Sea transport faces national high alert test

Sweden has just run one of its most comprehensive maritime preparedness exercises in recent memory and insurance was in the room from the start.

Totalförsvarsövning DSM 2025, staged on the island of Donsö on September 1 alongside Donsö Shipping Meet, assembled shipowners, ports, pilots, brokers, the Swedish Armed Forces and key authorities to test how critical sea transport would be maintained during a period of national high alert. The Swedish Club participated as a market protection and indemnity and hull and machinery insurer, contributing to discussions where operational decisions and liability meet.

The scenario was simple and uncomfortable. Sweden is at its highest level of readiness after a rapid deterioration in the Baltic security environment. Freight movements are controlled and prioritised. Port access is sensitive. Threats to commercial shipping are elevated. The state may requisition tonnage for national tasks. In that setting, the practical questions for insurers become immediate: who issues instructions, who carries the risk and at what point does liability shift?

Requisition questions

Requisition was tested explicitly. In the exercise, a commercial vessel insured in the ordinary market was requisitioned by the Swedish Armed Forces for use. Under Swedish law and standard market practice, the moment a vessel is requisitioned for title or use, normal commercial insurance terminates and the state becomes the insured, arranging its own cover through a government body.

Where a vessel is requisitioned for military use, commercial cover terminates at the point of requisition and the state becomes the insured. For Swedish-controlled ships that continue normal commercial operations, cover remains with their commercial insurers, Swedish or foreign, with potential state support only if required

That transition point must be unambiguous. If a requisitioned tanker is ordered into a high-risk transit and suffers a casualty, there needs to be clarity in advance regarding responsibility for crew injury, wreck removal, pollution and third-party losses. DSM did not attempt to rewrite policy frameworks, but it forced the market and the state to confront the hand-off in real time rather than at the quayside in an emergency.

Incident response

Casualty response under high alert produced a second set of issues. In one drill, a Swedish-insured vessel grounded near Gothenburg and required priority towage to repair through restricted waters under military control. What is routine in peacetime claims handling becomes layered in a defence context. Naval escort may form part of the salvage organisation. Access to a port of refuge may depend on national rather than commercial considerations. Claims professionals must understand how decisions on towage, salvage contracts, general average and pollution response are taken when military and civil authorities share control, and how those decisions are documented to keep the adjustment process on firm ground.

The Swedish Club’s role at DSM was as a commercial insurer and adviser, not as a state insurer. Where a vessel is requisitioned for military use, commercial cover terminates at the point of requisition and the state becomes the insured. For Swedish-controlled ships that continue normal commercial operations, cover remains with their commercial insurers, Swedish or foreign, with potential state support only if required. The club focused on mapping these interfaces so owners and crews can act with legal and operational certainty when the pressure is highest.

For the insurance market, three practical messages emerged. First, rehearse the transition from commercial to state responsibility so attachment and termination points are beyond doubt. Second, ensure casualty playbooks explicitly contemplate operations under high alert, including authority chains, documentation standards and communications with ports and regulators. Third, treat preparedness as part of service, not an afterthought.

Bringing insurers into national exercises produces better outcomes for policyholders and faster recovery of trade.

Johan Kahlmeter is director of claims at the Swedish Club