India Faces Mounting Insurance Claims Following Twin Maritime Disasters off Kerala
India's maritime industry is facing heightened scrutiny after two serious shipping incidents occurred in close succession off the coast of Kerala. These incidents—the sinking of the MSC Elsa 3 and the onboard fire aboard Wan Hai 503—have triggered large-scale rescue efforts, mounting insurance claims, and intense debate about the adequacy of maritime regulations.
MSC Elsa 3 Sinks off Kerala Coast
On May 25, the Liberia-flagged MSC Elsa 3 sank approximately 14.6 nautical miles off Thottappilly, Kerala. The vessel, which was en route from Colombo to Vizhinjam, reportedly experienced engine room flooding, allegedly due to crew mishandling. The ship was carrying over 640 containers, including hazardous materials such as calcium carbide and more than 300 metric tonnes of fuel oil.
A major salvage operation is currently underway, with the vessel SEAMEC III deployed to cap fuel tanks and begin oil extraction. The goal is to complete the operation by early July to prevent further environmental degradation.
Wan Hai 503 Fire Prompts Emergency Response
Shortly after the MSC incident, another crisis unfolded involving the Singapore-flagged container ship Wan Hai 503. The vessel, en route from Colombo to Mumbai, caught fire off Azhikkal, leading to explosions and the release of potentially hazardous materials into the Arabian Sea.
Eighteen out of twenty-two crew members were rescued, while four remain missing. Indian Coast Guard and Navy units continue to monitor and suppress the fire. The incident raised serious environmental concerns and revealed gaps in emergency response protocols.
Insurance Fallout and Financial Implications
Both vessels were covered under Hull and Machinery (H&M) and Protection and Indemnity (P&I) insurance. Indian marine cargo insurers expect gross premiums to reach ₹5,535 crore in FY 2025, with ₹3,940 crore in cargo insurance alone. Given the scale of damage and the potential for environmental and third-party claims, insurers are bracing for significant payouts.
The cumulative financial impact of these two incidents could run into several thousand crore rupees, affecting reinsurers and the broader maritime insurance market.
Legal Action and Regulatory Oversight
In the wake of the MSC Elsa 3 sinking, Kerala Police filed a First Information Report (FIR) for "rash navigation" against the vessel’s captain, crew, and the ship operator MSC. This followed a complaint by a local fisherman and significant public pressure on local authorities, who were initially reluctant to act due to strategic port partnerships and pending insurance claims.
Opposition leaders and community representatives are calling for full environmental investigations and compensation for affected fishing communities through P&I coverage mechanisms.
Maritime experts have pointed to systemic failures in coordination between central agencies, state governments, and port authorities. There are growing calls for the establishment of a dedicated inquiry commission to review India’s maritime emergency response framework, insurance claim management, and compliance monitoring mechanisms.
The incidents have also reignited debate over safety practices aboard international vessels operating in Indian waters and the enforcement of pollution and cargo handling standards.
