Insuring and Managing Submarine Cable Risk


What are the risks involved in cable laying and installation? 

Cable laying and installation is a very ambiguous operation, which is handled by a lot of specialist contractors. Marine construction is known to possess a lot of risks however, cable laying has its own problems which include the following:

  •  When cables are not apparently ready, they need bending and kinking which is one of the occupational hazards involved in cable laying. 

  • Due to the nature of the cable laying environment, sometimes rocks are seen around during cable laying so rock compression and crushing will be involved so as to protect the cable. 

  • Equipment used during installation can be overloaded with pressure.

  • Ocean currents and moving survey vessels can cause unpreventable tension on Cable

  • Fishing activities aren't left out of the cable laying problems

What are current claims experiences?

Claims Experience: There is little recorded information about claims experience, although Carriers gave a report of about 10 years of claims history in the industry.  The normal claim costs are between $10 to $50 million while most individual claims are less than $1 million. The highest recorded claim cost is about $13 million which is because the repair mechanism involves many individuals and could last for a very long time. It is worthy of note that most repair processes last for up to twelve months depending on the issues that need to be fixed.

Balancing risks and rewards- which areas to self-insure

Submarine power cable's benefits cannot be overemphasized as they play an irreplaceable role in grid connection and power transmission. This promotes and projects its global economy to a rapidly growing state. If cables fail, automatically the whole system is affected which poses a huge loss.  So, therefore, a Robust risk management strategy is the best way for operators of the system to navigate through this challenge. The said risk management strategy needs to cover physical damage to cable if possible including business income losses caused by the damage. Submarine power cables have a long lifespan when handled well so it is recommended to balance risks and rewards when considering what areas should be insured or self-insured due to their hugeness and how capital intensive it can be. 


 Areas to Self-insure?

Causes of cable failure can be natural or manmade such as storm damage, anchor drag, marine currents, hurricanes, typhoons, earthquakes, and many others. Major claims recorded generated from these cable faulting events:

  • Damages caused by noncatastrophic events for instance fishing activities, ship vessel strikes, and many others

  • Catastrophic events such as natural disasters as well as other huge events such as vandalism

What are the benefits and risks of self-insurance?

The major benefit of self-insurance is that it gives premium control over risk selection and management. This gives the insurers a greater risk portfolio basis-giving them an edge in evaluation and assessment of the risk insurance they want and generating workable solutions on the risks that are not included but could be encountered in the future rather than following the normal industry trends. However, this approach also has its shortcomings as unexpected incidents may occur, which might advance to huge losses to the individual company involved. 


In conclusion, insurance is a very important aspect that needs consideration when handling a huge capital-intensive project such as the Submarine power cable system.

Gain insights on this and more at the 2nd Annual Submarine Power Cable and Interconnection Forum coming up on the 15th - 16th of November 2022.


The 2nd Annual Submarine Power Cable and Interconnection Forum aim to provide participants with cutting-edge information on the hot topics trending in the submarine power cable market and how to navigate some critical challenges that are projected in the Submarine power market worldwide. This summit will also serve as an avenue for expert interactions and product exhibitions as key industry players will be available. 

Join us so you don't feel left out in the industry.

Register Here

To request the agenda please send the request to Leadvent Group via email.

For more information and group participation, contact us: [email protected]

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