Operational Risk
A fundamental requirement for any successful ship manager is ensuring the efficient and uninterrupted operation of customers’ vessels and minimising for the customer the risks associated with the day to day operation of their vessels, such as Port State detentions or marine incidents.
CS Maritime closely monitors its performance through the use of its proprietary Ship Sure ERP platform (which is described in more detail below) to ensure that the highest standards of service are delivered consistently to customers. As part of this process, a range of Key Performance Indicators are generated and regularly analysed to allow an assessment of the Company’s performance at various levels (e.g. by vessel, fleet officer and division), including indicators of operational safety and crewing, technical, purchasing and financial performance.
CS Maritime mitigates its operational risk exposure through conducting customer due diligence and vessel inspections as part of a risk assessment exercise prior to taking on new business.
Should any incident nevertheless occur as a result of CS Maritime negligence, gross negligence or wilful misconduct, the contract provides for liability to be limited between CS Maritime and the ship owner to an amount typically equal to 10 times the annual fee earned for the management of the individual vessel. Such potential liability is covered through CS Maritime full Errors, Omissions and Indemnity insurance provided by the International Transport Intermediary Club, which covers all of the Company’s ship management contracts and provides cover of up to US$20 million per claim, with a deductible of US$100,000 per claim. Further details of the Company’s contractual and insurance arrangements are set out in the Corporate Matters section of this Memorandum.
