Beyond Claims in the Strait of Hormuz

The recent disruption in the Strait of Hormuz has offered a reminder that maritime risk is rarely confined to what happens on the water. Since conflict involving Iran escalated earlier this year, much attention has focused on vessel movements, war risk premiums, sanctions exposure and the potential impact on global trade. Yet behind every routing decision, delayed transit and operational contingency plan are people tasked with making difficult judgements in an environment defined by uncertainty.

That human dimension is often overlooked. It is also where many of the most significant maritime risks originate. Marine insurance is traditionally associated with the aftermath of an incident. A collision occurs, cargo is damaged, a crew member is injured, and insurers respond. While that remains a core function of the industry, it tells only part of the story. Increasingly, insurers are devoting as much attention to preventing losses as they are to managing them.

This reflects a simple reality. Most maritime incidents are not caused by a single catastrophic failure. More often, they emerge from a combination of circumstances, decisions and behaviours that align in the wrong way at the wrong time. A checklist is rushed. A warning sign is missed. A crew member is distracted, fatigued or reluctant to challenge a developing situation. Individually these may seem insignificant. Collectively they can have serious consequences.

For insurers, understanding these patterns is one of the less visible benefits of handling claims across the global fleet. Every casualty investigation, near miss and operational incident contributes to a wider picture of how losses occur. Viewed in isolation, an accident may appear unique. Viewed across hundreds of cases, common themes begin to emerge. The value of that perspective becomes particularly apparent during periods of heightened tension such as those currently affecting the Persian Gulf.

One misconception emerging during the Strait of Hormuz crisis is the suggestion that shipping activity slowed because insurance was unavailable. In reality, capacity largely remained in place, albeit at a cost reflecting the changing risk environment. The more fundamental question facing shipowners and operators is whether the risk to vessels and crews justifies proceeding at all.

That distinction is important. Insurance can help organisations manage financial consequences. It cannot eliminate operational risk, nor can it replace the judgement of masters and operators faced with uncertain conditions. Decisions about whether to enter a region, alter a route or delay a voyage ultimately depend on an assessment of risk that extends far beyond insurance considerations.

The same principle applies to loss prevention. What might appear to be routine guidance on slips and falls, lifting operations, bunkering procedures or evidence preservation after an incident is often part of a much larger effort to influence decision-making before something goes wrong. The objective is not simply compliance. It is to encourage crews to pause, assess a situation properly and make safer choices.

This has led to a gradual institutionalisation of loss prevention across the maritime sector. Safety advice is no longer seen solely as a technical exercise. It increasingly draws upon insights from psychology, behavioural science and operational experience. The focus has shifted from asking whether procedures exist to understanding whether they are likely to be followed when crews are tired, distracted or operating under pressure.

The current environment has reinforced that thinking. For many seafarers operating in and around the Persian Gulf, the greatest challenge has not been a direct security incident but the cumulative effects of uncertainty. Concerns about regional stability, changing voyage plans, prolonged delays and family welfare can all affect concentration and decision-making onboard.

That is why modern loss prevention extends well beyond physical hazards. Mental wellbeing, fatigue and crew welfare are increasingly recognised as critical components of safe operations. A distracted or exhausted crew member can represent as significant a risk as a mechanical failure.

Addressing these challenges requires interoperability across the maritime industry. Insurers, shipowners, managers, class societies and regulators all see different aspects of risk. When those perspectives are shared effectively, lessons learned from one vessel, one incident or one region can help prevent losses elsewhere.

The maritime industry will always need insurers to respond when things go wrong. But some of the most valuable work now takes place before an incident occurs. The goal is not simply to pay claims efficiently. It is to help ensure fewer claims need to be made in the first place.

The lessons emerging from the Strait of Hormuz are ultimately not just about geopolitics or insurance. They are a reminder that safe shipping depends on informed decisions, resilient crews and a shared commitment to understanding risk before it becomes loss.

Dr. William Moore is Head of Loss Prevention at The American Club.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.