analysis | Why your hull insurance policy doesn’t actually cover main engine breakdown.

Here’s a quick way to tell if you’re part of the maritime industry. Read the below and ask yourself: Does any of it make sense to you?

If you have better luck reading Egyptian hieroglyphs, congratulations. Your sanity is intact, you lead a fulfilling life, and you probably have a full head of hair to boot. If it does make sense, you have my sympathy: you’re one of the poor guys dealing with the wonderful world of maritime claims.

Here’s an excerpt from the TAYLOR form, a standard hull insurance policy.

Try to stay awake.

“This insurance also covers loss of or damage to the vessel named herein directly caused by: Breakdown of motor generators or other electrical machinery and electrical connections thereto, bursting of boilers, breakage of shafts, or any latent defect in the machinery or hull, (excluding the cost and expense of replacing or repairing the defective part);”

Maritime claims handlers will recognize it as “the bit in the policy that provides coverage for breakdown of the main engine.”

But here’s the thing: it doesn’t actually provide coverage for main engine breakdown.

Companies that for years have incorporated the standard TAYLOR 1953 (Rev. 70) into their policies—the boilerplate used by insurance policies around the nation—have been writing policies of hull insurance that may not provide coverage for engine breakdown.

Sony cyberattacks: Why Sony may not be able to distribute “The Interview”

Sony has recently been facing calls to release its controversial comedy “The Interview” following a massive cybersecurity breach of its computer systems. It seems that everyone, from technology journalists, business commentators, and even President Obama himself has tried to compel Sony to distribute the film. The clamor has intensified in the wake of Sony’s cancellation of the theatrical release, with some calling for its distribution through nontraditional means such as downloads and streaming services. Pundits argue that by releasing the film, Sony can even claim the moral high ground, defying the perpetrators and taking a clear stand for freedom of expression in film.

While the idea is not without merit, Sony may not even be able to legally release their own film. The hacking group perpetrating the attack, Guardians of Peace, have made it very clear that any distribution of the film would invite an attack. If Sony were to release or otherwise distribute the film, resulting in any kind of attack against viewers, Sony could be held legally liable for negligence in failing to take precautions against a foreseeable circumstance. Potentially, Sony’s insurers could discharge their obligation to defend against any resultant legal action, and Sony would be left dealing with any lawsuits on its own.

The legal concept can be distilled quite simply: When a bomb threat is made against a school, the credibility of the threat is irrelevant; the school is locked down and searched until it is deemed safe. If the school were crazy enough to carry on as usual and an attack were to occur, the school would be held responsible for not taking precautions.

The threats against Sony may not be empty, either. This is not some random 14-year-old girl making threats on Twitter. The perpetrators have already brought Sony’s computer infrastructure to its knees, and while the threat is decidedly outlandish, there is the slight chance that the hackers could follow through. All it takes is a single attack, however minor, for the perpetrators to fulfill their end of the threat.

Make no mistake, the film has instantly earned cult status for triggering a devastating cyberattack against a large multinational before it was even released. That makes it worth watching not necessarily because the film will be “The Great Dictator” of our generation, but because like many others, I am desperately curious to see if it really was worth the concerted effort needed to launch the cyberattack. (Whether the attack on Sony is merely a “test launch” of North Korea’s cyberwarfare capabilities is another issue altogether.)

I would love to be proven wrong and have the film see widespread release. But Sony is faced with an uncomfortable decision. They may not legally be able to distribute the film even if they wanted to. The leak of unvarnished, sometimes bitingly candid emails has robbed Sony of any pretense of privacy. But by being forthcoming with the circumstances, revealing why they chose not to release the film and how they are dealing with the crisis, Sony can counter any misinformation before it becomes gospel—for instance, allegations of being submissive to the attackers.

After all, with the amount of information already released, they have very little to lose.