As geopolitical tensions continue to disrupt one of the world’s most strategically important shipping corridors, the implications for the global maritime industry extend well beyond freight movements and rising insurance premiums. In this exclusive conversation Ms. Sabarnaa M, Editor, India Shipping News speaks with Priyatham Sanjeeva Reddy Ramidi, a maritime professional specialising in Cruise Technical Operations and a former Protection & Indemnity (P&I) expert, to examine the evolving risks confronting shipowners, insurers and operators amid the prolonged Strait of Hormuz crisis.
Building on his widely discussed analysis of the crisis, Ramidi provides an in-depth perspective on the complex legal, operational and insurance challenges that are increasingly shaping the industry’s response. From insurance accumulation and causation disputes to machinery preservation, electronic navigation interference, cargo deterioration, sanctions compliance and the safe reactivation of delayed vessels, he offers practical insights into the often-overlooked consequences of sustained geopolitical instability for global shipping.
Excerpts of An Interview
Q: You have already written extensively about the impact of the Strait of Hormuz disruption on P&I Clubs and ship operations for ISN, what important issue is still being underestimated?
A: The most underestimated issue is risk accumulation. The public discussion often treats each vessel as a separate risk, but marine insurers may have hundreds of entered ships, cargo interests and liabilities concentrated within the same geographical area.
A single attack may involve one vessel, but congestion, port disruption, navigation interference or a pollution event can affect many ships at the same time. This is important for P&I Clubs, H&M insurers, war-risk underwriters and reinsurers because several claims can arise from one regional cause.
The real concern is not only claim frequency. It is correlated loss—multiple crews, cargo, collision, pollution and property claims developing together. Insurers therefore need to monitor their aggregate exposure by location, vessel type, ownership group and insured value, rather than assessing each entry in isolation.
Q: How should shipowners understand the boundary between P&I, Hull and Machinery, and war-risk cover?
A: They should begin by recognizing that the same casualty can involve all three covers. H&M generally concerns physical loss or damage to the insured vessel and machinery. P&I generally concerns specified third-party liabilities, such as crew claims, cargo liability, pollution, collision liabilities and wreck removal. War-risk insurance responds to defined war perils, subject to its wording and exclusions.
The difficulty is establishing the proximate cause. If a missile directly damages a ship, the physical damage may clearly engage war cover. However, if machinery fails several weeks later because preservation routines were not properly carried out during the delay, the analysis could be different.
Similarly, pollution resulting immediately from an attack may be treated differently from a later bunker spill caused during an ordinary transfer operation. Owners should notify all potentially relevant insurers early and avoid deciding coverage themselves before the facts are established.
Q: Could prolonged waiting create H&M claims even if a ship is never physically attacked?
A: Yes, but damage is not automatically recoverable merely because the vessel was delayed. Long periods at anchor or under reduced operating loads can create technical problems.
Auxiliary engines may experience low-load fouling, fuel quality may deteriorate, seals can harden, condensation may develop, and seawater systems may become restricted by marine growth. Planned Maintenance System tasks can also become overdue where technicians, spares or specialist services are unavailable.
If damage later occurs, H&M underwriters are likely to examine whether the assured exercised due diligence and followed the maker’s recommendations, class requirements and Safety Management System. Good engine-room logs, oil-analysis results, alarm histories and preservation records will be critical. A general reference to the regional crisis may not excuse poor maintenance.
Q: What does the crisis mean for the mutual P&I system and its reinsurance arrangements?
A: International Group Clubs operate on a mutual basis, meaning shipowners collectively share eligible liabilities through the Club structure. Very large claims may then interact with pooling and reinsurance arrangements, subject to the applicable rules.
A major pollution incident, passenger or crew casualty, collision or wreck-removal operation in this region could become extremely expensive. If several substantial claims arise from related events, questions may emerge about aggregation—whether losses are treated as one occurrence or several separate occurrences for retention and reinsurance purposes.
That is a technical issue, but it ultimately affects capital planning, reserving and future premium adequacy. Clubs will therefore be watching not only reported claims but also developing circumstances that may later generate claims.
Q: How important is early notification when no physical casualty has yet occurred?
A: It is very important. Owners sometimes believe they should contact the Club only after receiving a formal claim. In a situation like Hormuz, notification should begin when there is a reasonable possibility of liability or when specialist advice could prevent the loss from worsening.
For example, the Club may help coordinate surveyors, correspondents, lawyers, medical support, cargo experts or pollution responders. H&M underwriters may want a condition survey or machinery-preservation plan. War-risk insurers may impose routing, reporting or security conditions.
Early notification is not an admission of liability. It is a protective step that preserves cover, improves coordination and allows evidence to be gathered before it disappears.
Q: What new forms of evidence should owners preserve during the disruption?
A: Owners should treat evidence preservation as part of operational readiness. Traditional records such as logbooks, maintenance reports and work-rest hours remain essential, but electronic data is equally important.
VDR data, ECDIS history, AIS tracks, radar recordings, GNSS alarms, engine-monitoring trends, reefer downloads and communications with charterers should be retained. If GNSS or AIS interference is experienced, the vessel should record the time, position, equipment affected, and independent checks used to verify navigation.
Owners should also preserve instructions received from authorities, naval forces, charterers and insurers. In a later collision or cargo dispute, the issue may not be what the crew remembers, but what the electronic and documentary evidence demonstrates.
Q: GNSS interference is being reported across the area. How does that create an insurance exposure?
A: GNSS interference creates a navigational-integrity problem. Several bridge systems may display information derived from the same compromised position source, so apparent agreement between ECDIS, AIS and radar overlays may be misleading.
