Source: The Guardian; Insurance Business Magazine; Kennedys Law
Date: 4th March 2026 

Marine Underwriters Cancel Cover and Reprice Risk as Strait Disruption Escalates.

Escalating conflict in the Gulf region has prompted leading maritime insurers to cancel war-risk cover for vessels operating in affected waters. The withdrawal applies to ships transiting the Gulf and adjacent routes, particularly around the Strait of Hormuz, a critical global energy corridor. The move reflects heightened exposure to missile strikes, vessel damage, and broader geopolitical instability.

War-risk insurance, which typically protects shipowners against losses arising from war, terrorism, and related perils, operates under short cancellation clauses, often seven days. Underwriters have exercised these clauses to withdraw or renegotiate coverage, with reinstatement offered only under revised and more expensive terms. While standard mutual protection and indemnity cover remains unaffected, non-poolable war cover for higher-risk voyages is being rapidly repriced.

Premiums for Gulf transits are expected to rise significantly, potentially doubling or more, depending on vessel type and route exposure. If hostilities persist, some insurers may reduce capacity or decline to quote altogether. Reinsurers are also likely to tighten terms, increasing attachment points and reducing available limits for high-risk areas.

At the same time, the effective closure of the Strait of Hormuz, through which roughly 20% of global oil and a substantial share of liquefied natural gas shipments pass, has intensified pressure on shipping markets. Vessel rerouting, stranded tankers, and rising oil prices are driving freight volatility, while emergency surcharges are being introduced on affected trade lanes.

For shippers, importers, and exporters, the immediate impact lies in higher marine insurance costs and increased freight rates. War-risk premiums surge, emergency conflict surcharges, and rerouted sailings will raise overall landed costs for cargo moving to or from the Middle East.

Cargo owners should review the scope of war and strikes extensions under their marine cargo policies, particularly in relation to delay, detention, and rerouting. Where vessels are stranded or prevented from transiting affected waters, interpretation of policy exclusions may become critical.

Businesses trading through the Gulf region may face longer transit times, reduced vessel availability, and potential booking disruptions as shipowners reassess risk exposure. Proactive engagement with insurers, brokers, and logistics partners will be essential to manage cost escalation and maintain supply chain continuity during this period of heightened maritime risk.

P/S: This situation remains highly dynamic and may change at short notice as geopolitical developments unfold. The information provided reflects the status at the time of writing. Should there be any significant updates, we will share them accordingly to keep our customers and partners informed. Please contact your respective Logfret representative should you require any clarification.