Lloyd's Maritime and Commercial Law Quarterly
INSURING SMART VESSELS IN A CIRCULAR ECONOMY: AN ANALYSIS FROM THE PERSPECTIVE OF POTENTIAL CHANGE IN PROPERTY INTEREST
Meixian Song*
There is growing legal scholarship on automation and digitalisation in maritime liability regimes and the vessels’ compatibility with international Conventions, producers’ product liability and the implications of cyber risks for marine insurance. This article aims to shift the focus to our relationship with the devices and legal interests in devices as seen through the lens of the circular economy. The article proceeds from the presumption that, given the increasingly higher degree of automation and autonomy, shipowners may opt for a different and circular model to own and operate ships
, because smart ships will demand that producers take on an increased role in operations and maintenance. In this model, shipowners will forgo full property interest in and control of the ship and will choose instead to develop a long-term contractual relationship with producers. It is argued that producers’ insurable interest in smart ships should be recognised in marine insurance law, and a complete code of insurance for both owners and producers must be considered instead of mainly focusing on liability insurance schemes (general and product).
I. INTRODUCTION
As Backes suggests, we have to change our habits and our way of working, consuming and living, from a simplistic consumption practice to a circular economy.1 Simplistic consumption practices are characterised as the “linear economy” (make, use, dispose), in which model raw materials are used to make a product, and after its use any waste is thrown away. In response to the alarming global sustainability issue, the circular economy has emerged in the past decades as an alternative economic concept.2 Put simply, the circular economy promotes recovery and reuse schemes, lifetime extension, sharing and service models, circular design and digital platforms.3
* Lecturer, University of Reading and University of Southampton. The author would like to thank Dr Johanna Hjalmarsson for her helpful comments and advice. All errors remain my own.
1. C Backes, Law for a Circular Economy (Hague, 2017), 10.
2. The circular economy is the most sustainable post-production business model. However, strictly speaking, the circular economy is not the only smart and green strategy available. See W Stahel, The Circular Economy, A User’s Guide (Abingdon, 2019), 4–6.
3. Mika Sillanpää and Chaker Ncibi, The Circular Economy: Case Studies About the Transition from the Linear Economy (Cambridge Mass, 2019), 72.
Insuring Smart Vessels in a Circular Economy
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