and their kin?

Even if the liabilities for passengers and crew are settled, Sulpicio could have huge problems with the cargo owners and their insurers.

For example, Del Monte says its pesticides were supposed to have been shipped in another vessel. Del Monte’s insurers will surely pay the loss but may want to recover it from Sulpicio.

The insurance policy that could have covered all of Sulpicio’s liabilities is Protection and Indemnity. P&I covers every conceivable liability. It covers unlimited liability to passengers and crew (including loss of wages). Personal injury and property damage to third parties are covered.

If the ship rams a pier or another vessel, that is covered in full. If a vessel is diverted from its intended course because of mechanical trouble, the extra expense is recoverable from the P&I policy.

Of course, a P&I cover is expensive. But a prudent ship owner pays it because it is far, far more expensive to carry those liability risks all by yourself, as Sulpicio has surely realized by now.

But Sulpicio does not have a P&I cover on the Princess of the Stars and the rest of the fleet.

It is easy to see why.

Sulpicio had to apply to enter a ship(s) into the P&I Club, a London-based cooperative enterprise of ship owners worldwide. A basic requirement is: the ship has to pass the rigid rules of a so-called classification society.

There are about nine such societies, with branch offices in Manila. I know the names of only three, Lloyd’s Register of Shipping, American Bureau of Shipping and Bureau Veritas.

A society has to approve the plans of a ship to be built. It supervises the construction. Then, the hull and machinery are “classed.” This classification has to be maintained though the life of the ship to keep its membership in the P&I Club.

Apparently, none of the Sulpicio fleet is classed and has ever been entered into the P&I club. And even if the fleet qualified for membership, the P&I Club would have thrown out Sulpicio a long time ago because of its terrible loss experience over the past 20 years or so.

I suggest a congressional commission be organized to draw up a list of improvements to our maritime laws.

Surely, the Maritime Industry Authority and the Philippine Coast Guard should be strengthened.

Above all, the public has to be protected. If the owner of a tricycle is required by law to put up a Compulsory Third Party Liability policy before being granted a license to operate on our dirt roads in the most distant villages, why should not Sulpicio Lines and the rest of the shipping industry plying our inter-island seas be required to qualify for membership in a P&I Club before being granted a license?

Previous columns:
Waging war against soaring prices – 6/25/08
Vice President Noli’s ad campaign – 6/18/08
Winston Garcia’s housekeeping chores – 6/11/08
Meralco’s systems loss – 6/04/08
Open memo to Secretary Atienza – 5/28/08