This lecture/paper will critically examine the growth and efficacy of compulsory insurance in the shipping industry steered primarily by international conventions and EU policy. A feature of modern international conventions which establish third party liability on the part of owners and others is that they incorporate an obligation to insure and also establish direct rights of action against insurers. Following the Erica incident European policy has moved in a similar direction and under the terms of a Directive of 2009 an obligation to insure is established in relation to third party liabilities of a kind identified in the Limitation Convention 1996. Both of these streams of policy will be analysed closely, with particular attention focused on the reliability of the insurance provided by the markets. Insurance is of little or no worth if it does not pay when a claim is made against it.
