(March 2): More than half of the world’s largest maritime insurance clubs will cease cover for war risks for ships entering the Persian Gulf starting Thursday (March 5).
From midnight London time on March 5, war-risk cover will be terminated automatically if vessels enter the Persian Gulf, specific adjacent waters or Iranian waters, according to notices seen by Bloomberg News. They were issued by seven out of the 12 members of the International Group of Protection and Indemnity Clubs. The decision only affects war risks, with other terms of cover remaining unchanged.
War-risk cover is a specialised insurance that protects shipowners and charterers from third-party damages resulting from war, terrorism and piracy, among others. The removal of the insurance will likely dent risk appetite for those looking to load cargoes from within the Persian Gulf. All other terms and conditions of the relevant policies remain unchanged.
The IG contains non-profit, mutual insurance associations that provide maritime cover to about 90% of the world’s ocean-going tonnage. The clubs that have so far decided to pull war-risk covers are Gard AS, NorthStandard Ltd, Steamship Mutual Underwriting Association Ltd, Assuranceforeningen Skuld, American Steamship Owners Mutual Protection and Indemnity Association Inc, The Swedish Club and the London P&I Club.
Adjacent waters to the Persian Gulf include the Gulf of Oman and waters west off Oman’s Cape al-Hadd, stretching northeast to near the Iran-Pakistani border.
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