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SAFER,HEALTHIER,MORE SECUREA Member’s guide to loss prevention

CONTENTS

Committed to safety 3

Ship safety 4-5

Crew health 6-7

Operational security 8-9

The Loss Prevention team 10

UKP&I Club – Loss Prevention 3

But insured losses are not the whole story – they caneven be the tip of the iceberg. Suffering and loss of lifecaused by shipping incidents are irretrievable, as canbe the consequent damage to your business reputationand relationships.

Right controls

Given the extensive hazards and human involvement inshipping, it is inevitable incidents will continue tohappen. However, we believe that with the right controlsin place, the consequences – and therefore the losses– can be limited to an absolute minimum.

For over 30 years, the Club’s full-time and highlyexperienced loss prevention team has been analysingthe causes of shipping liability claims to understandwhat goes wrong – both before and after an incident.

As a marine liability insurer owned by its Members, it is our duty to help youreduce accidents and losses on your ships that lead to claims, therebydirectly reducing your insurance costs.

The result is an unrivalled and growing range of lossprevention data and advice that is freely available to youvia the Club’s website. It includes bulletins, articles,guides, videos, checklists and posters, and covers everyaspect of merchant shipping.

Bespoke services

But there is no one-size-fits-all approach: everyshipowner is different. You face different risks indifferent ways to your competitors.

We have therefore developed a unique series ofbespoke loss prevention services for UK P&I ClubMembers. These cover the safety of your ships, thehealth of your crews and the security of your operations.This brochure explains these services in more detail. Wehope you will take full advantage of them.

COMMITTED TO SAFETY

What we think you need

• To avoid claims, fines, delays, detentions and other losses resulting from incidents onyour ship.

• To ensure investment in safety controls and training is cost-effective.

• To have evidence you are operating safely.

• To reduce your insurance premiums and need for future inspections.

Our solution

A detailed safety analysis of your ship by world-class experts – either directly or by self-assessment.

SHIP SAFETY

4 UKP&I Club – Loss Prevention


Every year the UK P&I Club deals with thousands ofclaims using the expertise and experience of itsprofessional claims handlers, ex-seafarers and lawyers.The insight gained from this over the past 30 years hasenabled us to develop a structured approach to riskanalysis on ships.

This proven approach is now embedded in our riskassessment programme.

Proactive approach

As such we encourage you to take a more proactiveapproach. We invite you to commission our experiencedteam of inspectors and surveyors to conduct risk analysesof your entered ship at a time and place that suits you.

The analysis will show you how major hazards canoccur on your ships and what safeguards you can useto prevent them. We will develop simple ‘bow tie’diagrams of the causes and consequences of incidentswith your crews and shore teams, helping to win safetyparticipation and buy-in across your whole organisation.

The transparency of the analysis will enable your riskmanagement to be prioritised, ensuring the most cost-effective use of limited resources. Furthermore, theevidence-based approach will help you satisfy thedemands of charterers, shippers and authorities forproof you are in control of your risks.

Bow Tie

We have developed a system to rate and record risks,and to assist Members in assessing and reducing theironboard risks by visits to entered ships. We aim toconduct Risk Assessments on at least 10% of enteredships, in each member group, at least once in every twoyears. However, fleets may be targeted for morefrequent visits where there is a persistent pattern ofclaims, or other reason to be concerned about the levelof risk, with the result that in practice the number ofships on which risk assessments are carried out is closeto 10% of our ocean-going fleet per year.

The results of ship risk assessments are benchmarkedagainst results from the Club as a whole, offeringin-depth risk profiling of Members’ fleets. Through officeand ship visits, the Club’s own Risk Assessors helpMembers to assess relevant hazards and threats, tocompare their performance with averages for the Club,and to examine the controls in place to reduce the riskof incidents occurring.

Self-assessment option

We can also offer you a self-assessment option of therisk analysis service. We have developed a self-assessment kit which allows your crews to rate andreview risk preparedness of their ships themselves, aswell as areas of exposed risk.

SUMMARY

Features of our ship safety service

• Proactive strategic approach based on knownrisk threats when analysing 12,000 claims.

• Covers cargo, pollution, personal injury, collisionand third party property damage hazards.

• Graphic presentations for your crews andmanagers of major hazards specific to the shipand a prioritised set of measures on how tocontrol them.

• An evidence-based schedule of risk managementmeasures.

• Includes risk profiling and benchmarking of safetyperformance.

• Structured, repeatable, transparent and easilyupdated.

