They also lose any claim to the cargo as well if they bankrupt the ship. It’s the same idea as buying an umbrella insurance policy, if you suffer a major loss, you lose the asset, but you don’t lose anything else.

But I agree, we should probably have tighter standards on what qualifies for liability protection, as well as a record of past abuse of liability protection to prevent future abuse (i.e. your LLC application would be denied if you’ve bankrupted too many prior companies). So we should be stopping this at the source, not retroactively removing the liability protections because the government made a stupid contract.