OF VESSELS, HACKERS & INSURANCE: SEAWORTHINESS & THE RISK OF CYBERATTACKS

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Introduction

Just in case you may not have noticed, we are neck deep in the tech era. Yes, all around us, every single day, we are exposed to different innovations all thanks to the speed at which technology is changing the way we as humans operate. Today we have self-driving cars, mobile telephones that a lot smaller than before and amidst all of this development, the maritime industry has found itself subject to rapid technological development. Modern vessels, ports and terminals are increasingly dependent on technology to operate, a far cry from their predecessors which were significantly manually operated.

The maritime industry has not been left out when it comes to technological development and with its modification has come new risks. Today navigational software onboard ships can be compromised by criminals to lead the vessel into dangerous waters where these ships become vulnerable to all forms of attack. These new attacks have resulted in a need for a review of the risk of cyber-attack particularly in light of the implied warranty of seaworthiness of a ship and what this means for shipowners and operators today.

Understanding Cybercrime

To put simply, cybercrime relates to an offence that involves the use of a computer, computer technology or even, the internet. As more people across the world are having increasing access to computer technology and the internet, the risk of crimes being perpetuated using these devices has grown rapidly. As of 2015, the BBC reported experts to warn that Cybercrime was â€œthe next big threat” and it has been reported that the UK Government as of 2017 will be investing £1.9 Billion in cyber-security. This demonstrates the risk of growing cyber-criminal activities taking place around the world and the measures being taken by states to curtail cybercrime.

In understanding the risk to the industry, it is worth asking a rather important question. “Who commits cybercrime?” Ordinarily, one can be forgiven to expect the perpetuators of these crimes to either be stereotypical “bad guys” or tech-wizards with malicious intentions. Such qualifications are not far from the truth but it is essential to note that anybody, armed with a computer device and connectivity can commit cybercrime.

Cybercrime & the Maritime Industry: Recent Trends

The speed at which technology is developing has brought with it, newer threats to the maritime industry and in order to prevent loss or at least mitigate its effects, there is a need for operators in the industry to be fully aware of the risks posed and steps that can be taken to shield themselves from attack. Such measures are particularly important to marine insurance in that both the insured and the insurer are fully aware of the modern risks attendant to the industry and more importantly, enabling both parties understand ideal risk management steps to be taken against cyber-attacks.

In 2013, the drug dealers and hackers were able to successfully hack into the IT systems of the port of Antwerp, infiltrating the security systems of the port and allowing hackers complete access to control the location and movement of containers. This resulted in these persons collaborating with truck drivers to steal cargo from the port before the lawful consignees could come and take delivery of their cargo. The attacks have increased over the years with shipping giant, AP Moller-Maersk also falling prey to attacks. As recent as 2017, the company became a victim of a ransomware attack with all of its business units .i.e. container shipping, port and tug boat operations, oil and gas production, drilling services, oil tanker etc. being affected and loss of about $300 million being realised by the company.

The sheer amount of capital invested by millions of persons in the world in the industry calls for stronger security measures to be taken by vessel owners and operators alike. Insuring the risk of operation is of course, the first step to protection and accordingly, it is worth looking at cyber-crime and its effect so far on marine insurance.

Cybercrime & Marine Insurance: The Challenge of Seaworthiness

As is common knowledge, before insurance can be taken out on a vessel, there is an implied warranty of seaworthiness on the vessel. The essence of this is to ensure that the ship for which an insurer is about to provide cover is sturdy enough to withstand the ordinary perils of the sea. The sturdiness of a vessel (may we add) does not only relate to its physical competence; it extends to even the competence of the master and crew. The Nigerian Supreme Court defined “seaworthiness” in Narumal & Sons Nigeria Ltd v Niger Benue Transport Company Ltd (1988) 2 NWLR (Pt 106) 730 to mean that:-

“Seaworthiness for our purpose relates to the suitability of the ship in terms of crew, equipment (and even carrying the particulars cargo) for the journey being undertaken...”