How we think you will benefit

• Strategic guidance for you on tackling the rootcause of expensive claims.

• Quantified real-life case examples enable you toinvest proportionately in risk management andloss prevention activity.

• Detailed reports enable you to share informationacross your fleet and operational departments,enhancing co-operation and effectiveness.

• Consistency in approach facilitates sustainedand measured loss prevention activity over thelonger term.

• Assistance with port state control compliance,reducing the delay to ships and the burden onyour masters and crew during port calls.

• Self-assessment option encourages a ship’screw to take more pride in their professionalismand in their ship.

• Demonstrate your sense of corporate socialresponsibility and care for the safety of yourworkforce.

• Improved claims performance will result inreduced insurance premiums.

• No mandatory inspections provided a satisfactoryassessment is carried out every two years.

A healthy crew is vital for the safe and successfuloperation of your ship.

Crewmembers who fall ill at sea can suffer terribly, ascan the other crewmembers who are trying to care forthem, as well as covering for their roles and doing theirown jobs. It usually means returning to port or making amajor diversion, causing further disruption. In addition,are the costs of delays, diversions, hospital care andrepatriation.

While illness can strike at any time, it is far less likely tohappen if each crewmember has had a proper medicalexamination before joining your ship. The challenge isensuring that medical certificates offered bycrewmembers are genuine and have been carried outby reputable and accountable clinics.

Pre-employment medicals

The UK P&I Club’s pre-employment medicalexamination (PEME) service has been operating forover 20 years. It has become one of our most effectiveloss prevention initiatives.

The aim of the service is to reduce the volume and valueof crew illness claims which are caused by a pre-existing illnesses or disease. These underlyingconditions often impact on the crewmember’s fitness forservice and can endanger not only the health of theseafarer but also the safety and wellbeing of the wholecrew and ship.

We have designed a standard pre-employment medicalexamination for crewmembers compliant with theMaritime Labour Convention 2006. The examination isconducted on our behalf in one of over 56 approvedclinics in 21 crew-supply countries. Approved clinicsare regularly audited and held accountable by us fortheir performance.

Cost savings

The average cost of crew illness claims handled by UKP&I Club in recent years is approximately US$20,000.Over the past 20 years, the PEME service has arrangedover 350,000 medicals for Members and screened outsome 11,500 unfit crewmembers.

If the unfit crew had gone to sea and become ill, totalclaims cost could have been around US$200 million.The average cost of a PEME medical over this periodwas just US$112, so the total spent by Members hasbeen around £33 million – just 17% of the potentiallosses.

Whilst it is difficult to be specific about the monetarybenefits derived from the service, we have no doubt thesavings are considerable. The Club continually reviewsthe performance of the PEME service, identifyingbeneficial improvements and innovations in the medicalexaminations and the overall administration.

Case studies

The importance of properly conducted pre-employmentmedical examinations is illustrated by the followingcases, which occurred outside the Club’s PEMEservice.

Diabetes and drink problemSome 10 days after joining a Member’s ship, a seafarerwas hospitalised in the USA, initially for an infectedinjury to his elbow. He then developed severerespiratory problems and needed a tracheotomy toassist with breathing. It was a number of weeks beforehe became well enough to be repatriated, resulting in atotal cost to the shipowner of US$307,000. It becameevident during his hospitalisation that the primarycauses of his ill health were diabetes and a recenthistory of alcohol abuse, neither of which were pickedup by his conventional crew medical examination.


• To ensure your crewmembers are healthy and fit before joining your ship.

• To avoid the suffering and distress caused when a crewmember becomes ill at sea from apre-existing medical condition.

• To avoid the often high costs associated with diverting to port, hospitalising andrepatriating an ill crewmember.

Our solution

A high quality yet cost-effective pre-employment medical examination service.

CREW HEALTH



Advanced stomach cancerFollowing a conventional medical examination at a localclinic in his resident country a seafarer was despatchedto join a Member’s ship in the Philippines. Before hehad a chance to join, he had to be hospitalised in thePhilippines for emergency medical attention due to apainful tumour in his upper abdomen. He wasdiagnosed as suffering from an advanced stage ofstomach cancer. He died within 48 hours of beingrepatriated.

Diabetes and pneumoniaA crewmember who failed to pass the UK P&I ClubPEME carried out on behalf of a Member joined anotherMember’s ship after a basic Department of Healthexamination. Shortly after joining the ship, he suffered ahigh fever and fell unconscious. The ship had to divertback to port in the USA to hospitalise the crewmember.After a lengthy stay in intensive care followingcomplications caused by pre-existing diabetes andpneumonia, total costs to the Member wereUS$237,000.

