Ship - Machinery - Insurance

Ship - Machinery - Insurance 

September 2009 

Hull and Machinery Insurance by using exemplary CSES of Machinery 

Damage 

(Speech of Mr. Kay Wetzel for the VHT - Trainingscamp III) 

The following speech will present an overview of the different kinds of damages – insured or 

not insured – to engine equipment on board ships. Therefore please find a brief abstract: 

According to the DTV-ADS, it is not the nature and extent of but rather the cause of damage 

which is pivotal to the question of recovery. Thus, the causality must be established. Please 

also refer to the previous speeches. The incident has to be a “sudden and unexpected” 

incident. 

Furthermore, according to DTV-ADS, the insurance policy covers engine equipment such as 

the main engine - including shaft and propeller, auxiliary engines, cooling plants, deck 

winches and cranes but not piping, fittings, storage or service tanks. 

The insurer pays for damages which occur as a consequence of a covered risk, a latent defect 

caused by material or production defects or a design failure. 

Negligence over a longer period is not covered. 

As a rule, the VHT is assigned to perform damage assessment investigations according to the 

above regulations. Once the damage is established by the VHT, the respective repair and 

spare part costs submitted by Owners are certified by the VHT, as well. In general, there is no 

deduction made for “new for old”; however, for parts which show “normal wear and tear” but 

have to be changed in the course of the repair works’ (e.g. stern tube sealings or underwater 

coating), deductions may be taken into account. 

In general, the following damage descriptions follow the DTV-ADS definitions but do not 

claim to be complete or exclusive. 

These examples will demonstrate that detailed investigations may confirm the insurer’s 

liability, but may also contribute to preventing further damages of similar nature. In case the 

time as well as financial effort involved in establishing a cause of damage becomes excessive, 

the proximate cause of the damage may be found by excluding incidents, which are not 

covered. A main reason to refuse liability is negligence over a longer period which may have 

been excluded e.g. one may determine such by having complete maintenance records 

provided.

VEREIN HANSEATISCHER TRANSPORTVERSICHERER e.V. Seite/Page 2 

Now, I would like to explain the four main types of damage: the „classic“ engine damage, the 

damage caused by a latent defect, wear damage caused by negligence over a longer period of 

time and damage caused by crew negligence. 

„Classic“ Engine Damage 

The two types of damage I refer to in the following were “sudden and unexpected” for both 

the ship’s crew and the owner. Luckily, no person was harmed. 

The VHT damage assessment revealed some surprising facts in which the last determined 

cause of damage confirmed the liability of the insurer. 

The first case shows a severely damaged main engine exhaust gas turbo charger (T/C, built on 

a slow speed two-stroke Diesel engine with 6,930 kW and approx. 100.000 total running 

hours). 

The following photos show the rotor shaft bend at the compressor side bearing journal. The 

turbine blades are severely damaged, broken at their tips or missing completely. The labyrinth 

sealings are destroyed.

VEREIN HANSEATISCHER TRANSPORTVERSICHERER e.V. Seite/Page 3


The compressor wheel is also severely damaged. 

The nozzle ring is severely damaged, as well.


The turbine side bearing shows scores and cracks due to strong heat effects at the thrust 

bearing. The radial bearing material has vanished.


A bearing failure due to lack of lubrication was assumed to be the obvious reason. The T/C 

was repaired by a competent service company some four months before this damage occurred. 

Thus, a lack of maintenance can be excluded. 

It is of particular interest that the present case of T/C damage is the fourth time T/C damage 

caused by a bearing failure has occurred within two years ! In an agreement between the VHT 

and the shipping company, the Germanischer Lloyd Prüflabor Hamburg was asked to perform 

detailed investigation into the damaged T/C. 

In the mean time, the shipping company, and, respectively, the service company found a 

defective regulating flap to be the common cause of all four cases of T/C damage. 

The investigations performed by the GL Prüflabor into the axial bearing, in particular, 

confirmed the probable cause as being an inconsistent supply of lubrication oil. 

The axial bearing cage shows a microstructure which can be used to identify that there had 

been a lack of lubrication at different times. Further investigations of the shipping company 

confirmed this scenario stating that several black outs had occurred before the respective 

cases of damage. 

This case of damage was really sudden and unexpected for the ship’s crew. Such was not 

caused by crew negligence or by negligence of the shipping company. 

This provides an impressive example that further, extensive investigations of the VHT, 

performed without prejudice, confirmed the liability of the insurer.


The second case of damage is a ruptured connexion of an auxiliary engine (medium speed 

four-stroke Diesel engine with 2.210 bhp and approx. 65.000 total running hours). 

The following photos show the auxiliary engine shortly after its break-down and before the 

start of its de-assembly.


