Insurance requirements for Queensland vessel pollution and wreck removal

We have recently had experience with Maritime Safety Queensland (MSQ) raising an issue about whether a certificate of insurance, issued by a liability insurer for a domestic commercial vessel, satisfies the insurance requirements imposed by Queensland’s Transport Operations (Marine Pollution) Act 1995 and the Transport Operations (Marine Pollution) Regulation 2018. Such insurance is required for vessels more than 15m in length (commercial or recreational) when in Queensland’s coastal waters.

While Queensland has had legislation in place for many years requiring vessels to maintain, and have evidence of, certain levels of insurance for clean-up costs for pollution discharges and wreck removal, the Regulations were changed in 2018 and the new Regulations require the evidence of the insurance to include specific information about the nature and limits of the insurance. It has come to our attention that certificates of insurance currently provided by liability insurers may not contain the specific information which the 2018 Regulation now requires.

We therefore suggest that insurers, brokers and owners of vessels should immediately review the contents of their certificates of insurance to ensure they comply with the Act and Regulation.

Insurance requirements for vessels

Pursuant to the Transport Operations (Marine Pollution) Act, for vessels more than 15m in length overall, a shipowner must have insurance that, to limits  applying under the Regulation, is sufficient to pay for:

1. The clean-up costs of the discharge of a pollutant from the ship into coastal waters (“clean-up costs”); and
2. The costs of salvage or removal of the ship from coastal waters if the ship is abandoned or wrecked (“wreck removal costs”)

Evidence of insurance

Under the Regulation, a certificate of insurance for an insurance policy or a document evidencing the currency of the insurance policy must be kept on board the vessel. The 2018 Regulation (which commenced on 1 September 2018), however, introduced an additional requirement that the certificate of insurance or other document must include information about whether the insurance policy complies with the limits prescribed for clean-up costs for pollution and wreck removal costs.

Therefore, strict compliance with the Regulation appears to require the certificate of insurance or other document evidencing the currency of the policy to state that (1) cover is provided for clean-up costs for pollution and wreck removal costs and (2) to state the amounts provided for the cover.

It is an offence for an owner of a vessel to fail to have onboard the vessel the evidence of the insurance required by the Act and Regulation.

Insurance limits

The Transport Operations (Marine Pollution) Regulation 2018 prescribes the minimum monetary limits required for the insurance. The minimum limits are:

For a domestic commercial vessel, or a Queensland regulated ship, that is more than 15m but less than 35m in length overall:

• $500,000 for clean-up costs for pollution
• $10,000,000 for wreck removal costs

For a recreational ship that is more than 15m but less than 35m in length overall:

• $250,000 for clean-up costs for pollution
• $10,000,000 for wreck removal costs

For a ship that is 35m or more in length overall:

• $10,000,000 for clean-up costs for pollution
• $10,000,000 for wreck removal costs