Hypertension and heart attackDespite having a basic Department of Health medical, acrewmember on a Member’s ship was taken ashore to alocal hospital emergency room complaining of severestomach pains. Diagnosed with congestive heart failure,renal failure as well as possibly having suffered a recentheart attack, he was subsequently placed into intensivecare. The diagnosis also identified he was receivingmedication for pre-existing high blood pressure.Following a month of intensive hospital treatment andan accompanied repatriation, the Member incurred over

SUMMARY

Features of our crew health service

• Efficient, high quality medical examinationsincluding personal details, medical history,vaccinations, physical examination, plus blood,urine, hearing, vision, lungs and any further testsrequested by you (subject to local laws).

• Carried out by 56 approved clinics in Australia,Bulgaria, Canada, Croatia, France, Holland,Hungary, India, Indonesia, Ireland, Pakistan,Philippines, Poland, Romania, Russia, Singapore,South Africa, Spain, Thailand, Ukraine, UK andUSA.

• Clinics directly instructed by and fullyaccountable to us rather than manning agencies.

• Clinics audited every two to four years.

• Standardised examination results maintained insecure online database for monitoring and fraudchecks by PEME team, clinics and Members.

• Over 20 successful years of experience, withover 350,000 examinations completed and11,500 unfit crewmembers identified.


• Screening of all crewmember before employmentensures only the healthiest and fittest crew areon board your ship.

• Reassurance that your crewmembers’ medicalcertificates are genuine and carried out on yourbehalf by a reputable clinic.

• Avoids unnecessary suffering of crewmemberswith pre-existing medical conditions. becoming illat sea, as well as reducing the stress and risk toother crewmembers.

• Enables you to keep track of the health of all yourcrewmembers via online records.

• Reduces crew illness claims both above andbelow your P&I insurance deductible.

The shipping industry has long been a target for criminalactivity. The high value and volume of maritime cargoes,the perceived ‘deep pockets’ of shipowners, and theinherent difficultly of making anything on or next to thesea entirely secure, continues to attract opportunist andorganised crime.

Increasing reliance on information technology has alsoexposed owners and operators to the growing risk ofcyber attacks. These can come from a diverse range ofsources, including criminals, terrorists, roguegovernments, activists, competitors and employees.

But it is often difficult for the owner of a ship tradinginternationally both to prove criminal activity and toidentify the perpetrators. Stolen cargo, fraudulentdocuments, smuggled drugs or assaulted crew oftensimply become the shipowner’s problem, resulting inclaims, fines, delays, increased insurance premiums andeven imprisonment.

Specialist investigators

The UK P&I Club therefore provides a unique criminalinvestigation and security advisory service to Membersknown as Signum Services. Staffed by former seniordetectives from London’s Metropolitan Police Service,the service has been solving crimes against Membersfor over 60 years.

The service is designed to provide a prompt,confidential and professional response to any maritimecrime involving our Members worldwide. Cases ourinvestigators have been called upon to investigateinclude cargo thefts, bunker frauds, fraudulent claims,forged bills of lading, cyber attacks, drug smuggling,people smuggling, arson attacks, homicide, sexualassaults and threats.

They will travel throughout the globe to make theirenquiries, supported by extensive high-level contactswithin national law enforcement agencies, intelligenceservices and military special forces. They are alsoMembers of international, European and UK lawenforcement associations.

Security surveys

You can also contact Signum for advice on any aspectof your operational security, from firewalls to firearmsand from countermeasures to container seals.

Signum also carries out security surveys of terminalsand warehouses for you. The team’s long experience ofdealing with criminals tells them how, why and wherepremises are vulnerable. Investigators will attend toexamine the physical security of premises and, equallyimportantly, to assess the effectiveness of securityprocedures.

Experience has shown that in many cases crime can beprevented by thoroughly vetting staff, good physicalprotection of premises including closed-circuittelevision and good security procedures which areproperly enforced.


• To identify the source of any suspected criminal activity relating to your ship, crew or cargo.

• To avoid liability for any suspected criminal activity and ensure it does not happen again.

• To reduce your insurance premiums.

Our solution

A specialist yet cost-effective maritime criminal investigation and security advisory service.