The ruptured connecting rod can be clearly seen still hanging inside the engine entablature. 

The lower cover was thrown away. The connecting rod bolt was overstretched, and the 

serration was hammered.



The damage to the entablature is severe. The entablature is punctured above and below the 

opening with a large amount of material being broken off. Furthermore, the cylinder line and 

the entablature’s liner ring are punctured.


The crankshaft was also severely damaged. An approx. 50 mm wide and 5 mm deep „groove“ 

was “worked into” the crankpin. The metal had been overheated.


At first glance, this is a piston seizure probably caused by a lack of lubrication. The pistons 

show clear signs of fretting.


Nevertheless, doubts regarding the damage scenario above remained even though regular 

maintenance (as per maker’s advice) was mainly performed by competent service companies, 

and the lubrication oil treatment showed no irregularities. But only after the de-assembly of 

the auxiliary engine did the real cause of the damage come into light: a partly clogged (by 

debris of unknown nature) rocker arm lubrication oil feedline.


The clogging led to a lack of lubrication at the valve stems and to a seizure of the stems. The 

piston seizure and the following rupture of the connecting rod was, thus, the consequence and 

not the real cause of the damage. 

The multiple surveys and intensive investigations performed by the VHT led to this nonambiguous 

conclusion. As always, technology offers a clear cause & effect relationship. 

Consequently, it must be said that the “classic” kind of engine damage exists insofar that the 

damage is “sudden and unexpected” and unavoidable for ship’s crew and the owner. 

Generally speaking, the costs of such damage are completely covered by the insurer. You will 

hear more information on this topic during Mr. Röder’s speech. 

Latent Defect caused by Production Failure 

The next case of damage can be considered as totally unexpected for the ship’s crew as the 

vessel and the damaged main engine had been in service for only 1.000 running hours when 

the damage occurred! 

Here, the entablature section of cylinder nos. 1 to 3 of a slow speed two-stroke Diesel engine 

with 12.640 kW cracked at several locations. A production/casting failure was anticipated as 

this would correspond with a similar experience in dealing with Chinese-made cast pieces. 

The damages are severe and the entablature cannot be repaired. 

The camshaft roller guide had already been disassembled and sent to the licensor’s laboratory 

for further investigation.


Please note the multiple cracks in way of camshaft bearing no. 1



The disassembled entablature not only shows cracks at various locations but also traces left 

from a massive impact in way of the roller guide’s reversing link track. This leads to the 

assumption of a roller guide having been stuck inside the entablature, which pressed it apart.


The camshaft damage in way of the roller guide reversing link shows the reversing link 

rotated on the shaft.


In fact, the detailed investigations revealed that the reversing link was produced in a way that 

did not correspond with the design drawings. In particular, grooves and channels necessary to 

reduce stress were not done. This is a typical example of production failure.


Again, the extensive VHT investigations indeed make sense to find the true cause of damage. 

At first glance, the entablature section was found to be defective. This very expensive part 

would not have been recoverable under the given circumstances according to DTV-ADS as it 

is the cause of the damage – only the consequential damage repair costs, here mainly bits and 

pieces, would be recoverable. The extensive VHT-investigations showed that the entablature 

section damage was the consequence of a latent defect, which occurred during production of 

the reversing link (red part in the photo above). Now, the non-recoverable part is the reversing 

link. The costs for this extremely expensive entablature section are now to be considered as 

consequential and, therefore, covered by the insurer. 

Wear as Consequence of Negligence 

Luckily, negligence is very seldom the cause of damage in the VHT’s work. 

However, the following example is a very impressive one as it is NOT concerned with a 

„sudden and unexpected“ incident. 

The damage occurred at a slow speed two-stroke Diesel engine with approx. 10.000 PS. 

One cylinder unit cracked due to a loss of cooling water, which was noted by the crew.


Obviously, the lack of cooling water led to overheating and the cracking of the entablature 

and the cylinder liner. 

However, the cause of this lack of cylinder cooling water was also just as obvious. The 

cooling water expansion tank showed that it had suffered from an insufficient water flow and, 

thus, was not possible to be checked, at all. The sight glasses of the expansion tank were 

defective; the quantity of water flow was too little, and the temperature was not possible to be 

checked owing to the defective thermometer.



This was not the only deficiency on board, respectively, in the engine room. The burnt-out 

auxiliary boiler was damaged and had not been repaired for weeks. Its manometers no longer 

had any labelling. The switch boards near the boiler were burnt out, as well, and, of course, 

not repaired.


The overall condition of engine room left a lot to be desired – it was dirty and oily, e.g. at the 

gearbox and the engine room.


Spare parts such as lubrication oil filter cartridges were left lying around, totally unprotected.


