When the containership Dali struck the Francis Scott Key Bridge in Baltimore on 26 March 2024, killing six construction workers and causing the bridge’s catastrophic collapse, it set in motion one of the most consequential insurance and maritime liability disputes in recent memory. Total claims are estimated to exceed $5bn, and with a civil trial now imminent. 

Judge James Bredar having admonished all parties to be ready to proceed on 1 June 2026, the litigation raises questions that every marine insurer, property underwriter, and reinsurance market participant should be tracking closely.

Background

The Dali, owned by Grace Ocean Private Limited and operated by Synergy Marine Pte Ltd, collided with the bridge in the early hours of 26 March 2024, causing its total collapse and bringing shipping at the Port of Baltimore to a complete halt. The state of Maryland, which filed claims in federal district court in September 2024, alleged negligence, mismanagement, and the “reckless operation of a vessel that was not seaworthy and should never have left port”.

The insurance settlement: ACE American pays out $350m

ACE American Insurance Company, which had underwritten the property coverage for Maryland on the Francis Scott Key Bridge, informed the court during a status hearing that it had reached a settlement of $350m with Grace Ocean and Synergy Marine Group. The amount is reported to equal the $350m paid to Maryland in the weeks following the incident as the maximum liability under the policy.

Whilst Maryland received the $350m in insurance proceeds, under the law it can still seek further claims above the value of the insurance payment, meaning the insurer’s settlement does not extinguish the state’s ongoing civil proceedings. For insurers, this underscores the importance of understanding precisely how policy limits interact with the assured’s right to pursue independent recovery from tortfeasors, and whether subrogation rights have been adequately preserved.

Maryland’s $2.5bn civil settlement

The state of Maryland has separately finalised a $2.5bn settlement with Grace Ocean and Synergy Marine, resolving civil claims brought on behalf of the state and its agencies, including the Maryland Transportation Authority, the Maryland Port Administration, and the Maryland Department of the Environment.

The settlement came following a ruling in January 2026 that allowed Synergy to proceed with its claims under the Shipowners’ Limitation of Liability Act 1851, an 1851 maritime law that limits liability for shipowners. Under that law, a shipowner’s liability for a maritime loss is limited to the value of the ship and her pending freight, provided the mishap occurred without the privity or knowledge of the owner. In this case, the stipulated value of the Dali is $43.7m. The practical consequence of invoking the Act was a powerful negotiating lever: Grace Ocean and Synergy faced a theoretical liability cap of approximately $44m if they succeeded at the limitation trial, against claims in excess of $5bn. The $2.5bn settlement, whilst enormous in absolute terms, must therefore be assessed against that litigation backdrop.

Grace Ocean also argued that state officials bore “significant liability and fault” given decades of records showing the state failed to adequately protect the bridge, which was built in the 1970s with minimal pier protection. This contributory negligence argument will remain relevant in apportioning liability between remaining defendants.

The civil trial: What to expect

Judge Bredar established a two-phase process: the first phase will hear arguments on the limited liability claims made by Grace Ocean and Synergy under the Limitation of Liability Act of 1851; based on the outcome, the second phase will seek to apportion liabilities between the parties. The civil trial is a bench trial, meaning it will be heard by the judge and not go before a jury.

The trial is expected to run for several weeks and draw on hundreds of hours of depositions, as well as testimony from crewmembers who have been retained in the United States throughout the proceedings. Critically, the National Transportation Safety Board’s (NTSB) conclusions regarding defects on the ship and its maintenance cannot be directly cited during the trial, though the parties will be able to draw on the underlying evidence the NTSB collected.

It is possible that further parties to the case could reach settlements in the coming weeks, but the bulk of the case is expected to proceed to trial.

Criminal charges

The announcement of Maryland’s settlement came on the same day that the US Government filed criminal charges against ship operators Synergy Marine Pte Ltd and Synergy Maritime Pte Ltd, along with Radhakrishnan Karthik Nair, an Indian national who served as the technical superintendent for the Dali. The three have been charged with conspiracy, wilfully failing to immediately inform the US Coast Guard of a known hazardous condition, obstruction of an agency proceeding, and making false statements. Synergy Marine Group strongly criticised the move, accusing the Department of Justice of “criminalising” what it described as a tragic accident, and has indicated it will “vigorously” defend itself and contest the charges at trial.

For insurers, the existence of parallel criminal proceedings is a material consideration: findings in the criminal case, or adverse publicity arising from it, could affect the conduct and tone of civil litigation, the willingness of defendants to settle remaining claims, and the availability and credibility of witnesses.

Claims against the Shipbuilder: A further front

Maryland’s settlement does not resolve the state’s claims against the shipbuilder, Hyundai Heavy Industries. The National Transportation Safety Board, in a report published in November 2025, found Hyundai to be at fault in causing the Dali’s loss of power and its crash into the bridge, and the state has confirmed it intends to pursue those claims.

In a separate case, Grace Ocean and Synergy have also sought to sue Hyundai Heavy Industries, claiming defects in the construction of the ship, which was built in 2015. Hyundai has sought arbitration, citing the age of the vessel and the years of maintenance carried out after it left the shipyard.

This second front is particularly noteworthy for product liability and construction defect insurers: it raises questions as to (i) whether defects in the original design or construction of the vessel can be apportioned as a contributing cause of the loss, and (ii) whether those risks were adequately underwritten at the time the vessel was built and launched.

Key takeaways for insurance market participants

• Policy limits and subrogation: ACE American's $350m settlement with the vessel interests represents the maximum liability under the bridge insurance policy. Insurers should satisfy themselves that their subrogation rights are clearly preserved and enforceable following any payment, and that settlement agreements with vessel interests are structured so as not to inadvertently compromise those rights.

• The Limitation of Liability Act 1851 as a settlement driver: The Act limits a shipowner’s liability to the post-accident value of the vessel and pending freight where the mishap occurred without the owner’s privity. In this case, approximately $43.7m. The prospect of a defendant successfully invoking the Act fundamentally affects the risk calculus for all parties. Insurers advising assured vessel owners should ensure that coverage structures and legal strategies account for the potential application.

• The rebuilding cost exposure: Costs of the bridge replacement have skyrocketed and completion is not now expected before 2030. Estimates to rebuild Baltimore’s Key Bridge have doubled to $5bn. Infrastructure insurers and reinsurers should note the scale of escalation between initial loss estimates and final replacement costs and consider whether reinstatement provisions in property policies adequately address major civil engineering projects of this nature.

• Criminal proceedings and their insurance implications: Charges of conspiracy, wilful failure to report a known hazardous condition, and obstruction of agency proceedings raise important questions about whether and to what extent criminal conduct by an operator’s employees may affect coverage under marine and liability policies, particularly where policies contain exclusions for deliberate or wilful acts.

Conclusion

The Baltimore bridge collapse litigation represents a convergence of catastrophic physical loss, complex maritime law, multi-billion-pound settlement dynamics, and parallel criminal proceedings rarely seen in a single incident. With claims estimated to exceed $5bn and a two-phase trial beginning on 1 June 2026, the case will continue to generate important legal developments for marine, property, and liability insurers alike.