Ship Insurers Cancel War Risk Cover Due to Iran Conflict

Several marine insurers said they are canceling war risk cover for ships due to the conflict in Iran and the Gulf.

Insurers including Gard, Skuld, NorthStandard, the London P&I Club and the American Club said their cancellations will take effect from March 5, according to notices dated March 1 on their websites.

War risk cover will be excluded in Iranian waters, as well as the Gulf and adjacent waters, according to the notices.

Skuld added in its notice that it was working on a buy-back option to reinstate cover.

Japan’s MS&AD Insurance Group told Reuters it had suspended underwriting of a range of insurance policies covering war risks in the waters around Iran and Israel and neighboring countries.

Tensions in the Middle East have escalated sharply after the U.S. and Israeli forces launched strikes on Iran over the weekend, prompting Tehran to say it had closed navigation through the Strait of Hormuz, a key chokepoint for global oil and gas flows.

Several tanker owners, oil majors and trading houses have since suspended crude, fuel and liquefied natural gas shipments through the narrow waterway, and satellite data has shown vessels accumulating near key United Arab Emirates ports such as Fujairah.

Ship-tracking data on Sunday showed the disruption growing, with at least 150 tankers – including crude and LNG carriers – anchored in open Gulf waters beyond the Strait of Hormuz and dozens more stationary on the other side of the chokepoint.

The risks intensified further after at least three tankers were damaged off the Gulf coast and one seafarer was killed.

(Reporting by Emily Chow; additional reporting by Trixie Yap and Nidhi Verma; writing by Jeslyn Lerh and Florence Tan; editing by Sonali Paul and Jamie Freed)