In the Amazon basin and along the Brazilian Atlantic coastline, waterway transportation is often the only means for passengers to reach remote villages and small coastal islands. In low-income regions where no road or railway infrastructure is in place, sailing is the only de facto transport available.
In August 2017 two fatal accidents caught the public's attention:
- a passenger vessel carrying 52 people sank in the Xingu River in the state of Pará, causing the deaths of 23 people; and
- a passenger ferry capsized near Salvador in the state of Bahia, killing a further 18 people.
Several passengers sadly remain missing in both cases. Following these tragic events, the discussion surrounding the mandatory insurance for personal injury caused by vessels or their cargo (DPEM) has gained much-needed attention.
Federal Law 8.374/1991 provides that all vessels registered before Brazil's port captaincies must buy DPEM insurance. In theory, uninsured vessels are ineligible for licensing and are therefore unauthorised to sail in Brazilian waters. The logic behind this compulsory insurance is similar to that which governs the mandatory insurance for personal injury caused by motor vehicles (DPVAT), regulated by Federal Laws 6.194/1974, 11.482/2007 and 11.945/2009. Whether on land or water, compensation for personal injury and medical assistance costs, permanent disability or death is payable to any person – passenger or not – who has endured damages caused by the vessel or vehicle, or its cargo. In case of death, payment is made to the individual's family.
Unfortunately, such accidents occur frequently and DPEM insurance was intended to soften the burden borne by victims and their families. However, unlike DPVAT insurance – which is a lucrative policy for insurers, managed by the consortium Seguradora Líder – DPEM insurance was recently discontinued due to a lack of insurers interested in underwriting the risks and offering the policies provided for in the law. In fact, DPEM insurance is no longer compulsory, as Federal Law 13.313/2016 (in accordance with Navy Instruction 04/2016) states that if no insurers offer the policy, the Maritime Authority cannot demand that vessel owners purchase the insurance. Vessels are therefore operating without DPEM insurance, despite the National Insurance Brokers Federation's and the Federal Insurance Regulatory Authority's best efforts to see the policy offered.
Any mandatory insurance fulfils a social purpose; however, the law alone cannot ensure that the policy will be offered. Several proposals have been made to overcome this issue, including unification of the compulsory DPVAT and DPEM insurances under the auspices of Seguradora Líder, which would be arguably more efficient at managing the policies and interests involved in the sector. What is certain, however, is that industry players and the government must break the present stalemate to ensure that families who are often considerably underprivileged are no longer left adrift.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
For further information on this topic please contact Iwam Jaeger Jr or Bernardo Silva de Senna at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email ([email protected] or [email protected]). The Kincaid | Mendes Vianna Advogados website can be accessed at www.kincaid.com.br.
