International Submarine Engineering (ISE) has been in the business of developing and selling underwater vehicles since 1974, delivering over 200 vehicles to clients. With all of these vehicles, builder's and sea acceptance trials form part of the contractual agreement between the company and the client, and responsibility remains with the company until the client accepts the vehicle. Generally, the high cost of underwater vehicles compared with the relatively low cost of short-term coverage from an underwriter has made the latter alternative more attractive. For these short-term trials, ISE is able to purchase this insurance on a pro rata, monthly basis.

Keeping an Insurance broker informed during Risk Mitigation programme

In the 1990s, ISE began development of an under-ice cable-laying vehicle with the Canadian Department of National Defence (DND). This AUV (Theseus) was required to deliver 220 km lengths of underwater cable to remote sites under Arctic sea ice and then return to an under-ice base station. These missions, up to 450 km in length, remain among the longest AUV missions conducted to date. Over the next two years, the programme team worked closely with the broker to mitigate the risk as seen by the underwriter, involving: vehicle design, pre-deployment testing, and the planning and conduct of on-ice operations. To further mitigate risk, extensive sub-system and system testing was conducted in 1994 and 1995, and prior to mission deployment in 1996 two complete missions were conducted.

Temporary loss - then found and sent on remainder of mission

During the last operation in the Arctic, Theseus laid its cable successfully, but did not show up at the mid-point rendezvous on its return journey. The search plans were put into place, and after two days, the vehicle was located on the bottom, on its planned track. An error in failsafe programming had caused the vehicle to shut down and sit on the bottom. Once found, it became a relatively simple matter to rectify the problem and send the vehicle on its way back to the ice-camp.

This case clearly highlights the value of planning for insurance coverage in the design and operation of AUVs. Without this planning, ISE would have faced a premium of several million dollars and a significantly higher probability of a loss.