Only the broom was clean … 

These photos give an impression of the overall condition of ship and engine room. The 

obvious deficiencies might have even led to further damages. 

Nevertheless, only the causative link between the lack of cylinder cooling, the overheating of 

the cylinder entablature and finally the cracking of the cylinder block is of importance for the 

VHT. 

Moreover, the insurer is interested in a properly functioning and sound technical condition of 

his insured object – the ship. All deficiencies on board this ship were had already been noted 

on a previous occasion, and the insurer asked the owner to make corrective actions. A later 

inspection several weeks thereafter showed that none of the deficiencies had been corrected. 

Consequently, the insurer did not prolong the insurance contract. 

Damage due to Crew Negligence 

At first glance, the next case of damage showed a different picture than the VHT investigation 

later revealed. 

Please note that crew negligence is not a wilful and grossly negligent action. Crew negligence 

is considered to be a “mistake made in the heat of the moment” by the ship’s crew. 

This main engine damage developed totally unexpectedly for the owners even though they 

had an overhaul of the main engine carried out only one year prior to this incident. The 

obvious problems were exhaust gas temperature deviation, dried sticky piston rings and 

excessively worn injection elements. 

Extensive damages to the main engine were discovered during a regular yard stay.


Broken piston rings were the first indication of a developing case of damage which were 

discovered when the ship was still sailing. 

Once the main components of the main engine were removed, extensive damage to the piston 

rods became obvious. Their surface was planed by the debris caught in the stuffing box 

elements.



The piston rings were sticking inside the ring grooves and were grinded down, partially 

„welded“ into the ring grooves.



The cylinder liner only shows vertical scores below the top ring area, no longer any honing 

traces, though.


Replica taken from the cylinder liner surface show traces of Catfines. This discovery can well 

explain the damages found at the main engine. However, the fuel analyses did not show any 

presence of Catfines beyond the specification. 

An increased amount of aluminium and silicate was found in a fuel taken some months ago 

and documented with the fuel test report. Furthermore, an extremely high flushing frequency 

of the automatic fuel backflushing filter was noted. This led to the assumption of defective 

separators and/or automatic back flushing filters. Detailed inspections of these aggregates 

revealed no technical damage to them. 

In the end, interviews of the crew showed that the fuel in question was not treated as 

recommended by the fuel test service. Only one separator was used where two should have 

been used in parallel. This would increase capacity and reduce the flow to get as much debris 

out of the fuel as possible. 

This is clearly a case of crew negligence which occurred in spite of the clear instructions of 

the fuel test service ordered by the shipping company. Please note that, depending on the Hull 

& Machinery policy, a deduction of 10 % of the repair costs may sometimes be agreed if the 

crew is negligent. 

All of the examples above provide an overview to the different types of damage listed in 

insurance conditions. Furthermore, it becomes more and more obvious that the cause of the 

damage at first glance might not be the root cause. Thus, further thorough an dopne minded 

investigations are advisable. 

„Classic“ engine damage was explained using two examples – the damage to the exhaust gas 

turbo charger and the parted connecting rod. Both examples show that the cause and the 

resulting damage are directly linked. Often, this cause is not obvious but has to be carefully 

investigated by the VHT. The duty of the VHT is to be open-minded and impartial in regard 

to both the insurer and the owner. 

The importance of an impartial damage assessment becomes much more evident when 

looking at the damage caused by a latent defect. Here, the obvious cause of the damage is a 

production defect at the cylinder block. Consequently, the costs of the cylinder block and its 

removal would not be covered by the insurance. The financial loss for the owner would be 

enormous. 

However, the VHT investigations made clear that the damages to the cylinder block are a 

consequence of the failure of another – not very costly – part of the engine. Thus, the cost of 

the damaged cylinder block and its replacement are recoverable. 

The example of neglecting the necessary maintenance of a ship and its equipment and the 

resulting damage to the main engine shows that not every case of damage can be covered by 

the insurance policy. Damage repair costs caused by negligence of the owner should not 

become a burden to all companies insured. 

The last sample shows that even when owners are taking care of the technical equipment of 

their ship in each and every respect, a case of damage may be caused by a sudden failure of 

the crew. It is of importance to identify and verify such wrong actions and at the same time 

motivate the owner to train their crew to avoid further damages.


In conclusion, it has to be pointed out that the VHT has to perform damage assessment 

impartially and without prejudice. Usually, these investigations confirm the liability of the 

insurer in the most instances. 

Some more detailed explanation as to the certification of the damage-related repair costs and 

general expenses will be presented in Mr. Röder’s speech. His speech will show the costs of 

damage taking into consideration the different causes of the damages as described in this 

speech. 

oOo

Ship - Machinery - Insurance - VHT

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