The risk of taking over a vessel without its history

Marine insurers have long emphasised that maintenance records should follow the vessel at changes of ownership or management. Gard addressed the issue in a Loss Prevention Circular in 2010, and IUMI reinforced it in its 2015 position paper on loss of ship records, warning that missing documentation can expose both new operators and insurers to avoidable risk.

Claims data points in the same direction. The Nordic Association of Marine Insurers (Cefor) noted in its 2018 insurance statistics special analysis that vessels changing ownership generally have a higher claims frequency than those with stable ownership. The statistics do not identify missing records as the cause, but they underline that ownership changes can be periods of increased risk. Incomplete maintenance history may be one reason why new operators find it harder to manage that risk effectively.

Despite these warnings, the issue remains relevant today. Maintenance records still too often fail to follow the vessel, creating uncertainty for incoming managers and, if damage occurs, complicating the assessment of related claims. A recent Gard case illustrates how missing records can affect both technical and insurance assessments.

Gard recently handled a claim involving damage to a turbocharger on one of a vessel’s diesel generators. The cause of damage could not be assessed with confidence because key maintenance records were missing or incomplete. Some of these record gaps may have dated back to previous ownership or management.

The vessel had three diesel generators, and recent changes made to the turbochargers on the other two generators were also relevant. But without a complete picture of running hours, overhaul history and the reasons for those changes, it was difficult to determine whether the current damage was part of a wider issue affecting all three generators or a separate issue affecting only that turbocharger. This complicated the assessment of causation, deductibles and any potential recovery from third parties.

The case illustrates how missing historical records can weaken the assured’s position when seeking to support a claim after machinery damage.

Incoming managers and crew who do not have access to the vessel’s maintenance history are placed at a serious disadvantage from the start. Without continuity of information, they need time to verify the condition of systems and components, understand maintenance schedules and establish a reliable technical baseline. During this period, required maintenance may be missed or deferred, increasing the risk of failures, operational disruption and related claims.

The implications may become more serious if damage occurs and the vessel’s maintenance history cannot be demonstrated. Insurance policies generally exclude damage arising from wear and tear, inadequate maintenance and similar causes. When a claim is made, insurers’ surveyors will usually request maintenance records for the affected component and associated systems. If those records are unavailable, it may not be possible to verify running hours, maintenance intervals or compliance with manufacturers’ recommendations.

Missing documentation does not in itself determine the outcome of a claim, but it may make it harder for the assured to establish the cause of damage and recover repair costs.

The issue also illustrates the limits of relying on statutory or class documentation alone to assess a vessel’s condition. Classification society certification may confirm compliance with relevant rules and survey requirements, but it does not by itself demonstrate that the vessel has been properly maintained between class surveys.

The ISM framework requires operators to establish maintenance programmes and keep records verifying the condition of the vessel and its equipment. However, while a change of ownership or management may trigger a new Document of Compliance and Safety Management Certificate under the ISM Code, there is generally no consistent requirement to ensure that historical maintenance records are transferred.

Interim safety management certificates issued at the time of a management change may address formal compliance at takeover, but not the transfer of historical maintenance records.

Where the regulatory framework does not ensure the transfer of historical maintenance records, owners should make this an explicit part of the vessel handover, including by:

• Stating clearly in sale and purchase agreements that maintenance records are to follow the vessel, together with class certificates, vessel drawings and other handover documentation.

• Ensuring that historical maintenance records and other important technical information remain with the vessel, even where outgoing managers remove licensed software, ISM manuals or other documents forming part of their own management system. As a minimum, a hard copy should be left on board.

• Checking that the transferred records are sufficient for incoming crew and managers to identify maintenance history, running hours, and areas requiring attention or upgrading.

These steps can help incoming crew and managers familiarise themselves with the vessel and its machinery, while providing a clearer basis for identifying required maintenance or upgrades. They may also place the assured in a stronger position to demonstrate that any later claim is not the result of wear and tear or inadequate maintenance.