Criticals damage adds persistent modifiers that negatively affect a ship and can occur two ways:

• Ship being disabled in battle - When a ships hull reaches 0 that ship is usually disabled rather than outright destroyed and it will be revived automatically on your next jump. When a ship is revived like that it has a chance of gaining critical damage.
  
• Jumping without supplies - It is important to have enough supplies when jumping. If you do find yourself jumping with no supplies available there is a chance that one or more of your ships acquires critical damage.

If one of your ships has 3 or more criticals is a chance that ship is destroyed instead of being disabled. If also carries a chance of being destroyed after a jump.

Critical Damage and its effects for each ship can be viewed from the fleet browser.

To avoid your ship being destroyed and to remove the negative effects of the Critical damage use repairs. These can be purchased from some shops and can be gained as loot or story choices.

Your hull plating is cracked, causing your maximum hull to be reduced.
Max hull health reduced by 1000.

Your reactor has begun to leak radiation, causing your ship to take constant hull damage.
Hull damage - 6.25 per second

Your jump plating no longer protects your hull, causing you to take hull damage when jumping.
Hull takes 1000 damage each jump.

Your shield charger is damaged, causing your shields to regenerate at a slower rate.
Shield Regen decreased by 50%

Your shield capacitor is damaged, causing your maximum shields to be reduced.
Max shield decreased by 1000

Ion particles have leaked into your ship, causing your shields to constantly drain.
Shield Damage 12.5 per second

Your shielding can no longer withstand jumps, causing you to arrive without active shields.
Shields completely depleted after each jump

Your reactor's power cells are burnt out, reducing your maximum energy.
Max energy reduced by 1000

Your reactor is depleted, causing your energy to regenerate slower.
Energy regen is 50% slower

Your jump drive drains your reactor on jump causing you to arrive with no energy.
Energy at 0 after each jump.

Your thrusters have been destabilised, reducing your ship's turning and maximum speeds.
Speed decreased by 20%

Your auto-reloader has a tendency to jam, causing your ship's rate of fire to be reduced.
Rate of fire decreased by 10%

Your weapons systems are malfunctioning, causing your ship to do less damage.