Making Sure You’re Fully Covered: The Costa Concordia disaster
The Costa Concordia disaster is one of the most infamous maritime accidents in recent times.
On January 13, 2012, the luxury cruise liner Costa Concordia, operated by Costa Cruises, ran aground near Giglio Island, Italy. The ship struck a submerged rock while performing a “salute” manoeuvre – a close pass to the island – tearing a 53-meter (174-foot) hole in its hull. Water flooded the engine rooms, causing a catastrophic loss of power and stability.
Within hours, the ship capsized and partially sank, coming to rest on its side in shallow waters. Of the 4,229 people on board, 32 tragically lost their lives and dozens were injured.
The Costa Concordia disaster was largely attributed to human error. Captain Francesco Schettino deviated from the planned course to perform a close pass to Giglio Island, reportedly as a favour to someone onshore. This reckless manoeuvre brought the ship dangerously close to submerged rocks. During the emergency, poor communication and flawed decision-making further escalated the situation, leaving passengers and crew ill-prepared to handle the unfolding crisis.
The lack of protocol adherence became evident during the chaotic evacuation. Many passengers were unaware of assembly points or proper procedures, leading to confusion and delays. Additionally, the crew faced criticism for their insufficient training in handling such emergencies, which further hindered efforts to manage the disaster effectively.
The Costa Concordia was heavily insured under multiple policies, with total losses estimated at over $2 billion, making it one of the costliest maritime insurance claims in history.
Hull and Machinery Insurance: Covered the ship’s total loss. The Costa Concordia was valued at approximately $570 million.
Protection and Indemnity (P&I) Insurance: Covered the compensation claims which included – Payments to victims’ families
Compensation for passengers’ injuries and trauma
Reimbursement for lost personal belongings.
Environmental Liability Coverage: Addressed the massive cost of removing the shipwreck and mitigating pollution risks. Salvage operations alone cost over $1.2 billion! It was the most expensive and complex in history using an intricate method called “parbuckling” to rotate the ship upright which took a year of preparation. She was then refloated and towed to a scrapyard in Genoa for dismantling.
Business Interruption Insurance: Covered the revenue losses due to the ship’s destruction and reputational damage.
Captain Francesco Schettino was convicted of multiple charges, including manslaughter, causing a maritime disaster and abandoning ship. He was sentenced to 16 years in prison.
His actions became the focal point of blame, though systemic issues within Costa Cruises were also highlighted. It remains a stark reminder of the consequences of poor decision-making, inadequate training and safety oversights. It also highlighted the vital role of comprehensive insurance in addressing financial and environmental damages after such a catastrophic event.
Whilst we appreciate it’s unlikely you will be responsible for steering a cruise ship, it is essential you have adequate cover in place to protect your business (regardless of its size), home, event etc. should you suffer a catastrophic incident. The David J Miller team would welcome the opportunity to carry out an appraisal of your insurance arrangements and requirements so please get in touch and we would be happy to assist.
