Gard, UK P&I, London P&I, and NorthStandard Join Skuld in Cancelling Red Sea War Risk Cover
Key Takeaways
- •Gard, UK P&I, London P&I, and NorthStandard have each issued cancellation notices for specified war-risk coverage in parts of the Red Sea, Gulf of Aden, and Indian Ocean, following Skuld's earlier cancellation.
- •Gard's cancellation takes effect from 00:01 GMT on August 16 and was prompted by a corresponding cancellation notice from its reinsurers.
- •The cancellations are limited to certain covers and geographic areas and do not constitute a blanket withdrawal of all insurance coverage in the affected region.
- •P&I clubs are mutual insurance associations that provide shipowners with liability coverage separate from standard marine hull policies, with war-risk insurance typically purchased as an additional layer.
- •Houthi attacks on vessels in the Red Sea have already caused major shipping lines to reroute around Africa's Cape of Good Hope, increasing transit times and operational costs on a key trade route between Europe and Asia.
Additional maritime insurers have followed Skuld in cancelling certain war-risk coverage for vessels operating in parts of the Red Sea, Gulf of Aden, and Indian Ocean.
Gard, UK P&I, London P&I, and NorthStandard all issued cancellation notices on Wednesday covering specified war-risk covers in designated areas of the region. The moves follow Skuld's notice, reported by Ship & Bunker yesterday, which cancelled certain war-risk cover in the Red Sea area.
Gard stated that its notice followed a cancellation notice from its reinsurers covering certain war risks in the Indian Ocean, Gulf of Aden, and Red Sea. The cancellation takes effect from 00:01 GMT on August 16.
UK P&I said its notice covers certain war risks in the Red Sea and adjacent waters. London P&I reported that its reinsurers had issued a cancellation notice covering certain war-risk covers for fixed-premium assureds. NorthStandard has also issued a notice covering certain war risks in the Indian Ocean, Gulf of Aden, and Red Sea.
The cancellations apply only to specified covers and geographical areas and do not constitute a blanket withdrawal of all insurance coverage in the region. Protection and Indemnity (P&I) clubs such as Gard, UK P&I, London P&I, NorthStandard, and Skuld are mutual insurance associations that provide shipowners with liability and related coverage distinct from standard marine hull policies. War-risk insurance is typically purchased as a separate layer of protection.
Tensions in the Red Sea have escalated following recent attacks on vessels by the Houthis. The Red Sea and the connected Suez Canal route form one of the world's busiest maritime trade corridors, linking European and Asian markets. Since the Houthi attacks began, a number of major shipping lines and operators have diverted vessels away from the region and rerouted around Africa's Cape of Good Hope, increasing transit times and costs.
Source: Ship & Bunker
