Bangladeshi owner to receive $22.48 million after ship explosion in Ukraine

Insurers are set to pay state-owned Bangladesh Shipping Corporation (BSC) $22.48 million for its ship, which was hit by a missile during fighting in Ukraine, two officials said Tuesday.

The pending settlement is one of the first lawsuits to be paid out since Russia invaded Ukraine on February 24 last year, in a conflict that has added tens of thousands of dollars to risk premiums on every flight.

As a result of an explosion on the night of 2 to 3 March last year on the ship Banglar Samriddhi, sailing under the flag of Bangladesh, a crew member was killed. The ship was subsequently abandoned and the rest of the crew evacuated back to Bangladesh.

The BSC has been in talks since then and this week made a decision on the payment, officials said.

They added that the insurance was provided by Dhaka-based Sadharan Bima Corp. and reinsured through London gambler Lloyd’s Beazley and broker Tysers.

“All formalities with the reinsurer have been completed. The amount will be transferred tomorrow, if not today,” said Syed Belal Hossain, managing director of Sadharan Bima Corporation.

Another official, who asked not to be named due to the sensitivity of the matter, said $22.48 million would be transferred by reinsurer Beazley, covering 97.5% of the claim and the rest by Bima. The official added that Bima’s 2.5% would later be adjusted with Beasley.

Beasley and Tycers declined to comment, and BSC did not immediately respond to a request for comment.

Since Russia’s invasion of Ukraine a year ago, the Black Sea has been listed as a high-risk area by the London insurance market, and additional war risk insurance premiums of tens of thousands of dollars a day are common expenses along with fuel and freight.

According to industry sources, shipowners can demand that their insurers pay for the total loss of ships stranded for a year. Insurers are struggling with more than 60 ships stuck in Ukraine.

“Claim notifications will start coming in and the process will start here. It is possible that a settlement could be reached at a reduced rate, allowing the owner to keep his vessel and then sell it,” one source at the insurance company said. “It will happen in the next few weeks.”