A grounding or collision caused by reliance on false position data could generate H&M damage, P&I collision liability, cargo claims and pollution exposure simultaneously. Investigators and insurers would examine whether the bridge team recognized the anomalies and used independent methods such as radar ranges, visual bearings, parallel indexing and echo-sounder information.
The shipowner’s defense will be stronger if the crew was trained for degraded navigation and the vessel had clear procedures. Technology failure does not remove the obligation to navigate prudently.
Q: Could cargo claims become more serious than many owners expect?
A: Absolutely. Cargo does not need to be physically struck by a weapon to suffer loss. Reefer cargo may be affected by prolonged power demand, equipment failure or delayed technical support. Agricultural and bulk cargoes may experience heating, moisture migration, infestation or deterioration.
Chemical cargoes may also require temperature control, circulation or monitoring over a much longer period than originally planned. Owners should maintain detailed records of cargo condition, ventilation, temperatures, alarms and corrective action.
The carrier may have legal defenses depending on the applicable contract and carriage regime, but those defenses are much harder to establish without reliable records. A survey should be arranged before discharge where deterioration is suspected.
Q: Does general average have a role in this type of crisis?
A: Potentially, yes. General average may arise when an extraordinary sacrifice or expenditure is reasonably made for the common safety of ship, cargo and freight during a maritime adventure.
For example, certain deviation, salvage, refuge or emergency-response costs could prompt consideration of general average, depending on the circumstances and contractual framework. However, delay or increased operating cost alone does not automatically qualify.
Owners should consult their average adjuster, H&M insurer and P&I Club before making assumptions. If general average is declared, security may be required from cargo interests before release, which can create significant administrative and commercial work.
Q: How are sanctions affecting insurance and casualty response?
A: Sanctions can affect almost every practical stage of a response. Payments to local agents, salvors, suppliers, authorities or medical providers may require screening and, in some cases, regulatory approval.
There have also been concerns around demands for transit-related payments or so-called tolls. Owners should never make such payments without urgent legal, sanctions and insurance advice. A payment intended to secure safe passage could expose the company, bank or insurer to serious regulatory consequences.
Sanctions may also delay the issuance of security, reimbursement of expenses or appointment of contractors. That is why compliance teams, Clubs, banks and legal advisers must be involved early.
Q: What happens if a casualty requires salvage or wreck removal in a restricted area?
A: Access may become the biggest challenge. Salvors need personnel, equipment, security clearance, permits and a safe operating window. If the area is affected by mines, military activity or electronic interference, even conducting a survey can be difficult.
Authorities may require the wreck to be marked, bunkers removed, or the vessel removed entirely. Wreck-removal liabilities can be substantial and may fall within P&I cover, subject to the rules and circumstances.
Emergency contracts should still be carefully reviewed. The urgency of the situation does not remove the need to define scope, remuneration, authority and termination rights. The Club and property insurers should coordinate closely to avoid duplicated or conflicting instructions.
Q: Are crew claims likely to increase even after the immediate security threat reduces?
A: Yes. Crew liabilities may continue developing long after vessel traffic improves. Extended contracts, missed repatriation, fatigue, anxiety and exposure to repeated security alerts can have physical and psychological consequences.
Owners should record attempts to arrange crew changes, medical support and family communication. Work-rest records should reflect actual conditions rather than simply appearing compliant on paper.
A fatigued crew also increases the possibility of a separate navigational or machinery casualty. Crew welfare should therefore not be viewed only as a humanitarian issue; it is also a core loss-prevention and liability concern.
Q: What insurance issues arise when ships begin moving again?
A: Reactivation is one of the highest-risk phases. Ships may depart after weeks or months of reduced operation, while traffic density rises, and temporary navigation arrangements remain in place.
Before sailing, owners should verify main propulsion, steering gear, starting air, generators, communications, navigation equipment and emergency systems. Underwater fouling and cooling-water flow should also be assessed.
Insurers may expect compliance with voyage-specific warranties, reporting requirements or risk recommendations. A documented bridge–engine-room briefing and reactivation checklist can later demonstrate that the owner exercised reasonable care.
Q: What is the most important fresh lesson for P&I Clubs and shipowners?
A: The lesson is that a geopolitical event creates a chain of secondary maritime liabilities. The first loss may be war-related, but the later claims may arise from crew fatigue, cargo deterioration, machinery neglect, collision, pollution, sanctions or contractual decisions.
The insurance response must therefore be coordinated rather than fragmented. Owners should create a causation and notification matrix showing which facts may involve P&I, H&M, war-risk, cargo, FD&D and loss-of-hire insurers.
Most importantly, claims readiness must begin before the casualty. Accurate records, timely notification, sound maintenance and disciplined decision-making will often determine whether a difficult incident remains manageable or becomes a prolonged coverage and liability dispute.
Q: Finally, how would you summarize the present position?
A: The Strait of Hormuz crisis is no longer only a question of whether ships can pass through. It is a question of whether they can operate, wait and reactivate safely while maintaining insurance compliance and preserving their legal position.
The physical threat may reduce before the claims do. Crew, cargo, machinery and contractual exposures can continue developing for months.
For shipowners, the correct approach is straightforward: notify early, preserve evidence, maintain the vessel, support the crew and avoid making insurance or sanctions decisions without specialist advice.
Disclaimer: The views expressed by Priyatham Ramidi in this interview are his independent professional opinions and are provided for general informational purposes. They do not constitute legal, insurance, classification, regulatory, security, or vessel-specific advice. Operational decisions are entirely based on the circumstances and of the individual vessels at their own discretion and made in conjunction with the Master’s agreement along with, technical managers, flag administration, classification society, P&I Club or insurers, brokers, and relevant authorities.
