Post-Incident Container Casualty Workflow

Context

This document describes the sequence of actions triggered by a container ship casualty at sea — for example, container losses overboard, hull damage, or a serious deviation. The workflow is deliberately generic: roles are abstract industry functions rather than named companies, so the same model applies regardless of flag state, insurer, or classification society.

The scope starts the moment the master becomes aware of a casualty and ends when the general average adjustment is closed, which typically spans several years.

Sequence diagram

sequenceDiagram
    autonumber
    participant MS as Master
    participant SO as Shipowner
    participant RG as Regulator
    participant LI as Liability Insurer
    participant HI as Hull Insurer
    participant CS as Class Society
    participant CI as Cargo Interests
    participant AA as Average Adjuster

    Note over MS,RG: Phase 1. Immediate reporting, first hours
    MS->>SO: Casualty notification (SMS procedures, ISM Code)
    MS->>RG: SOLAS V/31 report, navigation warning
    MS->>MS: Preserve VDR, ship's log, evidence

    Note over SO,HI: Phase 2. Insurer activation, first 24 hours
    SO->>LI: Notification of casualty (Club Rules)
    SO->>HI: Notification of casualty (MIA 1906 / NMIP)
    LI->>LI: Appoint correspondent, surveyor, lawyers
    HI->>CS: Order condition survey at port of refuge

    Note over LI,MS: Phase 3. Action plan for the master
    Note over LI,SO: AI platform drafts plan with citations to Hague-Visby, York-Antwerp, NMIP
    LI->>SO: Instructions (evidence, statements, LOF decision)
    SO->>MS: Approved action plan
    MS->>MS: Note of Protest before notary at first port

    Note over MS,CS: Phase 4. Surveys at port of arrival
    CS->>MS: Class survey, structural integrity
    LI->>MS: Liability surveyor, cargo damage
    HI->>MS: Hull surveyor, ship damage
    MS->>SO: Master's Report + Statement of Facts

    Note over SO,CI: Phase 5. General Average and cargo claims
    SO->>SO: Declaration of GA (York-Antwerp Rules 2016)
    SO->>AA: Appointment of Average Adjuster
    SO->>CI: Notice to Cargo Interests
    CI->>SO: GA Bond + Guarantee from cargo underwriter
    SO->>CI: Release of undamaged cargo
    CI->>LI: Cargo claim (Hague-Visby, 1-year time bar)
    HI->>SO: Indemnity for hull damage

    Note over AA,LI: Phase 6. Final adjustment, years
    AA->>AA: Average adjustment per York-Antwerp
    AA->>SO: Adjustment statement
    AA->>CI: Contribution demand
    LI->>LI: Subrogation and recoveries

Roles

Master

The senior officer on board. First to observe the casualty, obliged by the ISM Code and SOLAS to report without delay. Preserves evidence (VDR data, ship’s log, damaged equipment, containers still on board), executes the approved action plan, and signs the Master’s Report and Statement of Facts that all downstream parties rely on.

Shipowner

The commercial and legal principal of the ship, acting through a designated shore-based team (typically the ship manager and the Designated Person Ashore under the ISM Code). Owns the emergency response procedures, is the sole authorised interface with insurers, and is the party that legally declares General Average.

Regulator

Umbrella role covering the coastal state (whose waters the casualty occurred in or affected) and the flag state (whose registry the ship carries). The coastal state receives navigation-safety reports and issues warnings to mariners; the flag state opens the safety investigation and reports to the IMO. Under the SOLAS Chapter V amendments effective 1 January 2026, container-loss reporting from ship to coastal state to flag state to IMO GISIS is mandatory and standardised.

Liability Insurer

Provides third-party liability cover — cargo claims against the ship, pollution, wreck removal, personal injury. In practice this is a mutual Protection & Indemnity (P&I) club, typically a member of the International Group of P&I Clubs. Maintains a global network of local correspondents who mobilise surveyors and lawyers at the port of refuge, and issues the tactical and legal instructions that shape the action plan.

Hull Insurer

Provides first-party cover for physical damage to the ship itself (hull and machinery). Interested in the condition of the ship, salvage strategy, and cost of repair. Typically appoints its own surveyor to work alongside the class surveyor at the port of refuge.

Class Society

The classification society that certified the ship’s construction and continues to survey it in service. After a casualty, performs a condition survey to confirm the ship remains fit to trade, and imposes conditions or class notations if repairs are required. Also reviews cargo securing manuals and loading software when these are implicated in the casualty.

Cargo Interests

The parties with a proprietary or insurable interest in the cargo carried — typically the shipper, consignee, and their cargo underwriter. Receive General Average notices, provide bonds and guarantees against future contribution, and pursue cargo damage claims against the carrier under the applicable bill of lading regime.

Average Adjuster

An independent specialist appointed by the shipowner to prepare the General Average adjustment. Applies the York-Antwerp Rules to identify qualifying sacrifices and expenditures, values the property at risk, and produces the statement that determines each party’s contribution. Adjustments routinely take 2 to 5 years to close.

