P&O Cruises could face a lengthy court battle with its insurers over compensation pay-outs to passengers of the ill-fated cruise ship Aurora, industry experts warned.
The company's insurers would cover the cost of the mechanical fault which forced the ship to come to a standstill off the coast of Devon, P&O has confirmed.
But whether P&O will be forced to pay its own £22m compensation bill will be determined by the interpretation of a vital clause in its contract with the third-party liability insurer.
P&O's insurer Bermuda-based UK Mutual Steamship Association could be liable under the rules of its own protection and indemnity club, according to a market source.
The rules stipulate that the club must pay out if damages arise "as a consequence of a casualty to that ship. Experts say liability depends on whether the event can be defined as a "casualty".
P&O could end up in the middle of a legal case in an attempt "to claw back some cash," the source warned.
