IUMI statement: Marine Insurance in the Middle East Region

IUMI and the marine insurance community are closely monitoring the situation in the Middle East and, in particular, the safety and free passage of shipping in the Persian Gulf and Red Sea. As with all shipping interests, the safety of seafarers will be a priority for owners.

The situation remains fluid with a number of vessels being trapped in the Persian Gulf and many operators re-routing their vessels to avoid the high-risk areas. Insurers will be mindful of the impact this might have on accumulations at nearby ports as well as on the vessels and crews as they navigate longer sea routes. We are likely to see disruptions to supply chains in the short-term, as a result.

The granting of war cover for the Persian Gulf and Red Sea is and will remain available under specific agreement on a single voyage basis as long as navigation is authorised by governments and flag states. In the current fast-paced situation, insurers will regularly re-examine their ability and willingness to that provide cover.

By way of explanation – in circumstances such as these, some insurers will serve a Notice of Cancellation in relation to the cover their assureds have in place. This is to enable the insurer to reassess the risk and then reinstate the cover at adjusted terms. It is important to recognise that a Notice of Cancellation does not, necessarily, end the cover. War cover remains available for owners and operators wishing to take it.

It should be noted that IUMI members (in the main) provide property insurance (hull, machinery and cargo) whereas liability insurance is usually covered by Protection & Indemnity Clubs, many of whom operate under the umbrella of the International Group of P&I Clubs.