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Chubb, the insurer of Baltimore’s Francis Scott Key Bridge, is reportedly preparing to make a $350 million payout to Maryland a little more than a month after it collapsed.
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It would be the first large payout in the potentially years-long debate over who has to pay for the bridge’s collapse. Morningstar DRBS expects insured losses to total between $2 billion and $4 billion, exceeding the $1.5 billion loss incurred by the wreck of the Costa Concordia in 2012.
Chartered by Maersk, the DALI cargo ship left Baltimore on March 26 for Sri Lanka before it experienced an apparent loss of power and struck one of the bridge’s critical support columns. It quickly collapsed, killing six construction workers and shutting down one of the major ports in the U.S..
Henry Daar, the head of property claims for WTW, the bridge’s broker, told The Wall Street Journal that the payment is expected to be authorized within weeks. The check will hit the upper limit of Maryland’s coverage for the bridge. It will also provide some business-interruption coverage for the Port of Baltimore, which is losing about $88 million per year in tolls, Daar told The Journal.
“I give Chubb kudos for recognizing that this is clearly going to be a full-limits loss,” Daar said. “They could spend millions and millions of dollars in fees for accountants and adjusters over the next few years, or they could pay the claim.”
A representative for Chubb did not immediately respond to a request for comment.
Chubb is also expected to support Maryland in suing the owner and operator of the DALi to try and recover losses, The Journal reports. Grace Ocean Private, the owner of the DALI, and the ship’s operator, Synergy Marine Group, have filed a petition to cap damages they may be on the hook for at $43.6 million. If that petition is approved, the estimated total insured loss would significantly decrease.
The City of Baltimore and at least one local business have sued Synergy and Grace Ocean and accused the companies of “gross and potentially criminal negligence.” The FBI has opened a criminal investigation into the bridge’s collapse. The National Transportation Safety Board is also investigating.
The collapse of the bridge shut down vessel traffic through Baltimore’s port, which in 2023 handled 52.3 million tons of foreign cargo, worth $80 billion. The port is a major player in supply chains for the auto and energy industries.
Late last week, Maryland’s Port Administration opened a temporary channel allowing ships docked at the port to leave. The 35-foot-deep channel was the fourth opened by the state to allow movement out of the port.
The U.S. Army Corps of Engineers expects to reopen the port’s permanent 700-foot wide, 50-foot deep channel by the end of May. More than $6 billion of cargo doesn’t pass through the port every month it remains closed.
This article originally appeared on Quartz.
