The development of automated driving and autonomous shipping technologies is fundamentally transforming the structure of accident causation, the allocation of civil liability, and the compensatory role of insurers. Traditionally, human conduct and negligence on the part of drivers, masters, or crew members have served as important bases for determining the causes of road and maritime accidents and allocating liability. In automated and autonomous transportation, however, artificial intelligence, automated driving and autonomous navigation systems, sensors, communication networks, data, remote operation, and cybersecurity may all contribute to the occurrence of an accident. As a result, it may become increasingly difficult to identify the ultimately liable party immediately after an accident, while, depending on the cause of the accident and the applicable legal relationships, potential liability may involve not only vehicle operators or shipowners but also manufacturers, software developers, system providers, data providers, and remote operators.
This diversification of accident causation and potentially liable actors calls for a conceptual distinction between prompt compensation of victims and the ultimate allocation of liability. Compulsory motor liability insurance has developed as a victim-protection mechanism based on mandatory insurance and direct claims against insurers. Korean automobile compensation law preserves this victim-protection framework while allowing an insurer that has compensated a victim for an accident caused by a defect in an automated vehicle to seek recourse against the person legally liable for the loss. From a comparable victim-protection perspective, the United Kingdom’s Automated and Electric Vehicles Act 2018 imposes first-instance liability on insurers, subject to statutory conditions, for accidents caused by an automated vehicle while driving itself. The Automated Vehicles Act 2024 further develops the broader regulatory framework by introducing regulatory actors such as the Authorised Self-Driving Entity (ASDE) and the no-user-in-charge (NUiC) operator.
Protection and Indemnity (P&I) insurance, by contrast, developed under fundamentally different historical and economic conditions. P&I Clubs provide mutual insurance against various third-party liabilities incurred by shipowners and other members and have developed a multilayered risk-distribution structure combining mutual risk sharing among members, individual Club retention, International Group pooling, and global reinsurance. This structure provides useful insights into the management of large-scale accumulation and systemic risks that may arise in autonomous shipping, particularly where a common software or algorithmic defect, communication network failure, or cyberattack affects multiple vessels.
This article does not argue that compulsory motor liability insurance and P&I insurance are legally equivalent or directly interchangeable. Rather, it adopts a functional approach that identifies the distinct advantages developed by each system and examines how those functions may complement one another in the emerging technological environment of automated driving and autonomous shipping. The victim-protection and prompt-compensation functions developed in motor liability insurance may reduce delays caused by complex technological liability disputes, while subsequent recourse may reallocate the ultimate cost of liability to manufacturers, system providers, or other actors legally responsible for the accident. At the same time, the pooling and reinsurance mechanisms developed in P&I insurance may provide a useful model for distributing large-scale accumulation and systemic technological risks that exceed the capacity of an individual insurer.
Accordingly, insurers’ compensatory responsibility in the age of automated driving and autonomous shipping should be reconstructed around three interrelated functions: prompt and primary compensation of victims; subsequent reallocation of the ultimate cost of liability through recourse based on the cause of the accident and the applicable legal relationships; and multilayered distribution of large-scale and systemic risks through collective risk sharing and reinsurance. Such a functional integration may prevent the uncertainties created by technological complexity from being shifted onto victims, while promoting an appropriate allocation of liability costs and a sustainable risk-distribution framework for automated driving and autonomous shipping.