Stranding is a situation where the vessel is run aground or unintentionally in a location such as shallow waters, from which it is incapable of continuing its voyage unless external assistance is provided.

A ship stranding is also referred to as grounding, but it is different from grounding. A grounding is a situation where there is contact of a ship’s hull with a seabed either intentionally or unintentionally.

However, ship stranding is a more serious form of grounding, which is generally accidental and leads to the vessel's immobilisation.

Ship or vessel stranding can occur due to various external and internal factors. These factors can cause ships to be immobilised for a certain period. Let us examine the details of ship stranding in marine insurance.

Adverse Weather Conditions

One of the primary causes of shipwrecking is adverse weather conditions, such as strong winds, tidal effects and heavy seas. These weather conditions can cause vessels to lose their balance and get stuck in water. For instance, rough seas can make it difficult to steer the vessel, which can cause vessels to be tossed into shallow water.

Reduced Visibility

Another reason for ship stranding is reduced visibility due to heavy rain, fog and other adverse conditions. When ship navigation is obstructed due to bad weather, it becomes difficult for ship owners or crew members to identify navigational hazards, which can lead to vessels being stranded.

Mechanical Failure

Mechanical failures, such as steering issues and navigational equipment failure, can also lead to the ship stranding. When there is a malfunction in the steering system, it can be difficult to control the vessel, which can cause ship stranding.

Furthermore, if the vessel's navigation system fails, it can compromise the position information and increase the chance of vessel stranding.

Human Error

Another main cause of vessel or cargo stranding is human error, such as manoeuvring mistakes, poor navigation skills and negligence.

For instance, when a crew member is unequipped to read navigation charts or fails to use modern navigation equipment, it can cause vessels to enter areas with hazards.

Another reason is manoeuvring mistakes, which cause vessels to deviate from their original path.

Obstructions

Obstructions during the voyage can also be a reason for a ship to strand. When a vessel becomes obstructed by submerged rocks, reefs or other obstructions, it can cause damage to the hull from the bottom, potentially leading to vessel stranding.

In some cases, it can also lead to other hazards, such as cargo damage or contamination and danger to the crew.

There are various clauses in marine insurance policy to address the risk of stranding. These clauses define how the insurance company will respond in the event of loss or damage to cargo or vessel resulting from a stranding incident. Here are some of the stranding clauses in marine insurance.

Institute Cargo Clauses

The Institute Cargo Clauses are standard sets of terms used worldwide in marine cargo insurance. Under this clause, the loss or damage to cargo caused by any named peril is covered. Stranding is a named peril under this clause.

Also read: What are the Institute Cargo Clauses in marine insurance?

General Average Clause

Another clause in marine insurance related to stranding is the general average clause, under which all parties involved in a sea voyage share the losses and costs incurred proportionally when part of the cargo or ship is sacrificed intentionally to save the voyage.

Sue and Labour Clause

The sue and labour clause places responsibility on the insured parties, such as ship owners and cargo owners, to take preventive measures or reasonable actions to prevent further damage and loss during stranding events.

Jettison Clause

The Jettison Clause provides coverage when cargo or ship equipment is intentionally thrown overboard to protect the vessel and remaining goods during emergencies such as stranding.

In such situations, the insured parties, like shipowners or cargo owners, may authorise jettisoning to lighten the vessel and prevent further damage or total loss.

Constructive Total Loss (CTL) Clause

The constructive total loss is another clause related to the stranding. Under this clause, if the vessel is severely damaged due to stranding and the cost of recovery and repair exceeds its insured value, then, in such a situation, the insurance company will treat it as a total loss and pay the full insured value.

Also Read: Clauses Covered in Marine Insurance

Stranding is a common incident that can impact marine insurance claims under various clauses and acts. Here is a step-by-step procedure on how straining can affect a marine insurance claim.

Step 1: Stranding Incident Occurs

The stranding situation occurs when a vessel is grounded or stranded due to human, mechanical, or weather conditions. In such a situation, the ship is unable to move or is structurally damaged.

Step 2: Notify the Insurance Provider

Once the stranding occurs, the ship owner needs to notify the insurance provider about the incident. The insurance company will arrange for the survey to assess the damage caused by the covered peril.