OPERATIONAL SECURITY



Case studies

Copper theft at load portSignum was asked to investigate a cargo claim againsta Member who delivered a container with sand inside itrather than US$2 million of copper wire. The cargoowner had seen the container being stuffed in thePhilippines and had even followed the truck to the loadport. However, from analyses of weights and times,Signum proved the truck had diverted just before theport to another location, where the copper wassubstituted for sand. The culprits were also identified asmembers of an organised crime gang, which hadcommitted similar frauds in recent years. As a result ofthe investigation, the Member was able to defend theclaim and the perpetrators were brought to justice.

Cocaine find on arrivalA Members’ ship and crew were detained under armedguard in Venezuelan territorial waters following thediscovery of a large quantity of cocaine in the funnel.Signum investigators boarded the vessel at anchor twomiles offshore and interviewed all crewmembers forseveral days. One of the engine crew eventuallyconfessed to bringing the drugs on board and his rolein a major international drug-smuggling operation. As aresult of the investigation, the crewmember wassentenced to 14 years in jail and the vessel andremaining crew were released without charge.

Television thefts at discharge portSeveral Members asked Signum to investigate theftsfrom containers they had shipped from the Far East to aparticular Indian port. The investigator found that thecontainers were being broken into at the importterminal. The contents – usually television screens –were being smuggled out of the terminal by hiding themin the space under a truck chassis. During asubsequent surveillance operation in conjunction withlocal police, seven men were caught committinganother theft. They then admitted responsibility for all ofthe previous thefts and were convicted. As a result ofthe investigation, all Members were able to defendcargo claims against them.

People smuggling in containersA Member delivering a container from the Far East viaMorocco to Spain became suspicious about itsconstruction, and asked Signum to investigate. It wasfound that the container had been modified with a falserear wall hiding a 600 mm wide compartment in whichpeople had been smuggled. Examination of the wasteinside the container revealed a baker’s bag and emptywater bottles from Casablanca. From these theinvestigator eventually discovered where the containerhad been altered and occupied, resulting in thoseinvolved being held to account. As a result of theinvestigation, the Member put in place a new securityprocedure to enter, check, measure and seal everyempty container on the quayside before loading.

SUMMARY

Features of our operationalsecurity service

• Investigates any kind of criminal attack againstyour ship, crew or cargo – including cargo theft,bunker fraud, fraudulent claims, forged bills oflading, cyber attack, drug smuggling, arson,homicide, sexual assaults and threats.

• Service includes desk research, backgroundprofiles, liaison with local law enforcementagencies, interviews, surveillance, forensicexamination, asset tracing, locating missingpersons and container seal testing.

• Provides you with an immediate responseanywhere in the world.

• Every effort made to uncover all the facts andgain the truth.

• Detailed and confidential advice given on how toimprove your operational security to avoid arecurrence.


• A unique and highly experienced team ofinvestigators who will quickly get to the bottom ofany suspected criminal activity relating to youroperations.

• When perpetrators identified, written evidencewill provide you with a strong defence againstclaims or penalties for the criminals’ actions.

• Operated by us on your behalf, the serviceensures absolute confidentiality and control ofcosts.

• Comprehensive advice on how you can preventcriminal activity happening or recurring, both atsea and ashore.

• Reduced losses from criminal activity will lead toa reduction in insurance premiums.


Loss Prevention and Ship InspectionsFax: +44 20 7283 6517Team mailbox: [email protected]@[email protected]

THE LOSS PREVENTION TEAM

From left to right: Stuart Last PEME Administrator, David Thompson Signum Investigator, Sophia BullardPEME Director, Mike Caroll Signum Investigator, Stuart Edmonston Loss Prevention Director, Aoife SuppleLoss Prevention Secretary, Petar Modav Loss Prevention Senior Executive, George Devereese Loss PreventionExecutive. Not shown: Costas Zoidis Senior Claims Executive (Greece), George Radu Claims Executive (USA),Captain Anuj Velankar Senior Loss Prevention Advisor (Asia), Saidul Alom PEME Administrator.

We are committed to safety. Our high-level loss prevention programme isthe most extensive in the industry. Our full-time, worldwide loss preventionteam provides our Members with proactive and inclusive loss preventionsupport. The team provides technical and operational advice to Members aswell as participating in crew seminars and training days. If you would like toknow more about the work of the team, please contact us [email protected]

PEMETel: +44 20 7204 2417Email: [email protected]

SignumTel: +44 (0) 207 204 2258Fax: +44 (0) 207 626 8379Email: [email protected]

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