Marine Technology Innovation: Insurance Considerations

Introduction: why marine tech innovation changes the risk picture

Marine technology is entering a new era. Autonomous and remotely operated vessels, AI-driven navigation, smart sensors, offshore robotics, and low‑carbon propulsion are transforming shipping, offshore energy, aquaculture, and coastal infrastructure. That innovation is exciting—but it also changes how risk shows up, how losses happen, and how insurers assess exposures.

For marine tech businesses, the challenge is rarely “Do we need insurance?” It’s “Do we have the right blend of covers, the right limits, and the right contractual protections for the way we actually operate?”

This article breaks down the main insurance considerations for marine technology innovation—especially for UK-based manufacturers, developers, integrators, and service providers.

What counts as “marine technology innovation” today?

Marine tech spans a wide range of products and services. Insurance needs vary depending on where the tech sits in the value chain.

Common examples include:

• Autonomous surface vessels (ASVs) and uncrewed surface vessels (USVs)

• Remotely operated vehicles (ROVs) and autonomous underwater vehicles (AUVs)

• AI navigation, collision avoidance, and decision-support systems

• Smart port systems (IoT sensors, digital twins, predictive maintenance)

• Offshore inspection robotics and drone-based surveys

• Marine renewable technology (tidal, wave, floating wind support systems)

• Battery systems, hydrogen/ammonia fuel systems, and hybrid propulsion

• Subsea cables, comms, and sensor networks

• Advanced materials and coatings for hull performance and corrosion resistance

Each category introduces different loss triggers: software failure, cyber events, product defects, operator error, weather-related damage, regulatory non-compliance, and contractual disputes.

The core question insurers ask: “Where does the risk sit?”

Marine tech businesses often sit between traditional categories:

• Manufacturer vs. service provider

• Software company vs. marine contractor

• Equipment supplier vs. system integrator

• R&D prototype vs. commercial deployment

Insurers will want clarity on:

• Who owns the asset at each stage (prototype, testing, deployment)

• Who is responsible for operation and supervision

• Where the technology will be used (inland waters, coastal, offshore)

• What the worst-case loss scenario looks like (collision, pollution, injury, business interruption)

• What standards and approvals apply (class, flag state, port authority requirements)

Being able to explain this clearly—supported by contracts, test data, and risk controls—usually improves terms.

Key insurance covers for marine technology innovators

1) Marine cargo / transit insurance (including prototypes)

If you ship high-value equipment—sensors, control units, battery packs, ROV components—transit risk can be significant. Standard courier liability is typically limited and may exclude high-value or fragile goods.

Considerations:

• “All risks” cover with appropriate packing requirements

• Cover for prototypes and one-off items (valuation can be tricky)

• Temperature-controlled transit for sensitive electronics

• International shipments: customs delays, storage, and transhipment exposures

2) Property insurance for labs, workshops, and test facilities

Marine tech often involves specialist equipment: pressure chambers, calibration rigs, clean rooms, battery testing, and machine tools.

Key points:

• Sum insured accuracy (replacement cost vs. book value)

• Specialist equipment and spares

• Fire risk, especially where batteries, composites, or solvents are involved

• Flood exposure for coastal sites

3) Business interruption (BI)

Innovation businesses can be heavily dependent on a small number of critical assets: a test tank, a workshop, a single rig, or a key supplier.

BI cover should be aligned to:

• Realistic maximum indemnity period (often 12–24 months)

• Increased cost of working (e.g., hiring alternative facilities)

• Supplier and customer extensions (contingent BI)

4) Engineering / equipment breakdown

If you rely on precision machinery, power systems, compressors, or test rigs, equipment breakdown can cause both repair costs and downtime.

Look for:

• Sudden and unforeseen breakdown cover

• Cover for control systems and electronics

• Expediting expenses (rush shipping, overtime)

5) Public liability (PL) and products liability

If your technology causes injury or property damage—on a vessel, at a port, or during offshore operations—PL and products liability are foundational.