Step 3: Initial Assessment of Damage

After receiving the notification, the insurance company will survey to assess the damage to the vessel and its cargo. The insurance company also needs to determine if the vessel or cargo can be repaired, refloated or is likely a Constructive Total Loss (CTL).

Step 4: Salvage Operations Begin

Based on their assessment, salvage operations begin, in which salvors are hired to refloat the vessel or remove its cargo. The salvage charges are recovered under the salvage clause in marine insurance policy.

Step 5: Estimation of Coverage

The estimation of coverage applies to various marine insurance clauses, such as the Institute Cargo Clauses and the General Average clauses, among others. The insurance provider will assess whether the clause is applicable, and based on that, they decide the payout.

Step 6: Claim Documentation

The insured party must submit all the requested documents, including survey reports, salvage invoices and proof of loss or damage.

The insurance provider will review all these documents in detail and verify whether the incident aligns with the policy's terms and conditions.

Step 7: Final Settlement

After verifying everything, the insurance provider pays the final settlement amount to the insured party.

Also Read: Marine Insurance Claim Process

Let us examine the stranding situation in marine insurance through an example. A vessel named ABC transports goods from China to India. During its voyage, the vessel encounters rough weather conditions and poor visibility. Due to navigational misjudgment, it accidentally veers off course and runs aground on an uncharted sandbar.
The vessel becomes stranded, unable to move due to damage to its bottom hull. Water starts to enter the cargo hold, putting both the vessel and the cargo at risk. Since stranding is a named peril, the marine insurance plan will cover the repair costs or the total loss value if the vessel is not salvaged.

With careful planning and proactive measures, businesses can avoid stranding situations. Here are some key measures that can help prevent ship-stranding situations.

Proper Planning

One of the preventive measures to avoid stranding situations is to plan properly. The ship owners need to plan out the voyage route and conduct comprehensive risk assessments. This will help prepare for any unforeseen situation in advance and avoid potential hazards.

Check Vessel Properly

Another key measure to take before the voyage is to inspect the vessel's condition thoroughly. It is essential to inspect the vessel's condition, including the engine and safety equipment, to ensure it is in good working order before the voyage.

Employ Navigation Devices

The navigation devices are crucial for the accuracy and safety of voyage routes. These instruments help ships avoid hazards such as reefs, shallow waters and other obstructions that could lead to stranding or collisions.

Be Aware of Weather Conditions

Bad weather conditions, such as rain and thunderstorms, can cause vessels to become stranded. Ship owners must be aware of the weather conditions or follow the weather forecast before planning their voyage.

Conduct Safety Drills

Another preventive measure is the staff and crew members in the vessel need to be aware of the safety measures to carry out in emergencies. Conducting regular safety drills can help establish effective communication protocols, evacuation measures and other essential procedures.

Conduct Crew Training

A trained crew is one of the strongest defences against operational errors that could lead to stranding. Training crew members in navigation systems, vessel stability and load management can help them handle emergencies more effectively.

If stranding situations occur, it is crucial to act quickly and efficiently to ensure the safety of crew members and minimise damage.

Ensure Safety

First and foremost, it is essential to ensure the safety of all crew members and staff on board. If a ship is stranded, then it is crucial to evacuate the vessel before the situation worsens.

Notify the Relevant Authorities

It is crucial to notify all relevant authorities, such as port authorities, the Coast Guard and insurance providers, about the situation.

Take Preventive Actions

If the vessel is carrying goods, then it is crucial to take preventive measures to prevent further damage to the vessel or cargo.

Document the Incident

Lastly, it is crucial to document everything by taking photos and videos, maintaining detailed logs, etc., as this helps with insurance claim settlement.

Stranding is a common incident in the maritime business. Despite advances in navigation technology and safety regulations, such incidents still occur due to adverse weather, human error, equipment failure, or environmental obstructions.

Stranding can cause structural damage to vessels and also lead to cargo loss or damage. Due to this reason, various business owners prefer to invest in marine insurance plans since stranding is a covered peril in marine transit insurance.

Not just stranding, online marine insurance from TATA AIG allows businesses to protect their vessels and cargo against various other damages caused by natural hazards, theft and other risks.

Along with this, businesses can ensure business continuity and avoid operational interruptions with our suite of business insurance policies like Fire Insurance, Theft Insurance, Workmen Compensation Insurance and more.