NewsKey Bridge Collapse


Insights into Dali insurance payouts, possible criminal charges

Posted at 6:27 PM, Jun 04, 2024

BALTIMORE, Md. — It's been consistently the number one question we've heard since the clean-up began, and talk of replacing the Key Bridge heated up: who is paying for all this?

The short answer is - the federal government, and thus the taxpayers, for now. And the ship’s insurance companies later. But how much, and when, they end up paying is going to take a lot longer to answer.

"I think that the easiest way to put it is- years,” Sean Pribyl, a D.C. attorney who practices maritime law at Holland & Knight.

Pribyl was also a lawyer for the Coast Guard, and worked for the world’s largest protection & indemnity (P&I) club.

He wasn’t surprised when the owner and manager of the Dali cargo ship filed a petition in court, invoking the “Limitation of Liability Act,” days after the ship crashed into the Key Bridge. Dating back to 1851, it’s often called the “Titanic” law after it was successfully used to lessen that ship owner’s losses back in 1912.

Pribyl explains why the law was written in the first place: "In the U.S. this was seen as a means by which to induce more U.S. shipbuilding, to make the U.S. more competitive. It was really seen as unfair to shipowners that they would have to bear the entire loss of a vessel."

Now, the companies responsible for the Dali - Grace Ocean and Synergy Marine,are using it to ask the court to limit their liability to $43 million, a price tag they acknowledge in court filings is "substantially less" than what's needed to cover the losses associated with the collapse.

They'll have to prove the crash wasn't due to negligence, an assertion they've already made.

The City of Baltimore wants to prove the opposite, and have the Dali's owners pay for essentially everything. Below is the list of damages in thecity's lawsuit - from the replacement of the bridge, to the debris removal, the interruption to transportation, and everything in between.

"Lloyd's of London indicates this could be the most expensive maritime tragedy in the history of the United States," Governor Moore said in an interview outside the White House last week, after meeting with President Biden to discuss federal funding.

No matter how much the ship's insurer has to cough up, it won't be shouldered by just one company. A unique aspect of the maritime industry is the pooling of risk. 90% of the liability cover for ocean-going ships is shared by just 12 companies, which make up The International Group of P&I Clubs. The Dali is insured by the Brittania Group, which will share the cost with the others.

"Ship owners were concerned that the loss of their single ship would essentially bankrupt them. They were looking for a way to invest in shipping with some additional security," Pribyl said, explaining why the pooling of risk exists in the maritime industry.

Payment is just one way of holding the shipping companies accountable, which both Governor Moore and President Biden have pledged to do.

There could also be criminal charges. The FBI launched an investigation into the incident in mid-April.

Because there was loss of life, Pribyl says investigators may be looking at something called the 'Seaman's Manslaughter Statute.'

"That is a statute that criminalizes essentially causing the death of individuals. It applies widely to those that may have caused that; very low standard to meet that."

The law applies to anyone on board the ship, and sometimes beyond - to the companies in charge.

"I'd expect that they're casting a wide net. These are early days, so they're probably exploring other potential criminal charges," Pribyl said of the investigators.

He said the FBI is likely still in the evidence-gathering stage on board the ship, and that's why the crew hasn't been cleared to disembark yet.

"This is one of the criticisms of the U.S. when it comes to criminal investigations - not just in marine casualties but in environmental crimes, where they will keep crews for months or a year, if not more. [...] "The simplest answer is - they will likely keep them until they're no longer needed for the investigation."

Whatever the FBI uncovers could play a role in the litigation and ultimately how much money the Dali's insurer owes.

On Friday, WMAR-2 News learned the MDTA is expecting to receive a $350 million dollar payout from Chubb - the company that insured the Key Bridge - within the next 45 days. An MDTA spokesperson says "These insurance proceeds, federal funding and other reimbursements will bring a variety of resources toward the rebuild and recovery effort."