Marine tech-specific exposures include:

• Collision caused by navigation software failure

• Injury during installation or maintenance

• Damage to third-party vessels or port infrastructure

• Failure of safety-critical components

Important policy details:

• Territorial limits (UK, worldwide excluding USA/Canada, or worldwide)

• “Product recall” is usually not included under standard products liability

• Contractual liability: some contracts push liability beyond what a policy covers

6) Professional indemnity (PI) for design, advice, and software

Many marine tech businesses provide design, engineering, integration, or software services. If a client alleges your advice or design caused financial loss, PI is typically the relevant cover.

Common PI claim scenarios:

• Incorrect performance modelling leading to project delays

• Software integration errors causing operational downtime

• Inadequate specification leading to retrofit costs

• Failure to meet regulatory or class requirements

PI policies vary widely. Key issues to check:

• “Civil liability” wording (broader) vs. “negligence” wording

• Fitness for purpose exclusions (common in engineering contracts)

• Contractual liability and liquidated damages

• Retroactive date and “claims-made” nature of PI

7) Cyber insurance (especially for connected vessels and ports)

Marine tech is increasingly connected: remote monitoring, cloud dashboards, satellite comms, and over-the-air updates. That connectivity can create cyber exposures that look like IT risk and operational risk at the same time.

Cyber cover can help with:

• Incident response and forensic costs

• Business interruption from cyber events

• Ransomware and extortion

• Third-party liability (data breaches, network security failures)

For marine tech, insurers may ask about:

• Patch management and vulnerability handling

• Segmentation between operational technology (OT) and IT

• Remote access controls and MFA n- Backup strategy and restoration testing

8) Employers’ liability (EL) and health & safety

In the UK, EL is compulsory for most employers. Marine tech work can involve higher-risk activities:

• Working at height on vessels or port structures

• Confined spaces

• Electrical hazards and battery systems

• Offshore or near-water operations

Insurers will look for strong H&S management, risk assessments, training records, and contractor controls.

9) Directors’ & officers’ (D&O) and management liability

Innovation businesses often raise funding, work with public bodies, and operate in regulated environments. D&O can protect directors and officers against allegations of wrongful acts.

This can be relevant for:

• Investor disputes

• Regulatory investigations

• Employment claims (often packaged with management liability)

10) Marine hull / builders’ risks (where you own or build vessels)

If you own vessels (crewed or uncrewed) or build prototypes, you may need marine hull cover or a builders’ risks policy.

Key considerations:

• Navigation limits (where the vessel can operate)

• Lay-up periods and storage

• Named perils vs. all risks

• Testing and sea trials clauses

• Salvage and wreck removal

11) Pollution liability and environmental impairment

A marine incident can quickly become an environmental incident—fuel spills, battery fires, hydraulic fluid leaks, or damage to sensitive habitats.

Depending on operations, you may need:

• Pollution liability extensions under marine/PL policies

• Standalone environmental impairment liability (EIL)

• Contractual compliance with port authority or offshore operator requirements

Prototypes, pilots, and sea trials: the “grey zone” where claims happen

Many marine tech losses happen during testing, demonstrations, or pilot deployments—when the tech is not fully mature and responsibilities are shared.

To reduce disputes and uninsured gaps:

• Define who is “operator” during trials

• Confirm who carries hull and liability insurance

• Agree incident reporting and emergency response procedures

• Clarify limitation of liability and indemnities

• Ensure insurance requirements in contracts match what you can actually buy

If your client requires you to “hold harmless” or accept unlimited liability, you may be taking on exposures that are uninsurable or commercially unacceptable.

Contract risk: insurance is not a substitute for good terms

Insurance and contracts must work together. Marine tech contracts often include:

• Performance warranties and service levels

• Fitness for purpose obligations

• Liquidated damages for delay

• Broad indemnities (including for pollution)

• IP infringement clauses

• Subcontractor and supply chain responsibilities

Practical steps:

• Have contracts reviewed with insurance in mind

• Align caps on liability with your insurance limits

• Avoid accepting liability for “consequential loss” unless explicitly priced and insurable

• Ensure subcontractors carry appropriate PL/PI and name you where required

Regulatory and compliance considerations (UK and international)

Marine operations can touch multiple regulatory regimes:

• Maritime and Coastguard Agency (MCA) expectations

• Port authority rules and local byelaws

• Health and safety obligations (HSE)

• Data protection (UK GDPR) for connected systems

• Class society requirements for certain vessels and equipment

Insurers often reward evidence of compliance: documented procedures, audits, training, and incident learning.

