The role of insurance in regulating cyber risks in the shipping industry

Abstract

Cyber attack has become a pervasive issue in the shipping industry. It can steal sensitive and confidential data, cripple navigation and other technological systems on board and result in considerable damage to ships and shipping entities. The importance of the shipping industry in international trade means that cyber risk must be tackled. The shipping industry has recently begun to address this issue with the publication of guidelines from IMO and other private entities such as BIMCO. However, as argued in this chapter, these broad public organisational instruments and other non-binding private institutional guidelines are not enough to deal with contemporary cyber incidents properly. As evidenced in this chapter insurance also exerts a regulatory force over its subjects and acts as a form of governance beyond the state. This chapter will endeavour to explore the role of insurance as an effective risk management measure that can be taken against cyber risk in the shipping industry.

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