SRCC Risks – Marine Insurance

In marine insurance, SRCC risks refer to the risks of loss or damage to ships or cargo caused by strikes, riots, civil commotions, and other political or social unrest. These risks are typically covered under a specific clause in marine insurance policies, often referred to as the “Strikes, Riots, Civil Commotions and Malicious Damage (SRCC)” clause.

Here’s a breakdown of SRCC risks in marine insurance

• Covered Risks: The SRCC clause typically covers losses caused by:
  • Strikes: Including strikes by dockworkers, port workers, or crew members.
  • Riots and Civil Commotions: Violent disturbances, protests, and public disorder that may affect the vessel or its cargo.
  • Malicious Damage: Intentional damage to the ship or cargo caused by malicious acts, vandalism, or sabotage.
  • Terrorism: May also include coverage for terrorism-related losses, although this may be subject to specific exclusions or limitations.
• Types of Losses Covered:
  • Physical Damage: Damage to the ship or cargo caused by covered events.
  • Loss of Hire: Loss of income due to the vessel being unable to operate because of a covered event.
  • Additional Expenses: Extra expenses incurred due to a covered event, such as salvage costs or the cost of rerouting the vessel.
  • Liability: May also cover liability for damage or injury to third parties caused by a covered event.
• Exclusions: The SRCC clause may have exclusions for certain types of losses or events, such as:
  • War risks: Damage caused by war or hostilities.
  • Nuclear risks: Damage caused by nuclear incidents.
  • Delay: Losses due to delays caused by covered events, unless specifically covered by the policy.
  • Inherent vice: Loss or damage due to the inherent nature of the cargo.

Importance in Marine Insurance

• Global Trade: SRCC risks are particularly relevant in marine insurance due to the international nature of shipping and the potential for vessels and cargo to be exposed to political instability, social unrest, or labor disputes in various parts of the world.
• Risk Management: The SRCC clause provides a crucial risk management tool for shipowners and cargo owners, protecting them from the financial consequences of these unpredictable events.
• Peace of Mind: It offers peace of mind knowing that their assets are protected from losses caused by strikes, riots, civil commotions, and other political or social unrest.

Example

A cargo ship is delayed in a port due to a strike by dockworkers. The SRCC clause in the marine insurance policy would cover the loss of hire (income) incurred by the shipowner due to the delay.

Global Perspective

SRCC coverage is a standard feature in marine insurance policies worldwide, providing protection against the risks associated with political and social instability. The specific terms and conditions of the SRCC clause may vary across countries and insurers, but the underlying purpose of mitigating these risks remains consistent.

Shipowners and cargo owners should carefully review the SRCC clause in their marine insurance policies to understand the scope of coverage and any exclusions that may apply. This will help them ensure they have adequate protection for their vessels and cargo against the potential disruptions and losses caused by strikes, riots, civil commotions, and other forms of political or social unrest.