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>> He said in a phone interview with a pro-government TV talk show that the amount takes into account the salvage operation, costs of stalled traffic, and lost

by vladd 6y ago

>> He said in a phone interview with a pro-government TV talk show that the amount takes into account the salvage operation, costs of stalled traffic, and lost transit fees for the week that the Ever Given had blocked the Suez Canal. << It makes no sense for the lost transit fees to be paid by the insurance companies as most vessels waited the 6-day period and then got to traverse the canal with some days in delay (so Egypt still got that money). In the end the claim seems exaggerate and might be indicative of Egypt's lack of focus on long term relations. It's one thing to pay 500'000 USD for a passage, but if I know that I have a 0.05% probability of paying 1 billion dollars (which is another 500'000 USD expected payout on average) then surrounding Africa without any fees is all of a sudden a lot more attractive.

vbezhenar 6y ago
Having company with minimal balance and ready to go bankrupt if necessary is a lot more attractive.
jwalton 6y ago
The number may have been chosen for legal reasons. Here in Ontario, we have no fault insurance, but if you're in an accident with another car from out-of-province, and you caused the accident, you/your insurance will be sued for $10M. It'll always be $10M, because that's the maximum that can be awarded; if you did $3000 in damage and they ask for $3000, then $3000 is the most they can get, but if they ask for $3000 in damages and $9,997,000 in punitive damages... they'll probably still get $3000, but they might more, so why not?
- throw0101a 6y ago
  > Here in Ontario, we have no fault insurance […] I really wish it was named something else, because it causes all sorts of confusion: > A common misconception about no-fault insurance is that insurance companies won't determine who is at fault after an accident. However, this isn't the case. According to the Ontario Insurance Act, in every accident with multiple drivers, insurance companies must always assign a percentage of fault to each driver involved. Other provinces have similar laws. > No-fault insurance simply means your insurance company will handle your claim and pay your damages regardless of who is determined to be at fault for causing the collision. The other person’s insurance company will do the same. * https://www.insurancehotline.com/resources/no-fault-insurance-what-it-really-means-to-you/ https://www.insurancehotline.com/resources/no-fault-insuranc... There are legislated rules on determining fault in the most common cases: * https://en.wikipedia.org/wiki/Ontario_Fault_Determination_Rules https://en.wikipedia.org/wiki/Ontario_Fault_Determination_Ru...
throw0101a 6y ago
> It makes no sense for the lost transit fees to be paid by the insurance companies as most vessels waited the 6-day period and then got to traverse the canal with some days in delay (so Egypt still got that money). Except during those six days no ships went through, and so no revenues were collect. That is, Egypt could have gotten more revenue if no ships were delayed—and remember some ships started going around Cape Horn in South Africa. It's about the 'opportunity cost' of the blockage.
- kshacker 6y ago
  So is the opportunity cost 6 days of outage or maybe 0.2 days since most of the traffic was just delayed rather than Re-routed? Also I am not a lawyer, but if I were one, I would wonder if there have been previous outages like this and how has that cost been recovered? And how many times has the canal delayed the ships anyways and not paid them? Also would the canal pay from this money the ships that were delayed as they were also an affected party. The game can be played from multiple sides.
- dotancohen 6y ago
  > It's about the 'opportunity cost' of the blockage. It should be noted in context that the Suez canal occasionally closes preemptively when high winds are expected or experienced.

by vladd 6y ago

vbezhenar 6y ago

Having company with minimal balance and ready to go bankrupt if necessary is a lot more attractive.

jwalton 6y ago

The number may have been chosen for legal reasons. Here in Ontario, we have no fault insurance, but if you're in an accident with another car from out-of-province, and you caused the accident, you/your insurance will be sued for $10M. It'll always be $10M, because that's the maximum that can be awarded; if you did $3000 in damage and they ask for $3000, then $3000 is the most they can get, but if they ask for $3000 in damages and $9,997,000 in punitive damages... they'll probably still get $3000, but they might more, so why not?

throw0101a 6y ago
> Here in Ontario, we have no fault insurance […] I really wish it was named something else, because it causes all sorts of confusion: > A common misconception about no-fault insurance is that insurance companies won't determine who is at fault after an accident. However, this isn't the case. According to the Ontario Insurance Act, in every accident with multiple drivers, insurance companies must always assign a percentage of fault to each driver involved. Other provinces have similar laws. > No-fault insurance simply means your insurance company will handle your claim and pay your damages regardless of who is determined to be at fault for causing the collision. The other person’s insurance company will do the same. * https://www.insurancehotline.com/resources/no-fault-insurance-what-it-really-means-to-you/ https://www.insurancehotline.com/resources/no-fault-insuranc... There are legislated rules on determining fault in the most common cases: * https://en.wikipedia.org/wiki/Ontario_Fault_Determination_Rules https://en.wikipedia.org/wiki/Ontario_Fault_Determination_Ru...

throw0101a 6y ago

> It makes no sense for the lost transit fees to be paid by the insurance companies as most vessels waited the 6-day period and then got to traverse the canal with some days in delay (so Egypt still got that money). Except during those six days no ships went through, and so no revenues were collect. That is, Egypt could have gotten more revenue if no ships were delayed—and remember some ships started going around Cape Horn in South Africa. It's about the 'opportunity cost' of the blockage.

kshacker 6y ago
So is the opportunity cost 6 days of outage or maybe 0.2 days since most of the traffic was just delayed rather than Re-routed? Also I am not a lawyer, but if I were one, I would wonder if there have been previous outages like this and how has that cost been recovered? And how many times has the canal delayed the ships anyways and not paid them? Also would the canal pay from this money the ships that were delayed as they were also an affected party. The game can be played from multiple sides.
dotancohen 6y ago
> It's about the 'opportunity cost' of the blockage. It should be noted in context that the Suez canal occasionally closes preemptively when high winds are expected or experienced.