Are warships insured?

This question arose during discussion of the unfortunate incident involving HMS Nottingham and a very large rock

Personally, I cannot believe that military hardware of any kind is insurable- my friend scoffed and insisted that all ships of a decent size are insured. Anyone know for sure?

Very large organisations, such as governments, generally carry their own risks since this is cheaper than insuring. I would be very surprised if the British Navy insured its vessels.

Besides, it would be difficult or impossible to insure a warship against many of the risks to which, in the nature of things, it is likely to be exposed.

Almost all insurance is void for acts of war and terrorism so I don’t see why it wouldn’t be insured for such mishaps. Then again insurance is playing the odds and if you have enoguht ships and the ability to repair them it’s most likely cheaper to just take your chances.

Terrorist acts didn’t void cover for the WTC. The only point of contention there is whether it constituted one or two acts of terrorism.

Terrorist acts didn’t void cover for the WTC.


I thought they did but the insurance co’s were willing to pay to avoid bad publicity.

Any risk CAN be insured, some risks are not insured commerically as a practical matter.

At the turn on the century the headquarters of an insurance compnay burned. It was “Self-insured,” as are most governments’ property.

I recal that when the (MGM Grand?) casino burned several years ago fire insurance was bought AFTER THE FIRE.

That is to say MGM was insuring itself against the potential upper limit of the loss.

I owuld go on but I am the only non-professional who finds insurance interesting.

I’m an interested non-professional, and I was going to answer previously until I realized somebody in insurance probably has quite a lot to say about it. But now that you’ve started…

Any number of risks can be insured, agreed. One (1) of the purposes of insurance is to spread risk. Note how the United States wanted Japan, Canada, and Europe to share the risk, effectively, of the Space Station. After all, a shuttle could fairly easily have blown up a vital piece and ruined everything. And note how now Russia is suggesting we go to Mars with them.

One (1) of the purposes of insurance is to recover from a catastrophic loss. E.g., it’s worth insuring your house or car, because probably so much of your money is in them it would cause you severe inconvenience if you lost them. On the other hand, if you own your house, then insuring your new tires is a losing proposition. You could easily afford to buy another tire, and the rate of insurance is based on how much on average it will cost to pay for just such a tire puncture (plus the insurance company’s surcharge).

It’s worth paying house insurance because you can’t take the chance of being entirely wiped out.

For governments, the possibility of being wiped out on a $50 tire is zero. Even losing a couple warships generally doesn’t bankrupt a country. So they wouldn’t be insured for that reason.

I also have a suspicion that government agencies don’t like to insure things because it’s “money up front”, and they figure they can always plead for a bigger allocation than they were supposed to have if there’s an “unexpected” loss. Somebody correct me if I’m wrong about this.

The British Royal Navy does not insure its ships (or anything else). It is considered that the occasional accident comes into the heading of “running costs”, and the occasional wartime loss is what the ships are there for, ie its part of their purpose to get damaged from time to time.

The same applies to all parts of the British Armed Services. If the loss sustained was beyond their means, the governement would pay any liability.

I cannot conceive of a liability that wuold be beyond the British Government’s ability to pay.

The same applies to all government property eg the National Art Collections, Palaces etc.

The Queen may make her own arrangements on her private collections and palaces, I don’t know.

I don’t know anything about the British navy, but the US government is self-insured in all it operations as far as I know. When you go on travel for the US and rent a car, you will not be reimbursed for the optional “collision damage waiver” if you should be so foolish as to accept it.

AFAIK, the US Navy does not only not insure its military vessels and aircraft, it does not even insure its cars on the grounds that it is “Sovereign”, which I reckon is in effect self-insured and means that they make their own rules about requiring insurance. The word “Sovereign” specifically came up every time I asked about why no insurance.

“Sovereign” is pretty well irrelevant here. The truth is that anybody who has a large fleet of cars and sufficient resources to meet any claims that might be made is likely to save money by not insuring. For example, the city bus company in my city, which is certainly not sovereign, has no external insurance.

Something was bugging me (admittedly a small voice), a feeling that somehow warships can be and are insured.

  1. I believe Lord’s of London will insure practically anything legal as long as they can figure out what the odds are that they can almost certainly make a profit. Why would a country take them up on this? Supposing there was a very small country that wasn’t at war, but which might be attacked if its pride of the fleet, a 10-man, 1-woman submarine developed mechanical troubles that put it out of action for more than a year. (Say, by hitting a rock, as in the OP.) They might very well want to rent another sub until their own could be repaired, just to keep my shores protected. The country is only looking for costs to rent a submarine for 1 year, in advent of unforseen mechanical failure. Insurable? Why not? If Lloyds figures the chances of an accident are 1 in 100, they could offer the country a policy at 100th of the value of renting another submarine, plus Lloyd’s risk. Submarine costs $10,000,000. Average loss in any year, $100,000. Rental cost of submarine, $1,000,000 per year. Cost of policy, $120,000 per year. Works for me.

  2. In a broader sense navies do insure their ships: they buy ships so they can protect one another. To the cost of an aircraft carrier must be added the destroyers that have little purpose except to defend them. The “insurance” costs here are actually higher than going to Lloyd’s for a policy that covers replacement value, because what a navy wants out of the “destroyer policy” is not to have the aircraft carriers sunk at all, under normal circumstances. Also, replacement time is more critical than replacement value, and an insurance company couldn’t just replace an aircraft carrier overnight.

  3. The major navies of the world insure themselves against mechanical and design defects in another way: holding the manufacturer responsible for problems caused by being out of specification. And eventually, if a supplier causes enough problems, governments have ways of finding another supplier. So the “insurance” against bad parts is actually quite substantial. It costs suppliers a fortune to keep lists of all parts they’ve included in military equipment. And another fortune to manufacture parts to tolerances that aren’t always critical for the application.

Reminds me of the old Monty Python sketch:

Not only does the Canadian government not insure any of its vehicles or buildings, it doesn’t insure things like works of art in national collections, historic sites (how much is that 1887 13-pounder RML gun really worth?), etc. The cost would be too much for any government to bear. According to this site (, the Mona Lisa isn’t insured:

I’d bet dollars to doughnuts that the same is true of the Statue of Liberty, Magna Carta, or St. Peter’s; these things are simply beyond price.

I would not get inside a $10 million dollar military submarine for all the tea in China–given that an SSN costs about 1.65 Billion dollars fully loaded, a $10M sub might be held together with duct tape!

Hey! I’m representing a poor, small country, with swaggering neighbors who bought their modern surface ships from China and France. I don’t need a great submarine, I just need to show the flag with a smaller sub thrown away by the major powers some 30 years ago!

There was an ad in the local newspapers some years ago that the USA was willing to sell an upgraded, workable, WWII sub for $10,000,000, as I recall.

The very low cost is one of the reasons underdogs go for subs. If Argentina’s subs had been in proper working order in the Falklands, the British probably would have lost.

As this has been said previously most large companies ( and countries for that matter) self insure. The costs of the premiums would not make it work their while to take private insurance. On the Railway ( where I am ) , for example when ever we have an accident the claims for dammages come right off the bottom line. I shudder to think, if we were insured, how much the premiums would go up after one derailement…

I would seiously doubt any insurance company would want to cover a ship or other target a hostile force would go to great pains in order to destroy.

Why does my erratic memory recall an insurance case involving the late delivery of some ships to the Spaniards in the Spanish-American War in 1899?

I will look and report back.