Preparing for the Storm: Strengthening Marine Insurance Strategies for Ports and Shipping Resilience

By Ed McNamara, CEO of Armada Risk Partners

Hey there! As we gear up for the 2025 Atlantic hurricane season, it’s clear that shipping and coastal ports are in for a rough ride. Climate experts are raising alarms about extreme weather events potentially outpacing what we’ve seen in recent years—think back to those intense hurricanes that wreaked havoc on our infrastructure. Ports, especially those in the Caribbean, Gulf Coast, and along the eastern seaboard, will need to step up their game when it comes to resilience.

With storms becoming more unpredictable due to climate change,having solid marine insurance is no longer just a good idea; it’s essential. This coverage can be a lifesaver when severe weather threatens operations or causes notable damage. it’s crucial for port operators to regularly assess their insurance policies so they can act swiftly and effectively if disaster strikes.

The stakes are high! Researchers at Colorado State University (CSU) have released some eye-opening forecasts this year—17 named storms with nine hurricanes expected, four of which could reach Category 3 or higher. That’s about 125% above the average over the last three decades! Plus, there’s now a 51% chance that a major hurricane will hit the U.S., compared to an average of 43%.AccuWeather echoes these concerns with similar predictions.

Last year was a wake-up call; changing weather patterns pushed storms into areas previously considered safe from such threats. When multiple hurricanes hit close together—as we saw recently—emergency response teams can quickly become overwhelmed.

Take Hurricane Francine from September: it caused major disruptions at Gulf Coast ports by shutting down energy facilities and affecting oil production by around 1.5 million barrels daily—a bump in crude prices followed suit! Similarly, Hurricane Helene impacted Florida’s ports like tampa and Canaveral by halting vessel traffic and cruise operations altogether—resulting in hefty financial losses across the board.

And let’s not forget Hurricane Beryl earlier that summer—it closed several Texas ports including houston and Corpus christi, sending shockwaves through logistics networks nationwide.

These incidents highlight why having robust insurance coverage is non-negotiable. Relying solely on goverment assistance during crises isn’t wise; as we learned last year when resources were stretched thin.

So what should maritime operators do? Here are some key areas worth reviewing:

1. Business Interruption Coverage: Make sure your policy covers revenue losses during port closures as well as costs associated with getting back on track.

1. Port Blockage Insurance: Look into coverage options for situations where vessels can’t access or leave your port.

1. Liability Coverage: Ensure you have enough liability limits for potential claims related to injuries or property damage due to storm-related incidents.

1. Supply Chain Disruption Clauses: Shipping companies should check their policies for provisions addressing broader supply chain impacts from extreme weather.

1. Named Windstorm Deductibles: Familiarize yourself with specific deductibles tied to hurricane damages—they can vary significantly!

By taking these proactive steps regarding insurance coverage now rather than later, everyone involved in maritime operations can better navigate this challenging landscape ahead of us during hurricane season—and build greater resilience against future storms!

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