Marine Insurance and Salvage - Legal Framework and Practical Solutions

Abstract

Marine salvage is a fascinating area of the maritime industry and involves aspects that are unique compared to similar undertakings ashore. It is different because ashore there are rescue services available at any time, such as the local fire department. At sea there is no guarantee that help will reach a vessel in distress. Weather conditions can be extreme with no possibility for shelter. Professional salvage is highly specialized and can be a very hazardous undertaking. The salvage award paid out to the salvor is often very generous and much more than normal pay for work performed. A salvage reward is based on the salved values and other criteria such as the skill and efforts of the salvor. The reward is meant as an incentive for a salvor, and for the existence of professional salvage companies. The rules regulating salvage are also unique and reflect the specialized nature of marine salvage. Several parties are involved in a salvage operation, mainly the shipowner, the salvage company and the insurers. There are of course others, such as the national government of the country where the operation takes place, environmental organizations or providers of equipment.

The aim of this thesis is to investigate the marine insurers' involvement in a salvage operation and what kind of cooperation there is between the insurers and the other parties, mainly the shipowner and the salvage company. At the same time this thesis aims to find out whether the marine insurers involvement in salvage is described by the law. I.e. the objective is to compare information in the legal sources of marine salvage and insurance with the practical work undertaken by the insurers, including the cooperation taking place between the insurers and other parties. What information is possible to derive from the law? What do the parties actually do? What goes on “behind the scenes”? What does the law tell us and how are things actually done in the practical world? One main research question: Is the cooperation taking place between the insurer and the salvor described by the law?