The damage in the wake of Baltimore’s Francis Scott Key Bridge collapse could cost insurers up to $4 billion, setting a record as the largest marine insurance loss ever. The bridge collapsed into the Patapsco River on March 26, 2024, after the Dali container ship, owned by Singapore-based Grace Ocean Private Ltd., hit a supporting column. Moments before the crash the crew issued a mayday call, stating they had lost power. A “standard examination” conducted by the U.S. Coast Guard in New York in September didn’t identify any deficiencies. The mayday call allowed officials to stop traffic on the bridge saving many lives, but eight construction workers were on the bridge when it collapsed. Two of the workers were rescued and all ship crew members were reported safe without injury. The crew members will remain onboard the ship to monitor its status unless the ship starts to sink and needs to be towed inland.

The debris has blocked the shipping lanes of the river and the Port of Baltimore has been closed indefinitely. Economic analyst groups predict Maryland could see a loss of $28 million a month due to the port closure, as it is one of the busiest ports on the east coast of the US. The disaster will also likely put pressure on marine insurance rates globally. President Biden said he expects the federal government to pay the cost of rebuilding the bridge before liability is established. The cost to rebuild has been estimated by experts to cost at least $400 million.

Most of the business interruption losses, which will be significant, will likely not be recoverable from the ship itself. Lawsuits may be limited to damage to the bridge itself and injuries, death, and property damage from people directly involved in the collapse. US Supreme Court precedent will likely protect the ships’ owners and operators from being held liable for purely economic damages resulting from the maritime incident. The Dali’s owner and manager, Synergy Marine Pte Ltd., jointly filed a limitation of liability petition to cap their liability at around $43.6 million. The filing estimates the value of the ship is up to $90 million carrying $1.1 million in income from the freight.

The Dali was insured under Britannia P&I Club. Protection and indemnity (P&I) clubs allow shipowners to pool risk and losses to provide liability cover. These clubs are then backed by many reinsurers. Approximately 80 different reinsurers provide around $3 billion in coverage for the Dali and will share in the losses caused by this tragedy. The US Department of Transportation approved $60 million in emergency relief funding for the state of Maryland to aid in starting the recovery and rebuild process. While that process is underway, it will take months, if not years, for the bridge to be fully repaired.