$ 1 b X-Press Pearl fine could push up shipping insurance costs

Tuesday, 21 October 2025 05:52 - - {{hitsCtrl.values.hits}}

Sri Lanka’s $ 1 billion court ruling over the 2021 X-Press Pearl disaster has sparked alarm among global shipping insurers, with UK-based Financial Times reporting that the judgment could drive up marine insurance premiums and push more vessels toward uninsured “shadow fleets.”

James Bean, Chief Executive of the London P&I Club, which insured the X-Press Pearl, alleged the Sri Lankan judgment “alarming,” warning that it could have far-reaching consequences for the global maritime insurance market. The X-Press Pearl, a container ship carrying chemicals, caught fire off Colombo after a corrosive substance leaked from a container that ports en route had refused to offload.

Sri Lanka, unlike most maritime nations, is not a signatory to international conventions that cap ship owners’ liability. This exposes ship owners to unlimited claims and could result in higher insurance premiums for ships docking at Sri Lankan ports. Compounding the issue, existing maritime conventions do not cover plastic pellet spills—one of the major environmental impacts of the X-Press Pearl fire.

A surge in premiums, Bean said, may leave some regions increasingly reliant on unregulated vessels without Western insurance. “Such vessels will have no insurance at all,” he was quoted as saying.