Whipped Cream Difficulties

I was thinking about insurance.

This is a short film from the 1980s about Lloyd’s of London and how it works.

Something that I find kind of interesting is the Lloyd’s Open Form (LOF). The basic idea is: if something comes up at sea that requires a salvage operation, the two parties (the one being salvaged and the one doing the salvaging) sign a LOF.

The LOF is called “open” because it specifies no particular sum for the salvage job. Indeed it may not specify a sum, as salvage is not a “contract for services”, but an agreement to provide a service in the hope of a “reward” to be determined later by an arbitration hearing in London, where several QCs practising at the Admiralty Bar specialise as maritime arbitrators.

One of the key aspects of the LOF is: “No Cure, No Pay.”

Traditionally, the salvage reward has been subject to the salvor successfully saving the ship or cargo, and if neither is saved, the salvor gets nothing, however much time and money has been spent on the project.

Back in 1978, an oil tanker, the Amoco Cadiz, ran into some problems: it encountered a storm that damaged the rudder and caused a hydraulic fluid leak. The captain called for assistance: the responding salvor wanted the captain to agree to a LOF.

One of the books I’ve read on the subject states that the captain was resistant to signing a LOF, as he felt he’d be signing an open-ended commitment, while the salvors were reluctant to proceed without a LOF. Ultimately, the captain agreed, but the situation had deteriorated…

…and the Amoco Cadiz ran aground off the coast of Brittany and dumped over 220,000 tons (metric) of oil into the sea.

Semi-related, because we’re talking about oil: “Fires of Kuwait”. For once, something in high-res.