Kent Stewart, Executive Director, Maritime Engineers outlines Marine Warranty surveys at the AIMS Conference, Hobart.

DEFINITION

Marine Warranty is an undertaking or a warrant by an independent third party that a marine venture is a sound insurable insurable risk.

The Marine Warranty Surveyor provides an opinion on the level of risk that Underwriters are being exposed to. This opinion is based largely on the skill and experience of the surveyor, his knowledge of the rules and guidelines and his ability to make a valued judgement of the marine venture he is warranting.

Warranties can be express or implied.

Express warranties are written into contracts of insurance and are specific for a particular voyage. Implied warranties are becoming more prevalent, particular in the oil and gas industry where the client seeks the assurance that an experienced third party has closely examined his marine activity for risk.

RISK

Marine Warranty is all about risk assessment. Insurers or their clients want the assurance that an experienced third party has closely examined the proposed voyage and ensured that, outside normal Perils of the Sea, the venture is sound.

In the oil and gas industry increasingly the implied risk marine warranty surveys are on the increase. This is a second or third tier of risk mitigation that the oil industry has introduced over and above the conventional acceptance criteria that a ship is “Classed”.

There is no question that the oil and gas industry is a high-risk activity. And innovation and the speed of development continually dazzle us. It also leaves underwriters struggling with the exposure on the risk they are covering.

And oil companies themselves want to mitigate risk and to that end they will engage a Marine Warranty Surveyor to examine their proposed project. Be float-over topside installations or multimillion dollar module cargoes, they can’t afford any delays to their programs from accidents. The cost penalties are massive.

There’s an old saying:

“If you think safety is expensive try having an accident”.

EXPOSURE

It’s all about cargo – its size, its value and strategic importance to a project. Usually its project cargo tows but sometimes it’s vessels that need Marine Warranty Surveys.

Disabled ships, low freeboard backhoe dredges, crane barges and pipe layers are all high risk tows.

Then there are the unusual – CALM buoys, SPARS and concrete substructures.

Certainly ocean towing is probably the most common activity that calls for Marine Warranty, particularly with the surge of towing the project cargoes in the oil and gas industry over the last 5 to 6 years.

But Marine Warranty is not only conducted on tows. They are conducted on high-value/high-volume heavy lifts, tows of disabled ships, relocation of oil industry plant (FPSO’s, MODU’s) and low freeboard tows.
 

THE SURVEYOR

So it’s a very diverse activity and the Marine Warranty Surveyor needs to be a person with special skills and a wide range of knowledge, experience and expertise. Qualifications alone don’t do it.

The nature of Marine Warranty work requires the Marine Warranty Surveyor to be extremely well organised and his preparation for the job is very detailed.

With the criticality of timing on cargo loadings and departures the Marine Warranty Surveyor’s timing must also be a skill he possesses.

Forwarding Towing Checklists to towing contractors is one method of ensuring that preparations have been properly made without any last-minute disruptions. And the reverse applies.

When working with heavy lift contractors is like Big Lift, SAL and Hansa, these professional heavy lift specialists will produce detailed Loading Manuals which the Marine Warranty Surveyor can review well before the ship arrives and allow him time to comment on them. This material forms part of all the forward planning that goes into a successful warranty survey.
  

APPOINTMENT

Marine Warranty Surveys are commissioned by the client be it the insurer or the assured himself. But he is there to safeguard the insurer’s interests. Often his fees are paid by the assured. So the Marine Warranty Surveyor has to have good interpersonal skills and can collaborate well with the marine contractor and the assured to achieve the best outcome.

The Marine Warranty Surveyor doesn’t have any contractual ties to the marine contractor nor does he have the authority to direct the contractor in any way. His obligation is to his clients who can then direct the contractor to make any changes necessary. We never want to get to a situation with a Certificate of Marine Warranty is withheld to achieve an outcome. So preparation and timing is critical to the success of the survey.

ON THE JOB

But on the job the Marine Warranty Surveyor needs to be armed with a vast range of knowledge, skills and Rules of Thumb.

Things like:

Even road transport can form part of a Marine Warranty Contract.

Not only does he come with these qualities, he comes armed with his standard tools of trade (camera, torch, tape, chalk, verniers, notebook etc.)

The professional warranty surveyor is examining every aspect of the marine venture from top to bottom including:

To name a few.

CLOSING

So the Marine Warranty Surveyor is a special type of surveyor who comes with a lot of experience and a lot of skills. By gaining the confidence of the marine contractor the Marine Warranty Surveyor can achieve far more for the underwriter and his assured client in the short time available if he is well is prepared beforehand.

So leading onto other discussions in this conference program: 

“Where does a Marine Warranty Surveyor gain these skills?”