Limitation of Liability in the Baltimore Bridge Collapse

The lawsuits are lining up in the collapse of the Francis Scott Key Bridge in Baltimore. There will not only be suits brought for the damage to the bridge itself but no doubt by the people injured in the incident and the families of those killed.

The ability of claimants to recover will be limited by the Limitation of Liability Act. The act limits the liability of the owner of the vessel to the value of the vessel plus the value of its cargo as long as the owner lacked knowledge of the problem beforehand.

It seems to me that will be the critical issue. The value of the Dali, the container ship that struck the bridge, is probably in the tens of millions of dollars. It’s hard to guess at the value of the cargo.

Regardless, unless negligence known of by the owner can be proven which I doubt, the liability will be far less than the damages caused.

Update

Jeanne Eaglesham reports at the Wall Street Journal:

While the lawyers fight, most claims will likely get paid by the insurers, including money for the bridge’s reconstruction. Then they will duke it out among themselves. Other claims might take longer, including those by the families of the people killed in the crash.

Other big sources of claims include the loss of revenue for the port, for the vessels now stuck inside it, and for businesses affected by the resulting supply-chain snarl-ups.

The bridge part of this web of claims may be the simplest to resolve. The structure cost some $60 million to build in 1977, which is around $300 million today when adjusted for inflation.

The bridge is covered by the state of Maryland’s insurance. The policy, covering property damage and business interruption for bridges and tunnels, pays up to $350 million, documents show.

This incident is significant enough that it will be a serious blow to the insurance industry, particularly maritime insurance.