Starting from March 5, "war risk" for ships in the Persian Gulf waters will be cancelled! Seven major international maritime P&I clubs have announced this.

Starting from March 5, "war risk" for ships in the Persian Gulf waters will be cancelled! Seven major international maritime P&I clubs have announced this.

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More than half of the members of the world’s largest maritime insurance group have announced that they will terminate war risk coverage for ships in the waters of the Persian Gulf. This decision will take effect from this Thursday and will have a direct impact on shipping activities entering the region.

On March 2nd, among the 12 members under the International Group of Protection and Indemnity Clubs (IG), seven have announced: effective midnight London time on March 5th, war risk coverage will automatically terminate for ships entering the Persian Gulf, designated adjacent waters, or Iranian waters. Other insurance terms are not affected by this decision.

This move is expected to significantly reduce shipowners’ and charterers’ risk appetite for loading cargo in the Persian Gulf, exposing related shipping activities to greater uncertainty. For shipping companies relying on this area for cargo operations, the absence of war risk coverage means that compensation for third-party damages arising from risks such as war, terrorism, and piracy will no longer be covered.

The seven clubs that announced the withdrawal of war risk coverage 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 London P&I Club.

War Risk: Special Coverage Facing Withdrawal

War risk is a special type of insurance, providing shipowners and charterers with third-party damage compensation resulting from war, terrorist attacks, and piracy. The announced termination by the seven clubs is only for war risk insurance; all other policy terms and conditions remain unchanged.

Once war risk coverage lapses, ships entering the Persian Gulf will be exposed to these risks without protection. This will directly influence shipowners’ and charterers’ commercial decisions regarding routes in the region, with risk appetite expected to be significantly suppressed.

According to the notice, the geographic scope of war risk coverage termination includes not only the Persian Gulf but also specified adjacent waters, including the Gulf of Oman, waters west of Cape al-Hadd in Oman, and extends northeast to sea areas near the Iranian-Pakistani border.

IG consists of a group of non-profit mutual insurance associations, providing maritime insurance for about 90% of the world’s ocean-going tonnage, and is a core pillar of the international shipping insurance system. The seven associations making this decision account for over half of IG’s 12 total members, and their joint action holds significant indicator value for the global shipping insurance market.

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