Insurance implications of MLC

The convention will impose certain responsibilities on ship owners and employers of seafarers including the need for a financial guarantee for repatriation of the crew.

As of 12 June, states having ratified the convention include Antigue & Barbuda, Bahamas,

Cyprus, Denmark, Greece, Kiribati, Liberia, Malta, Marshall Islands, Norway, Singapore, Spain, Sweden, Switzerland, St. Kitts & Nevis, St. Vincent & Grenadines, Tuvalu, and the UK.

Under MLC, there are provisions for conditions of employment to ensure that ship owners and employers of seafarers carry the burden of repatriation costs.

Under the regulations seafarers have a right to be repatriated at no cost to themselves in the circumstances and under the conditions specified in the Code. Each Member shall require ships that fly its flag to provide financial security to ensure that seafarers are duly repatriated in accordance with the Code.

Repatriation resulting from illness, injury, death or shipwreck would usually be covered under a ship owner’s P&I policy. However, repatriation under any other circumstances would not be covered.

The P&I market is responding to the needs of ship owners under MLC, and is agreeing in the most part to cover repatriation for any reason, but only as far as a Certificate of Entry is enough to provide cover to Flag State. This does not constitute a form of financial security. There would also be no cover for P&I entries which exclude crew liabiblity.

Potentially, there is a conflict of interest in providing this cover via the P&I market.

MLC is applicable to all vessels performing international voyages, including those working outside of state territorial waters, as well as vessels over 500gt.