What are the most common risks for the marine industry?

Physical loss or damage to property that is owned, or for which an insured has responsibility at the time a loss or damage occurs, is considered the main (and most obvious) area of risk exposure. Fire, explosion, or ‘perils of the sea’ risks such as grounding, stranding, sinking, and capsizing, would be major risks for vessels. In some locations, war, strikes, piracy, or ice damage also pose risks. For goods being shipped by sea, there are the added risks of transit or wetting damage, theft, or short delivery – and all are common loss events. In addition to physical losses, liabilities incurred during maritime operations are a major risk exposure.

What specific risks and challenges are facing ports and terminals?

As economies emerge from pandemic restrictions, the health of port employees and visiting crews remains a major challenge. New ways of working, new technologies, and digitization present further challenges, but opportunities as well. Congestion and environmental regulations are also significant issues.

How has the COVID-19 pandemic impacted the global maritime and logistics industry?

Increased demand for speed and data, decreased income, delays in port, cargo accumulations, healthcare crises on vessels and in ports, and changes in trading patterns due to global health precautions have all been exacerbated by the pandemic.

How is the maritime community addressing the health and well-being of seafarers during these uncertain times?

The physical and mental well-being of seafarers is a top priority for the maritime community, more than ever. The Neptune Declaration, which aims to protect and promote the safety and well-being of seafarers, was recently issued. Many seafarers were stranded on vessels far beyond their employment contract date, leading to profound safety and emotional well-being risk. Marsh, along with more than 800 organizations, has signed the Neptune Declaration and in doing so is committed to bettering conditions for these essential workers.

Marine

Widespread uncertainty and a changing environment present novel challenges as well as opportunities for growth in maritime finance, shipbuilding, shipping, ports and terminals, cargo, and logistics.

Maritime and logistics industries face today’s unprecedented levels of global uncertainty.

Ship owners and operators, maritime financiers, shipyards, ports and terminals, logistic companies, and service organizations work as an ecosystem that underpins global supply chains, moving cargoes via hundreds of millions of digital and physical interactions every day.

As industry dynamics evolve, factors such as vertical integration, customer demands for faster service and real-time information, and increasing environmental standards and industry regulations are driving change. Coupled with technological advances and the proliferation of big data, there is a heightening and proliferation of risk .

Maritime and logistic companies also face unexpected risks, including conflicts, attacks on ships, cyber threats, and supply chain disruptions caused by delays, backlogs, and a changing trade landscape.

This dynamic landscape necessitates swift adaptation by organizational leaders. These businesses must also navigate the insurance market response to changing capital inflows and losses, which can influence pricing, ability to cover risks, and claims resolution processes.

With the right insights, customized i nsurance programs, and targeted risk mitigation strategies, maritime and logistics companies can more effectively navigate the changing risk landscape to minimize losses and liabilities, while looking to capitalize on opportunities to future-proof growth and resilience.

Marsh’s global team of industry specialists has the scale, scope, and capabilities to solve a variety of risk issues facing organizations in the maritime and logistics ecosystem. Our capabilities in all subsectors of the maritime and logistics ecosystem allow us to provide the insights and perspectives across the value chain.

Aerial view red cargo tanker ship vessel at port with marine loading arms, Global business oversea commercial trade logistic import export oil and gas petrochemical from refinery industry transport worldwide.

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FAQs

Shipping companies typically seek insurance coverage for a range of risks, including hull damage, machinery damage, liabilities arising from vessel operations (such as those to crew and third parties), and “perils of the sea” including grounding, stranding, sinking, and capsizing. In some locations, war, strikes, piracy, or ice damage also pose risks.

Shipyards generally hold title to the vessels they build and therefore will look to insure against manufacturing-related risks that lead to damage, such as fire, as well as standard shipping perils encountered during sea or port testing. Ship repair yards often purchase liability coverage for the vessels in their charge and that they work on.

Maritime financiers look to insure the assets they have capitalized against these perils in case the vessel owner’s insurance coverage lapses or proves insufficient. Logistics companies often buy property and liability coverage, and many companies operate across multiple subsectors, thereby facing a multitude of these perils.

Ports and terminals typically purchase property coverage for their owned assets and liability coverage for third-party property and cargoes they handle and store. Promoting the health and safety of their workforce and visiting crews remains a major challenge. While new ways of working, emerging technologies, and digitization can introduce complexities, they also offer opportunities. Additionally, congestion management and compliance with environmental regulations can present concerns for ports and terminals.

Cargo insurance primarily offers protection against accidental physical loss or damage while goods are in transit. Policies may also reimburse a cargo owner for general average or salvage charges that the owner may be obligated to pay. It may be extended to cover goods in temporary storage, during their overall transit along the supply chain, including in inventory at their place of origin — this is called a stock throughput policy .

In addition to physical losses, liabilities incurred during maritime operations are a major risk exposure.

Shore-based employees in the maritime and logistics ecosystem generally operate under local employment regulations. However, for those working onboard ships in international waters, this distinction is often blurred. The physical and mental well-being of seafarers has become a top priority for the maritime community. For example, during the COVID-19 pandemic, many seafarers were stranded on vessels well beyond their contractual employment date, posing safety and emotional health risks.

The Neptune Declaration, issued on January 25, 2021, with the goal of safeguarding and promoting the safety and well-being of seafarers. Sponsored by leading commercial entities and international maritime agencies, the declaration underscores a collective commitment to improving conditions for these essential workers. Marsh, along with over 800 organizations, has signed the Neptune Declaration, reaffirming our commitment to supporting and protecting seafarers.

Global leadership

Our global team serves clients of all sizes, including those with international operations seeking to spread risk worldwide. With specialists in every major insurance hub, we work directly with insurers across global markets to present risks and deliver results aligned with client goals. Our presence in key locations allows direct access to insurance capital worldwide. This approach allows us to have better oversight of client information, helps maintain consistent standards, and supports greater transparency. It also assists in identifying potential opportunities for insurance and reinsurance arbitrage and in optimizing reinsurance structures when appropriate.

Marine

Maritime and logistics industries face today’s unprecedented levels of global uncertainty.

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Global leadership

Marcus Baker

George Jones

Mark Cracknell

Matthew Yeshin

Janice Kowell

Thiago Gonçalves

Michael Walls

Jay Payne

Koen van Leuven

Dirk Segers

Costas Joannides

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Marine

Maritime and logistics industries face today’s unprecedented levels of global uncertainty.

Marine, cargo, and logistics trends report

Our expertise

Cargo & Logistics

Featured insights

Managing tariff impacts on supply chain and business operations

Navigating risk: What clients need to know

P&I club’s: Sustainability report overview summary

620+

35

US$4.2

FAQs

What risks in the marine industry are common to insure?

What specific risks and challenges are facing ports and terminals?

What is cargo insurance?

How is the maritime community addressing the health and well-being of seafarers?

Global leadership

Marcus Baker

George Jones

Mark Cracknell

Matthew Yeshin

Janice Kowell

Thiago Gonçalves

Michael Walls

Jay Payne

Koen van Leuven

Dirk Segers

Costas Joannides

Abhijit Naik

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