The ongoing multibillion-dollar expansion of the Panama Canal carries a host of risks for the marine insurance industry as larger and higher valued ships will travel the 50-mile waterway with much bigger loads.

The at least $5.2 billion widening project, slated for completion in 2015, also will force coastal ports in the United States to install different equipment to accommodate and unload the larger ships.

In addition, marine market sources worry the canal expansion could bring an increase in pollution and security risks.

This hallmark maritime project, which has been underway since 2007, came to a standstill early this year because of project cost overruns and financial difficulties of the European building consortium, Grupos Unidos por el Canal.

To avoid a lengthy work stoppage, in February Zurich North America agreed to provide a construction surety bond, which sources said is worth at least $400 million, to enable the canal expansion to resume.

“Zurich worked diligently with the ACP (Autoridad del Canal de Panama) and GUPC (Grupos Unidos por el Canal) to reach an agreement on the matter and, fortunately, the two sides have had a successful negotiation,” Michael Bond, head of surety at Zurich North America, said in a statement.

The Panama Canal Authority's insurance program is led by Munich Reinsurance Co. acting as the primary insurer, and Zurich Insurance Group Ltd. Willis Group Holdings P.L.C. is the broker.

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In addition to the co-lead insurers, elements of the coverage are placed with international and domestic markets, sources said.

As a co-lead underwriter, Munich Re has to ensure robust risk management procedures are in place during the canal expansion project and that experiences are shared to ensure a successful outcome, said Joachim Pawellek, a senior engineering underwriter at Munich Re in London and risk engineer for the project.

Today, the 100-year-old canal can accommodate only ships carrying about 5,000 containers. After construction of new locks on both ends of the canal and widening and the man-made passage, vessels transporting 12,000 containers or more will be able to navigate it. These so-called new-Panamax ships are as long as four football fields and more than 160 feet high.

“Not only are vessels' hulls going to be of higher value, but the amount of cargo that they are going to have is something we worry about,” said John Phillips, Houston-based vice president of marine hull for Liberty International Underwriters, a unit of Liberty Mutual Holding Co. Inc. “We can now have many more insureds having their cargo intermingled on one ship.”

“Larger amounts of commodities will be transferred on a single vessel,” said Stavros Costarangos, Panama City-based executive vice president and partner at insurance broker Padeco Seguros S.A. This increases the concentration of insured values transported on one ship, sources said.

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Potential accidents involving the bigger ships could mean higher insured losses, said Stephen Harris, senior vice president of the marine practice at Marsh Ltd. in Norwich, England. And if accidents do occur, he said, there may an insufficient number of qualified, experienced salvage experts to handle the new-Panamax ships.

In addition to concern about the salvage industry's ability to handle an incident involving one of these larger vessels, such accidents could impede traffic at major ports in the U.S. and elsewhere, said Tim Donney, global head of marine at Allianz Global Corporate & Specialty in New York.

The expected increase in the tonnage of container ships and bulk carriers passing through the wider and deeper canal also could be of concern for the insurance market, Mr. Harris said.

For example, the project is particularly important to the United States. because it will enable U.S. energy firms to export liquefied natural gas on hulking gas tankers to Asia via the Panama Canal.

Also, increased marine diesel oil and petroleum coke being transported through the canal could pose heightened pollution risks, Mr. Harris said.

With the canal's strategic and commercial importance for the U.S. and other nations, political and security risks also could increase, he said.

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Meanwhile, the scale and complexity of the canal project poses several underwriting challenges, Mr. Pawellek said, citing keeping cool the massive amount of concrete being used, maintaining the continuity of workers on the project and contending with various risks of subcontractors.

But the project's insurance program has run well with no major losses, said one London-based broker who asked not to be named.

Mr. Costarangos said the project's effects also will be felt on land. U.S. East Coast and Gulf Coast ports are upgrading their infrastructure to handle goods transported through the canal on larger vessels, he said.

Still, underwriters are concerned about construction risks because U.S. ports will have to install cranes large enough to handle loading and unloading the big new-Panamax ships. And there are additional concerns regarding the potential for ship collisions in port, Mr. Harris said.

That means port and shipping workers must undergo training, Allianz's Mr. Donney said.

Another underwriting concern is high concentrations of insured goods could be sitting on bigger ships in U.S. ports and terminals, many of which are exposed to hurricanes, Mr. Donney said, noting a large portion of Superstorm Sandy losses in 2012 were due to storm surge that flooded ports in the Northeast.

The bigger ships going through the wider canal could result in fewer vessels using the waterway, said LIU's Mr. Phillips.

But the value of bigger ships will be much higher and there likely will be stiff underwriting competition to cover these vessels.

“There's more insurance capacity now in the marine market than there has ever been,” Mr. Phillips said. “So you have more insurers fighting over fewer clients.”