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All in a day’s work: Struck iceberg, sank, yadda yadda yadda

Sat Apr 19th, 2014 on     Insurance Claims,    

The insurance claim form for the Titanic is going up for auction in the next week or so. It’s an interesting document, and not just for insurance types. The four pages completed by Second Officer Charles Lightoller offer a surprisingly clinical description of the disaster. Lightoller may have had a reason for his ho-hum tone, or he may have simply had a “Just the facts, ma’am” moment.

The claim form sounds like a good read at the very least, especially in retrospect. “All went well until about 11.45pm of April 14, 1912,” Lightoller wrote, “when … the ship came into collision with an iceberg.” As we mentioned in our last post, Lightoller said there was a little jar and a little grinding noise on impact. Then: “On examination it was found water was coming into several compartments.” It’s a little disconcerting.

One thing is certain, though: What he wrote convinced the insurer to pay the full coverage amount of $5 million, about $485 million today. The White Star Line (or its parent company) was required to pay the deductible of $750,000. The claim was paid within 30 days.

We should note, as well, that there were, in fact, multiple insurers. The ship apparently was too great of a risk for one company, so brokers pulled together coverage from 77 insurers.

Without having a good look at both the claim form and the policy — and perhaps a crystal ball — we can only speculate about the thinking behind Lightoller’s account. As a company man, he would have wanted to — or been directed to — make it clear that striking the growler and sinking was an act of God.

If there had been any negligence or, worse, any deliberate act of an officer that caused or contributed to the disaster, would the claim have been denied, in all or in part? Nowadays, of course, insurance policies regularly exclude intentional acts that cause damage. You cannot set fire to your house and collect the insurance payout.

Negligence, though, is trickier, especially when it involves multiple fatalities (upwards of 1,500) in an “unsinkable” liner. The tone and the insistence that the crew did nothing wrong could also have been an inoculation from other lawsuits. Those third-party liability claims, though, may be the subject of future auctions, and future posts.

Sources: 

Insurance Business America, “Titanic officer “played down” iceberg collision to collect insurance,” April 15, 2014

Western Daily Press, “Titanic insurance claim form for auction in Wiltshire reports ‘slight jar’ from ‘small iceberg’,” Tristan Cork, April 12, 2014

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