[Ferry Disaster] Insurance not valid if ship sinking caused by alterations: court

By Suk Gee-hyun
  • Published : May 1, 2014 - 20:23
  • Updated : May 1, 2014 - 20:35
Insurance firms are not required to pay for vessels that sink due to changes in the structure of the ship, a Seoul court said on Thursday.

The Seoul Central District Court on April 3 ruled in favor of Dongbu Insurance Co., concluding that the firm does not have to pay for the vessel Seokjung 36 that sank off the coast of Ulsan in 2012.

The then 29-year-old Japanese ship was purchased by Seokjung Engineering and Construction in 2007. Its structure was later modified, adding more than 500 tons to its weight. The case in question is assumed to be similar to that of the capsized ferry Sewol, which is believe to have listed and capsized due to renovations that altered its balance.

“The large-scale alteration of the ship affected the ship’s sinking,” Judge Oh Young-joon said in his ruling.

At the time of the accident, 12 out of 23 workers on board died through drowning or being trapped in the capsized ship.

A director in charge, surnamed Kim, received 18 months behind bars for violating the marine environmental law, manslaughter and negligence.

The court at the time also attributed the accident to the ship’s refurbishment by the operator, which made it difficult for the ship to accommodate the extra load.

The Korea Ship Safety Technology Authority said in its opinion letter that the added weight from the refurbishment raised the ship’s center of gravity, reducing its restoration force.

Dongbu Insurance filed a lawsuit against the operator, claiming compensation and insurance.

The case has been brought back into the spotlight as the ferry Sewol sparked public interest over how the operator will deal with the biggest maritime disaster in decades.

According to Yonhap, Sewol has insurance coverage from Meritz Fire and Marine Insurance and the Korea Shipping Association, which totals about 11.3 billion won ($10.9 million).

By Suk Gee-hyun (