Paper by Robert Johnston
Insurance suffers from a perception and a reality. A sweeping generalisation I know, but so often insurance is perceived as unhelpful, a necessary evil and expensive. Just in defence of insurance, I would point out that the reality is that insurance is the glue that holds so much of what we do in place, from the consequence of the bushfires burning outside Sydney to the risk of someone fraudulently using your credit card. It is constantly evolving and furthermore the advice that you receive from the profession is free.
Insurance can also play a very significant social role, and that is what I want to concentrate on this morning and specifically the question of what is the real message of MLC, and the question of what have you done about it? Let me quote verbatim the wording of Cl. 4.1.4 of Title 4, which is concerned with health protection and medical care. It states and I quote ‘The requirements for medical care include standards aimed at providing Seafarers with health protection and medical care as comparable as possible to that which is generally available to workers ashore.’ What does that mean to you? To me what it means is that employers should give their crew benefits. In an ideal world, just like their shoreside counterparts, they ought to have an employer sponsored healthcare programme, which provided benefits directly to the crew, and perhaps to dependents too. This is not liability insurance; this is the provision of benefits.
But this is not in competition with the P&I Clubs. Anyone who has read my C.V. will know that……… The provision of benefits can be complementary to P&I. Clubs do not see themselves as 24-hour healthcare providers; they have no wish to insure routine medical expenses. More significantly perhaps they can’t issue insurance policies personally to crew members. Only the owners and managers can be members of Clubs.
I wonder whether many employers have actually said to their crew… “Do you know what, because of MLC, we are exploring the possibility of improving the healthcare benefits that we can offer you. We believe that you ought to have your own personal confirmation of insurance.” There has been talk of improving communication and enhancing the recruitment package. Well, being able to download and read your own healthcare insurance policy is not perception, it would be reality.
Yes, yes but this will be too expensive, we can’t afford it, I can hear the cry! My response to that is that is your perception, have you tested the reality? P&I Clubs, as I said earlier, don’t want to insure routine claims. Today crew deductibles, the cost to you of any single claim, vary from say $7,500 at the bottom end to $100,000 and more at the top. Owners are already bearing a retained cost therefore, so why don’t you explore buying benefits?
Furthermore, why don’t you have an input as to what those benefits might be? Engage with your crew. Test the market. Be pro-active. Some of the problem issues today such as “No loyalty”; “Seafarer morale is very low”; “Retention is very poor”. Talk has been about medical treatment and insurance as being something that you need to provide in order to best cope with crew depression. So you have an issue here.
So what is it about Crewsure. I think first and foremost it is about the fact that we are trying to answer a need; to fill a gap. The MLC is an International Labour Organisation initiative. Its intention is laudable. We wouldn’t be having presentations about crew depression and suicide if the lot of Seafarers were an easy one. Of course, there are aspects of The Convention that are unpalatable, unworkable, unthinkable, but that is not to say that much of it is not reasonable and right, and deserving of implementation, and Crewsure is intended as a product to help that happen. I believe that in time all employers of crew, be it Owners, Managers, Placement Services will give benefits to crew as a standard contractual entitlement and that P&I insurance will sit excess of the benefits’ programme. This is exactly what happens right now in the case of super yachts. The owners give healthcare and personal accident insurance to their crew, and the P&I insurance sits above these policies. It’s not going to happen overnight in the shipping industry but it’s got to be worth exploring.
My message, therefore, is this, don’t perceive insurance as a necessary evil, a barrier to innovation, because it isn’t. Talk to your insurers, or your brokers, ask them to play a considered and pro-active role in building an insurance structure that works for you and your crew.
The really important point here is this that your insurance for your crew doesn’t have to be about liability.
Unpaid wages is a very interesting case in point.
Loading...
