Vessel pollution insurance provides coverage for vessel owners and operators in the event of an oil spill. However, before offering coverage, many insurance companies require clients to demonstrate that they have the proper safety protocols in place to prevent and respond to oil spills. In some cases, this may refer to emergency response plans and drills, and in others, it might involve safety certifications and training.
To help make sense of it all, we’ve answered some frequently asked questions regarding vessel pollution insurance and safety requirements and recommendations below.
Do vessel insurance policies require clients to have emergency response plans in place?
Yes, many vessel pollution insurance policies require clients to have emergency response plans (ERP) to receive coverage because it confirms the vessel is compliant with regulatory requirements and that the crew understands how to prevent, minimize, and respond to pollution risks.
But it’s not just an insurance requirement—many maritime regulatory authorities require an approved ERP for certain vessels to operate in the first place. For instance, the United States Coast Guard requires vessels carrying certain chemicals and/or refined petroleum products to have a vessel response plan (VRP) onboard, which is an ERP that outlines steps to follow in the event of an oil spill.
Should clients be conducting emergency response drills?
Yes, not only is it a good practice for clients to conduct emergency response drills, but it’s also required by regulatory agencies.
The National Preparedness for Response Exercise Program (PREP) provides guidelines for conducting an exercise program, also known as spill drills, that complies with contingency planning requirements addressed in the Oil Pollution Act of 1990.
Spill drills help ensure adequate response preparedness, as they involve training crew members, testing equipment, and researching response technology. By conducting these emergency response drills, vessels are more equipped to handle and respond to emergencies, helping them minimize their environmental and financial impacts.
Should clients be keeping records of pollution prevention measures, incident reports, and any actions taken to mitigate risks?
Yes, clients should keep records of pollution measures, incident reports, and actions taken to mitigate risks. Many vessel insurance policies require clients to maintain these records that document their efforts to prevent and address risks. In fact, the vessel’s ERP should include record-keeping requirements, as they help hold vessels accountable and maintain environmental protection efforts.
Again, while many insurance companies make this kind of documentation mandatory, regulatory agencies require it, too. In some cases, regulatory agencies may even hold inspections to review the vessel’s record—if the vessel fails to comply with the appropriate documentation of preventive measures and incident reports, it could face penalties, fines, and sanctions.
Are there any training or certification requirements that clients need to fulfill to maintain coverage?
Yes, some vessel pollution policies may require training or certification requirements for clients to maintain coverage. Depending on the kind of vessel and where it operates, the client may need an Oil Pollution Prevention Certificate (OPPC), along with proof of training in areas like oil pollution prevention, hazardous materials handling, and emergency and spill responses.
Insurance companies like to see vessels complete training because it demonstrates that they’re taking the initiative to manage risks and exposures.
Do clients need to verify that their crew’s training and certifications are up-to-date and comply with the requirements?
Yes, oftentimes, clients need to verify their crew’s training and certifications are up-to-date and compliant with regulatory requirements. This helps ensure the crew has the current skills and knowledge to handle emergency situations, particularly as technology and practices evolve over time.
These safety parameters are put in place to help improve risk management, enhance emergency responses, and protect the marine environment. To learn more about vessel pollution insurance and the necessary safety requirements, contact Falvey Insurance Group today.
