Maritime Insurance and Liability in a Changing Risk Environment in India

A unique convergence of the technological revolution, the ambitions of the shipping sector towards decarbonization, and geo-political tensions are unbalancing the Indian shipping industry and forcing change. The incorporation of Artificial Intelligence in autonomous ships, smart ports, and the vision outlined for Maritime India Vision 2030 and at key terminals such as JNPT and Adani Mundra, shifts the locus of liability in tort from human error to complex product and software liability. The maritime shipping industry’s use of ammonia and hydrogen as alternative fuels to decarbonise the industry will almost certainly pose new, unquantifiable risks, and thus, unparalleled underwriting challenges for underwriters in India. These risks are largely a function of unquantifiable fire and loss histories. The risks created by the decarbonised, unmanned shipping vessels and the extended use of unmanned aerial vehicles (drones) in the shipping sector will magnify the limitations posed by the Marine Insurance Act, 1963, the underwriting and indemnity legal canon of shipping which inscribed the legacy of the fossilised and manned shipping industry. To ensure a healthy Indian maritime environment that is still insurable in the age of unprecedented transitional change, it is therefore essential that Indian insurers, regulators technologists and lawyers work together to develop innovative insurance products, responsive underwriting programs, and new domestic legal frameworks that can provide certainty and clarity.