Bloomberg: War-risk insurance pulled for Persian Gulf shipping in major industry shift

More than half of the world’s largest maritime insurance clubs will cease providing war-risk cover for vessels entering the Persian Gulf beginning March 5, a move that could significantly impact shipping activity in the region.

According to notices seen by Bloomberg News, seven of the 12 members of the International Group of Protection and Indemnity Clubs (IG) have issued termination notices. From midnight London time on March 5, war-risk insurance will automatically lapse for ships entering the Persian Gulf, certain adjacent waters, or Iranian waters.

The decision applies solely to war-risk cover, while all other insurance terms and conditions remain unchanged.

War-risk insurance protects shipowners and charterers against third-party liabilities arising from events such as war, terrorism, and piracy. Its withdrawal is expected to dampen risk appetite among operators seeking to load cargoes from within the Persian Gulf.

The IG comprises non-profit mutual insurers that collectively provide coverage for approximately 90% of the world’s ocean-going tonnage.

The seven clubs that have announced the withdrawal of war-risk cover are: Gard AS, NorthStandard Ltd, Steamship Mutual Underwriting Association Ltd., Assuranceforeningen Skuld, American Steamship Owners Mutual Protection and Indemnity Association Inc., The Swedish Club, London P&I Club

The affected adjacent waters include the Gulf of Oman and waters west of Oman’s Cape al-Hadd, stretching northeast toward the Iran-Pakistan border.

By Sabina Mammadli