Insurance Worries Almost Stopped Northwest Passage Trip

Nordic Orion's trip across the Northwest Passage was the first of its kind

The bulk carrier Nordic Orion's voyage through the Northwest Passage last month was possible only after last-minute decisions by insurers to cover the voyage through the untested route, Canadian newspaper the Globe and Mail reports.

The ship had originally been slated to carry its cargo of coal through the Panama Canal, but owner Nordic Bulk Carriers A/S (Nordic Bulk) decided to take advantage of the Northwest Passage shipping season and use that route instead.

Andrew Teasdale, marine surveyor with insurance firm RSA Group, which underwrote hull coverage for the ship, said the unusual nature of the trip required extensive research on the route and the company's management, with discussion of ice coverage, whale breeding and migration grounds, and channel depth.

Additional insurance companies provided P&I insurance.

Teasdale declined to discuss financial details of the insurance, but brokers said it would cost at least $100,000 to insure a ship like Nordic Orion, with a premium of 30 percent for travel through the Northwest Passage.

RSA's investigation into the route found that there were spots for a ship to take shelter and that it was relatively accessible by helicopter.

"It was something that really did concern us, but when you're going to do something like this, your ship is of the highest standard and is chock-full of spares should anything go wrong," Teasdale said.

RSA has also insured Nordic Bulk vessels on the Northern Sea Route (NSR), which runs along the northern coast of Russia.

Nordic Bulk said the trip from Vancouver, Canada to Finland saved it $80,000 in bunker costs and allowed it to carry 25 percent more cargo compared with the Panama Canal route.