Emerging risk themes insurers are watching

Autonomous decision-making and liability attribution

When an autonomous system is involved in an incident, the key question becomes: who is responsible?

• The manufacturer of the hardware?

• The developer of the software?

• The integrator?

• The operator supervising remotely?

Expect insurers to ask about:

• Human-in-the-loop controls

• Fail-safe modes and manual override

• Logging and audit trails

• Validation and verification processes

Battery, hydrogen, and alternative fuels

Green propulsion is a major innovation area, but it can introduce fire and explosion risks, as well as specialist storage and handling requirements.

Insurers may focus on:

• Battery management systems (BMS)

• Thermal runaway controls

• Fire detection and suppression

• Training and emergency response plans

Supply chain fragility

Marine tech often depends on specialist components with long lead times.

Insurance planning should consider:

• Stock and spares strategy

• Alternative suppliers

• Contingent business interruption

Data integrity and remote operations

If a vessel or system relies on remote data feeds, the integrity and availability of that data becomes critical.

Risk controls that help:

• Redundant comms links

• Offline safe modes

• Strong access management

• Regular penetration testing for critical systems

How to present your risk to insurers (and get better terms)

Underwriters typically respond well to clear, structured information. A strong submission might include:

• Company overview and revenue split (manufacturing vs. services vs. software)

• Description of products and where they are deployed

• Testing history and incident record

• Quality management (e.g., ISO standards where applicable)

• Cyber controls (MFA, backups, segmentation)

• Contracting approach and typical liability caps

• Details of any offshore work, diving operations, or high-risk activities

The goal is to reduce uncertainty. In innovative sectors, uncertainty is what drives exclusions, higher deductibles, and higher premiums.

Common insurance gaps for marine tech businesses

• Assuming PL covers design errors (often PI territory)

• Assuming PI covers bodily injury/property damage (often excluded)

• No cover for prototype transit or storage

• Inadequate BI indemnity period for long rebuild lead times

• Contractual liabilities that exceed policy terms

• Cyber risk treated as “IT only” when it’s operational

Practical checklist: quick actions to take this quarter

• Map your activities: manufacturing, design, software, installation, operations

• Review contracts for liability caps, indemnities, and fitness for purpose

• Confirm prototype and trial insurance responsibilities in writing

• Stress-test BI assumptions: how long to recover after a major loss?

• Document cyber controls and incident response

• Check territorial limits and any USA/Canada exposure

• Ensure subcontractor insurance is verified and current

Conclusion: innovate fast, insure smart

Marine technology innovation is moving quickly, and the insurance market is adapting in parallel. The businesses that get the best outcomes are usually the ones that can explain their risk clearly, control it consistently, and align contracts with insurance realities.

If you’re developing, manufacturing, integrating, or operating marine technology in the UK, a tailored insurance programme can help protect cashflow, satisfy client requirements, and support growth—without paying for cover that doesn’t match your real-world exposures.

FAQs

Does a marine tech company need both products liability and professional indemnity?

Often, yes. Products liability typically responds to injury or property damage caused by a product, while PI responds to claims alleging negligence in design, advice, or software that causes financial loss. Many marine tech businesses have exposures in both areas.

Are prototypes insurable?

Yes, but you need to be clear about values, testing conditions, and where the prototype will be stored, transported, and operated. Specialist policies or tailored extensions are often required.

Will cyber insurance cover a vessel incident caused by hacking?

It depends on the policy wording and how the incident is classified (IT vs. operational technology). A good cyber policy may help with incident response and business interruption, but you should also review marine liability and hull policies for cyber-related exclusions.

What if a client contract requires unlimited liability?

Unlimited liability is usually commercially risky and often not fully insurable. It’s common to negotiate caps aligned to insurance limits, exclude consequential loss, and clarify responsibility during trials.

What limits should we buy?

There’s no one-size-fits-all answer. Limits should reflect worst-case scenarios: collision, pollution, injury, project delay, and contractual requirements. A broker can help model realistic loss scenarios and align limits accordingly.