Marine Insurance

(from AMSA Report 2009)

Arctic shipping will not be sustainable without the availability of marine insurance at reasonable commercial rates. Unlike most other areas of shipping, the practice of marine insurance is not regulated in an international convention. A business and private law matter, marine insurance is legislated at the national level, for example, Canada and the Russian Federation; and occasionally at a sub-national level, for example, the United States. Insurance practices are driven by international insurance markets. Of particular significance for Arctic shipping is protection and indemnity insurance, offered through P & I Clubs. Until recently, Russian Federation shipping in the Arctic tended to be insured under state schemes, and now P & I coverage is a requirement for trading on the Northern Sea Route.

Although most of the risks associated with shipping are well known and understood by insurers and assureds alike, the risks associated with polar navigation are still not fully known or understood. With the exception of the Northern Sea Route, the Arctic is perceived as an unknown quantity or a marine frontier. As a result, the provision of insurance for Arctic shipping tends to be on a case-by-case basis and expensive, with seasonal additional premiums. The availability and cost of marine insurance is a major constraint on Arctic marine shipping.

Arctic Council, 2009, Arctic Marine Shipping Assessment (AMSA), Arctic Council.©