The Bangladesh Shipping Corporation (BSC), the state-owned oceangoing ships management authority, has made an insurance claim of around $22.4 million from the Sadharan Bima Corporation for the Banglar Samriddhi ship, which has been abandoned in Ukraine after a rocket attack.

This is the first major insurance claim to be made as a result of the Russia-Ukraine war, reported Reuters, citing government officials.

The BSC rented the vessel to Danish firm Delta Corporation. The bulk carrier, Banglar Samriddhi, which belongs to the shipping corporation, arrived in Ukraine on Feb 22. Russia invaded the country on Feb 24 and a rocket struck the vessel on Mar 2, killing one of the crew. The rest of the crew members then abandoned the ship at Olvia port. They were moved out of Ukraine into Romania safely.

The attack heavily damaged the ship’s navigation bridge. Fire from the explosion also damaged other parts of the ship. The BSC bought the ship for $26.3 million around three and a half years ago. After depreciation, officials said, the ship is valued at $22.4 million.

People involved in the shipping sector say the funds required to repair and bring back Banglar Samriddhi home will exceed its current value, while the owner can get the same amount from the insurer. Maritime lawyer Captain Mohiuddin Abdul Quadir says the BSC needs to decide whether to repair the ship or buy a new one with insurance claims. The insurance company will give its opinion after analyzing the BSC’s notice.

Captain Mujibur Rahman, a general manager at the BSC, confirmed that Banglar Samriddhi has war-risk insurance coverage.

Captain Meherul Karim, who has worked with companies that run shipping businesses in Bangladesh, said the value of a ship is considered as the insurance. “All BSC ships have war-risk coverage. The ship is abandoned now. So it is better to claim the insurance money instead of rescuing it.”

Therefore, buying a new ship with the insurance money will be more profitable than repairing it amid the uncertainty of war.

Meanwhile, the United Nations shipping agency said last week that a corridor would be set up to take merchant ships stranded in the Black Sea and the Sea of ??Azov to safety. However, various sources associated with the shipping company have claimed that the process is progressing very slowly. Four more ships were recently hit by missiles and one of them sank.

Insurance premiums for travel to the region have risen more than 100 percent since the war began. Insurers expect more compensation from the region, which could increase costs for companies.

The last war risk ship casualty involved the Liberian-flagged, Japanese-owned oil products tanker Mercer Street, which was damaged by a suspected drone attack off Oman, killing two crew members in July last year.

Between 1980-2020, fewer than 10 ships of greater than 100 gross tons were total losses in attacks, according to data analysis by insurer Allianz Global Corporate & Specialty.