The JH 143 – Shipyard Risk Assessment form is a tool insurers can use to find out more about the yards they would like to insure.
Ship repairing is an inherently hazardous operation. Hot work in tanks previously used for carrying crude oil or chemical products emitting explosive or toxic fumes, inflammable liquids, paint and cleaning solvents in enclosed areas, flammable industrial gases, electrical hazards through welding or electrically operated equipment in wet environment, lifting and transporting all kinds of loads, working on scaffolding, areas with inadequate ventilation or lighting, transfer of liquids on board, x-ray work, slip and trip hazards, airborne contamination through blasting and painting, all create a hazardous environment where a potential risk is continuously present.
The increase in shipbuilding activity took its toll on insurers and the market was hit by several major claims – especially in the earlier stages of the boom, from late 2002 to early 2004. During that period a number of claims, totaling approximately USD 740 million, hit the insurance market, whilst total world-wide premium for all new-buildings was believed to be in the range of approximately USD 125 million.
Something was terribly wrong and needed to be corrected. The claims prompted insurers to take corrective measures; as such losses could not be sustained by the relatively small builder’s risks insurance market. In particular, the fire on board the DIAMOND PRINCESS triggered a greater interest in yard safety, security and loss prevention management, methods and organization.
The Joint Hull Committee, comprising representatives of Lloyd’s and insurance companies, recommended that a new risk assessment provision be included in policies, and this resulted in the creation of the JH 143 – Shipyard Risk Assessment form, brought into effect from November 2003. The JH 143 is a tool insurers can use to find out more about the yards they would like to insure.
The idea behind this form was to ensure that certain standards are met by the shipyards and should include review and testing of the safety management, quality assurance and quality control of shipyard systems and procedures. It shall include, but shall not be limited to:
- Geographical and environmental risks;
- General site condition;
- Processes and procedures;
- Quality assurance/quality control of the production process;
- General housekeeping;
- Management of subcontractors;
- Permit to work systems;
- Emergency response plan;
- Fire-fighting capability;
- Shipyard equipment;
- Atmospheric monitoring and control of industrial gases;
- Launching and sea trials;
- Site safety;
- Casualty history.
The JH 143 survey calls for a suitably-qualified surveyor to perform the task, preferably an independent surveyor. The surveyor will consult with the yard to perform the actual survey and report back to underwriters. Any recommendations made by the surveyor need to be implemented within a certain time frame in order to maintain full insurance coverage.
As the years have passed the survey has become more and more common and has eventually become a positive element in the process of entering into an insurance agreement
