Starting March 5th, "war risk" insurance for ships in the Persian Gulf waters will be canceled! The seven major international maritime insurance associations have announced it.

The world’s largest maritime insurance group announced that more than half of its members will cease providing war risk coverage for vessels in the Persian Gulf waters. This decision will take effect starting this Thursday and will directly impact shipping activities entering the region.

On March 2, among the 12 members of the International Group of Protection and Indemnity Clubs (IG), seven announced that starting at midnight London time on March 5, war risk coverage will automatically terminate for vessels entering the Persian Gulf, certain adjacent waters, or Iranian waters. Other insurance terms and conditions will remain unaffected.

This move is expected to significantly reduce shipowners’ and charterers’ risk appetite for cargo loading in the Persian Gulf, leading to greater uncertainty in related shipping activities. For shipping companies relying on this waterway for cargo handling, the loss of war risk coverage means third-party damages from war, terrorism, piracy, and similar risks will no longer be covered.

The seven associations announcing withdrawal from 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War Risk: Specialized Coverage Withdrawn

War risk insurance is a specialized type of coverage that provides protection against third-party damages caused by war, terrorist attacks, and piracy. The seven associations’ decision to terminate this coverage applies only to war risk insurance; other policy terms and conditions remain unchanged.

Once war risk coverage is terminated, vessels entering the Persian Gulf will be unprotected against these risks, directly affecting the commercial judgment of shipowners and charterers regarding routes in the region. Risk appetite is expected to be significantly suppressed.

According to the notice, the geographic scope of this war risk coverage termination includes not only the Persian Gulf but also specific adjacent waters, such as the Gulf of Oman, the waters west of Cape al-Hadd, and extending northeastward to the border area between Iran and Pakistan.

The IG is composed of non-profit mutual insurance associations that provide maritime insurance coverage for approximately 90% of the world’s deep-sea shipping tonnage, serving as a core pillar of the international shipping insurance system. The seven associations making this decision represent over half of the IG’s 12 members, and their joint action signals an important market trend in global shipping insurance.

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