Cyber Risk Below Deck: Protecting Shipyards and Vessel Operators from Digital Threats

This post was originally published by Marine Log and is reprinted here with permission.

In the maritime industry, our primary focus often revolves around our mission: transporting cargo, maintaining vessels, and keeping operations on schedule. As digital systems increasingly become embedded in every aspect of maritime workflows, a growing and often overlooked threat emerges: cyber risk. As shipyards and vessel operators adopt digital systems to improve efficiency and safety, they simultaneously expose themselves to vulnerabilities that are still poorly understood and inconsistently insured.

Cyber threats are now a reality across maritime operations, affecting everything from tugboat navigation systems, shipyard maintenance platforms, and the communication networks that connect crews to command centers. While technology has advanced rapidly, regulatory frameworks and insurance protections are still in their infancy.

The Hidden Exposure

Many within the industry underestimate cyber risks because we traditionally focus on physical assets. Today’s vessels function as floating data centers, and shipyards rely on IoT-enabled equipment, remote diagnostics, and cloud-based project management tools.

Recent incidents have shown how easily these systems can be compromised:

• GPS and AIS spoofing have led to vessel collisions and rerouting.
• Malware introduced via USB devices has disabled operational technology (OT) systems.
• Ransomware attacks have locked shipyard networks, delaying repairs and drydock schedules.

These events don’t just disrupt operations; they create uninsured liabilities and reputational damage.

Another growing concern is the protection of sensitive data. As shipyards and vessel operators collect more digital information, whether it’s employee records, crew health data, or customer cargo details, they become stewards of privacy. A breach doesn’t just compromise systems; it can expose personally identifiable information, violate data protection laws, and erode trust with clients and employees. Cyber risk management must now include data governance and privacy protocols as core components of operational resilience.

Regulatory Landscape: Young and Evolving

The U.S. Coast Guard’s new cybersecurity rules, effective July 2025, require documented cybersecurity plans, designated cybersecurity officers, and incident response protocols for U.S.-flagged vessels. These rules signal a shift toward accountability, but many operators remain unaware of their full scope. The true dangers of maritime cyber risk (especially in OT environments) are not yet fully understood.

This regulatory immaturity creates a gap; operators may be compliant but still exposed. And insurers are watching closely. Underwriters are now asking:

• Are OT and IT systems segmented?
• Is crew training documented?
• Are third-party vendors vetted for cyber hygiene?

Insurance Considerations: Coverage Isn’t Always Clear

Many marine operators assume their protection and indemnity, marine general liability, or ocean cargo policies cover cyber events. Exclusions from digital sabotage, cumulative trauma, and regulatory fines are common. Even modest incidents can result in six-figure uninsured losses.

To avoid surprises, vessel owners and shipyards should:

• Review policy language for explicit cyber coverage.
• Confirm whether unseaworthiness exclusions apply to cyber-triggered events.
• Ensure contractual indemnity clauses align with insurance protections.

Proactive Cyber Risk Management Strategies

Here are six strategies for strengthening the cyber stance of your maritime organizations:

1. Conduct a Cyber Risk Audit.
   Evaluate vessel systems, shipyard networks, and third-party access points.
2. Develop an Incident Response Plan (IRP).
   Just like the fire safety plans we drew in school, IRPs may seem tedious, but they’re vital when something goes wrong. Regardless of size, every organization should have a documented plan for responding to cyber incidents. Your trusted risk advisor can help identify frameworks and build tailored IRPs that align with your operations. This also reinforces the importance of knowing who your broker is and having a trusted partner in place before a breach occurs.
3. Segment OT and IT Systems.
   Prevent malware from jumping between operational and administrative platforms.
4. Train Your Crew and Yard Staff.
   Cyber hygiene should be embedded in daily operations, like PPE and safety drills.
5. Review and Align Insurance Policies.
   Work with advisors who understand both marine and cyber risk. Ensure coverage matches your operational reality.
6. Strengthen Contracts and Vendor Oversight.
   Indemnity clauses, waivers of subrogation, and additional insured endorsements should reflect your cyber posture.

Conclusion: Cyber Risk Is a Marine Risk.

Cyber threats can penetrate any aspect of maritime operations, targeting vulnerabilities in scheduling systems or electronic chart display and information systems. As connectivity in maritime operations increases, the need for robust cyber risk management grows.

The maritime industry must move beyond compliance and embrace strategic cyber resilience. That means understanding the risks, closing insurance gaps, and building a culture of prevention, before the next breach hits below deck.

One of the most effective ways to foster resilience is by asking the right questions: Why are we a better risk today than six months ago? This ongoing introspection is crucial because while your systems may stagnate, threat actors never do.

Related Reading: Your Crew, Your Risk: A Practical Guide to Jones Act Compliance and Coverage

The above information does not constitute advice. Always contact your insurance broker or trusted advisor for insurance-related questions.