Shipowners warned GPS spoofing groundings may not be covered by insurance

The Association of Average Adjusters (AAA) has raised a critical alarm for the maritime industry regarding the escalating legal uncertainties surrounding insurance claims related to vessel groundings caused by GPS spoofing. A recent discussion paper from the AAA highlights how the growing prevalence of cyber exclusion clauses in hull and machinery (H&M) policies, particularly the LMA5403 clause, may leave shipowners vulnerable in the event of a maritime incident tied to such cyber threats.

Insurance Policies Under Scrutiny

Chris Kilbee, chair of the AAA, explained that GPS spoofing misleads a vessel’s navigation systems by transmitting false positioning signals, which can lead to groundings. Traditionally, such incidents would be covered under standard H&M insurance policies, even if navigational errors are involved. However, the introduction of cyber exclusions like the LMA5403 clause complicates matters, raising questions about what damages are recoverable when electronic interference is at play.

The LMA5403 clause specifically excludes losses that are “directly or indirectly caused by or contributed to, by or arising from the use or operation, as a means for inflicting harm, of any computer or electronic system.” This clause introduces significant challenges for insurers trying to establish causation and intent in claims assessments. According to Kilbee, proving that an act of spoofing was intended to cause harm can be a daunting task, potentially complicating the claims process further.

The AAA emphasizes that understanding the intent behind GPS spoofing incidents, and establishing clear attribution and causation, have become critical for effective claims resolution. If insurers cannot demonstrate malicious intent in a spoofing event, they may find it difficult to deny coverage. Conversely, if intent is established, shipowners might unexpectedly discover that their claims have been denied.

To mitigate these risks, shipowners are increasingly considering cyber buy-back clauses, which allow for the reinstatement of coverage for incidents related to spoofing, albeit at an additional premium. The AAA urges shipowners and brokers to carefully review policy language and consider these endorsements, especially when operating in regions known for GPS spoofing vulnerabilities.

Increasing Incidents of GPS Spoofing

Reports of GPS spoofing incidents have surged throughout the 2020s, evolving from a minor cyber issue to a significant navigational threat. Hotspots for these occurrences include the Red Sea, Black Sea, Persian Gulf, and South China Sea. Data from satcom specialist Marlink indicates a dramatic increase in incidents; the company typically received one call every two weeks about GPS issues in July 2024, but by mid-July 2025, it received reports from over 150 vessels in a single day.

Noteworthy incidents include a fiery collision between two tankers near the Strait of Hormuz in June, attributed to extensive GPS spoofing, and the grounding of the 7,000 TEU vessel MSC Antonia off Jeddah, which was later incorrectly tracked in a desert location. These alarming cases underscore the urgent need for shipowners to be proactive in addressing the risks and ramifications of GPS spoofing in their operations.