The then Southampton Oceanography Centre (SOC), had been operating and insuring its Autosub series of science research AUVs since 1996. As a consequence of a long track record of insuring high-value oceanographic equipment, when it came to insuring their first AUV SOC had both the contacts and track record.

While the brokers that SOC bought insurance through have changed over the years, the underwriter remained the same until 2005 when the Centre's financial affairs reverted to the Natural Environment Research Council. Working with a single Binding Authority up until 2005 meant they understood the risks with AUVs in science research. The insurance package covered damage to the vehicle in use and in transit and it covered third party liability.

Insured missions under Sea Ice  - Uninsured missions under Shelf Ice

AUV missions under sea ice in 2001 were covered by insurance at an acceptable premium. When missions under shelf ice were being planned, a thorough analysis was made of the risk and reliability of the vehicle. This report was passed to the Binding Authority to ensure that they were fully briefed as to the risks from the environment and the risk from failure of any of the vehicle systems. It was the conclusion of the report that it was more likely than not, over the three campaigns envisaged, that the Autosub would be lost. Perhaps surprisingly, the Binding Authority did not turn down the potential business.

Compromise - Insurance for activity not under Shelf Ice

The premium quoted was, however, substantial, and, even though an offer was made to return part of the premium at the end of each year of insurance if the vehicle was not lost, SOC could not justify the cost. A factor in this decision was that if insurance was taken out, and the vehicle was lost, there would be at least a year's interregnum while a replacement vehicle was built and tested. Notwithstanding this decision, the insurance agreement remained in place, and an acceptable premium paid for all of the periods of engineering trials in open water, for third party liability during these trials and for damage or loss of the vehicle during transit to the working area.

Risk Management Strategy - Build second AUV - Autosub3

Armed with the underwriters' offer SOC approached the funding agency (NERC) and reached an agreement that the Autosub Under Ice (AUI) programme would receive funding up-front to build and commission a second Autosub within the programme. The intention was that, if the original Autosub were to be lost, there would be a replacement vehicle available in time for operations in the next polar season. In essence, this was a form of self-insurance; one that had the advantage of ensuring that the gap between loss and replacement would be shorter than had the underwriters' offer been taken up. As it turned out, the prediction became true - Autosub2 was lost on the third campaign of the AUI programme. Through this self-insurance arrangement the replacement was at sea on its trials five months after the loss - covered by insurance.