Key legal and contractual instruments

Operational and regulatory

• SOLAS Chapter V, Regulations 31 and 32 — danger messages, mandatory container-loss reporting from 1 January 2026
• ISM Code — mandatory Safety Management System including emergency response procedures
• MARPOL — reporting obligations where pollution is involved
• Nairobi Wreck Removal Convention 2007 — obligations of the registered owner where wrecks or drifting containers pose a hazard
• LLMC 1976/1996 — Convention on Limitation of Liability for Maritime Claims, caps aggregate liability by ship tonnage

Insurance contracts

• Marine Insurance Act 1906 (UK) — the foundational statute for the English-law marine insurance market
• Nordic Marine Insurance Plan (NMIP) — the primary hull and interests wording for Nordic-domiciled shipowners
• Club Rules — each P&I club’s own contractual terms with its members

Carrier’s liability for cargo

• Hague-Visby Rules — the most common regime under bills of lading. Package or kilo limitation: 666.67 SDR per package or 2 SDR per kilogram, whichever is higher. Time bar for cargo claims: 1 year from delivery or from when delivery should have occurred.
• Hamburg Rules and Rotterdam Rules — alternative regimes in some jurisdictions; the Rotterdam Rules are not yet in force

General Average

• York-Antwerp Rules 2016 — the current version; parties may still contract on the 1974 or 1994 versions
• Rule Paramount, Rules A through G (lettered rules — general principles), Rules I through XXIII (numbered rules — specific applications)

Salvage

• Lloyd’s Open Form (LOF) — standard no-cure-no-pay salvage contract
• SCOPIC clause — special compensation for environmental protection

Key documents produced

Phase	Document	Author	Purpose
1	Casualty notification	Master	First alert to shipowner
1	Danger message / nav warning	Master, then Regulator	Warn other vessels
3	Approved action plan	Shipowner (from insurer input)	Direct the master’s response
3	Note of Protest	Master	Preserve the shipowner’s position against future claims
4	Condition survey	Class Society	Confirm fitness to trade
4	Damage surveys	Liability and Hull surveyors	Quantify cargo and hull damage
4	Master’s Report + Statement of Facts	Master	Authoritative narrative of the casualty
5	Declaration of General Average	Shipowner	Legally invoke GA
5	Notice to Cargo Interests	Shipowner	Put cargo on notice of contribution
5	General Average Bond	Cargo Interests	Undertake to pay contribution once assessed
5	General Average Guarantee	Cargo underwriter	Financial guarantee behind the bond
6	Average Adjustment Statement	Average Adjuster	Final apportionment of loss

Typical timeline

• First hours — Phase 1 (casualty notification, regulator report, evidence preservation)
• First 24 to 72 hours — Phase 2 (insurer activation) and start of Phase 3 (action plan)
• First 1 to 2 weeks — Phase 4 (surveys at port of arrival or refuge)
• First 3 to 12 months — Declaration of GA and collection of bonds and guarantees, first-tier cargo claim notices (Hague-Visby 1-year time bar drives urgency)
• 1 to 3 years — Cargo claim litigation or settlement, hull repair indemnity paid
• 2 to 5 years — Final average adjustment and distribution

Where an AI claims platform fits

Meridian sits at Phase 3 and Phase 5, where the workload is dominated by legal reasoning against a corpus.

Phase 3. The liability insurer today spends hours to days assembling an action plan by consulting internal precedents and external counsel across several instruments (Club Rules, NMIP or MIA 1906, Hague-Visby, applicable local law). Meridian ingests the casualty facts from the shipowner’s notification, retrieves the relevant fragments of the corpus with jurisdiction and incident-type filters, and drafts a grounded plan with inline citations to the source clauses. The insurer’s role becomes review and approval rather than drafting from scratch. Once approved, the plan flows through the shipowner to the master.

Phase 5. The same corpus supports the declaration of General Average — identifying which sacrifices and expenditures qualify under the specific York-Antwerp Rules applicable to the bills of lading — and quantifying carrier liability exposure under Hague-Visby limits. The average adjuster remains the human authority on the final statement, but the shipowner reaches the declaration decision with grounded reasoning behind it.

Notes and simplifications

• The diagram merges the coastal state and flag state into a single Regulator lane. In practice these are distinct authorities with different mandates: the coastal state receives immediate danger messages, the flag state opens the safety investigation and reports to the IMO.
• Charterers are omitted. Under time or voyage charters, the charterer is often the party arranging the cargo and may sit between the shipowner and cargo interests. Charter-party clauses (NYPE, Gencon, and their bespoke amendments) then govern many of the flows shown.
• Salvors are folded into the action plan step. A serious casualty may trigger a separate Lloyd’s Open Form negotiation and SCOPIC invocation, with its own award process, before the ship reaches a port of refuge.
• The diagram assumes a single hull insurer and a single liability insurer. Real placements are usually syndicated across multiple underwriters with a lead and following markets.
• Cargo interests are shown as one lane. A single voyage carries cargo for many shippers and consignees, each with their own underwriter; the GA notice and bond process is replicated for every consignee.