Compulsory civil liability insurance,financial security: An integral component of compensation for ship-source oil pollution damage

Abstract

Oil pollution damage caused by oil spills at sea generally occurs on a large scale across numerous regions and countries, causing significant harm to marine ecosystems as well as worldwide economic loss. The costs are so severe in many instances that the owner of the ship responsible for the pollution cannot afford to pay compensation to those who have suffered loss. As a consequence, the need to cover oil pollution damages has given rise to compulsory liability insurance, which provides a financial guarantee against the costs of oil spills. Compulsory civil liability insurance has therefore become an indispensable part of the liability regime for owners of oil tankers and bunkers.