Question on The Merchant Shipping (Local Vessels) (Amount of Insurance Cover) Notice

Hon CHAN Kin-por to ask:

The Merchant Shipping (Local Vessels) (Amount of Insurance Cover) Notice, made under the Merchant Shipping (Local Vessels) (Compulsory Third Party Risks Insurance) Regulation (Cap. 548 sub. leg. H), stipulates that the amounts of minimum liability cover for a local vessel carrying more than 12 or up to 12 fare-paying passengers are HK$5 million and HK$1 million respectively. On the other hand, the minimum amount of insurance cover against third party risks required for a vehicle is $100 million. Following the maritime disaster on 1 October this year in which 39 people died, there are concerns among members of the community about whether the coverage for a vessel is sufficient to settle the claims in the event of a major maritime disaster. In this connection, will the Government inform this Council whether it will review the risks of maritime traffic incidents and raise the amounts of minimum liability cover for different classes of vessels, with a view to providing more comprehensive protection to passengers on vessels; if it will, of the factors to be taken into consideration, and the expected time by which it can put forward a new minimum liability cover?

Public Officer to reply : Secretary for Transport and Housing


The existing requirements made under the Merchant Shipping (Local Vessels) (Amount of Insurance Cover) Notice are just the minimum liability cover. To our understanding, owing to operational needs, it is very common among vessel owners and operators to insure in excess of the statutory requirements. Nevertheless, in response to the vessel collision incident off Lamma Island on October 1, 2012, the Administration will review the regulatory measures governing navigation safety of passenger carrying vessels, including requirements on third party risks insurance.

As I have indicated in my response at the adjournment debate on “follow-up work relating to the October 1 maritime disaster” held on October 18, 2012, the Marine Department (MD) will convene a meeting of the Local Vessels Advisory Committee (LVAC) on October 26, 2012 to discuss, as a priority, ten items relating to vessel safety and regulation, including the proposal to increase the minimum liability cover of the compulsory third party risks insurance for better passenger protection. A dedicated working group comprising representatives of vessel operators, maritime insurance bodies and other relevant parties will be set up under the LVAC to conduct a review. The review will cover consideration of such factors as the number of past maritime accidents, experience in handling claims and the current situation. The working group will, upon completion of the review, submit recommendations to the Administration for consideration. The Administration recognises the urgency of increasing the minimum liability cover. We will proceed with the legislative amendment exercise once a consensus is reached with the industry. We hope that Members would support those amendments when they are ready.

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