Insurers say war cover still available for Gulf Voyages as shipping crisis deepens
NEW DELHI : War risk insurance for vessels transiting the Persian Gulf and Red Sea remains available despite a wave of cancellations tied to the escalating conflict in the Middle East, according to the International Union of Marine Insurance, offering a limited pathway for ships considering a return to the region.
In a media statement released March 5, IUMI said insurers continue to provide war cover on a single-voyage basis, even as underwriters reassess their exposure amid rapidly evolving security conditions.
“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,” the organization said.
The update comes as commercial shipping through the Strait of Hormuz has slowed dramatically following missile and drone attacks on merchant vessels and the widening conflict involving the United States, Israel, and Iran.
Several members of the International Group of P&I Clubs—which collectively insure about 90% of the world’s ocean-going tonnage—issued 72-hour cancellation notices over the weekend for certain war-risk policies covering Iranian waters and nearby Gulf areas after reinsurers withdrew capacity from the market.
Those notices, issued March 1, took effect Thursday, March 5, forcing shipowners to negotiate coverage on a voyage-by-voyage basis if they wish to continue trading in the region.
IUMI emphasized that such notices are a standard mechanism used when risk levels shift rapidly and do not necessarily mean coverage disappears entirely.
“It is important to recognise that a Notice of Cancellation does not, necessarily, end the cover,” the organization said. “War cover remains available for owners and operators wishing to take it.”
At the same time, the London insurance market says coverage remains in place for many vessels currently anchored in Gulf waters.
Sheila Cameron, CEO of the Lloyd’s Market Association, said insurers in London continue to support efforts to keep maritime trade moving through the region.
“The Lloyd’s Market Association welcomes the engagement of President Trump and the U.S. Development Finance Corporation to support the movement of non-sanctioned vessels and their commodities through the Strait of Hormuz in order to facilitate global trade and economic stability,” Cameron said in a statement.
President Donald Trump said Tuesday he has directed the U.S. government to provide political risk insurance and financial guarantees for maritime trade transiting the Persian Gulf, while signaling that U.S. Navy escorts for tankers through the Strait of Hormuz could begin “as soon as possible.”
According to Cameron, vessel movements through the strait have slowed but not completely stopped.
“Since Sunday 1 March, there have been at least 40 transits of vessels through the Strait of Hormuz,” she said.
However, a large number of ships remain effectively stranded in the region while operators weigh the risks.
“There remain approximately 1,000 vessels — around half of which are oil and gas tankers — with an aggregate hull value exceeding $25 billion in the Persian/Arabian Gulf and surrounding waters,” Cameron said. “Most ships remain anchored… primarily due to the understandable concerns of the shipowners and ship masters for the safety of their vessels and crew.”
Beyond security risks, shipowners are also navigating legal and operational uncertainties.
“There is uncertainty with regards to availability of salvage services and contractual positions between charterers, owners and cargo in what is a rapidly evolving situation,” Cameron added.
The insurance market itself has emerged as a central factor shaping operational decisions for shipowners. Without war-risk coverage, vessels often cannot legally or contractually transit high-risk waters.
Cameron said insurers in the London market are continuing to quote coverage for ships willing to undertake the voyage.
“We understand that offers of insurance are being made for vessels seeking to transit the Strait of Hormuz and offers will continue to be made available through the London marine war insurance market should they wish to transit at a future date when they consider it safe for their vessels and crew,” she said.
The London market has previously stepped in during major maritime crises, including the creation of a war-risk insurance facility that enabled vessels to sail the Ukraine grain corridor in the Black Sea.
“The London market is the home of insurance innovation,” Cameron said. “We look forward to collaborating with the relevant parties, including the U.S. Development Finance Corporation, to continue supporting shipowners and to facilitate global trade and economic stability.”
The International Union of Marine Insurance is separate from the International Group of P&I Clubs, which insures shipowners’ liability risks. IUMI primarily represents insurers that provide property coverage such as hull, machinery, and cargo insurance, while the International Group’s P&I clubs collectively insure the majority of the world’s ocean-going fleet against liabilities including pollution, crew injury, and cargo claims.
IUMI warned that the crisis is already reshaping vessel routing decisions and could disrupt global supply chains in the near term.
“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,” the organization said.
Insurers are also monitoring the concentration of vessels at regional ports and anchorages as operators wait for conditions to stabilize.
“We are likely to see disruptions to supply chains in the short-term, as a result,” IUMI said.
For now, insurers say the fast-moving security situation means coverage decisions will continue to evolve alongside developments in the conflict.
“In the current fast-paced situation, insurers will regularly re-examine their ability and willingness to provide that cover,” IUMI said.