First Global Business Interruption Insurance for Ports Launched

Broker Marsh and Lloyd’s underwriter Tokio Marine Kiln (TMK) have collaborated to offer business interruption insurance specifically tailored for ports. This insurance aims to protect against the increasing risks of trade disruptions, such as threats to shipping in the Red Sea. The global ports industry is currently facing various challenges that are affecting the flow of goods, including attacks by Yemen’s Houthis on commercial shipping and the potential for strikes at terminals in the United States.

The new insurance facility, described as the first of its kind, provides coverage up to $50 million per incident. Unlike traditional policies, this insurance has no geographical limitations, meaning it can apply to disruptions occurring anywhere in the world. The need for this specialized insurance was highlighted by recent geopolitical conflicts that have made established trade routes impassable. Ed Parker, head of special risks at TMK, emphasized the importance of filling this gap in standard insurance coverage for ports and cargo facilities.

Louise Nevill, CEO of UK Marine at Marsh Specialty, explained that the idea for this insurance arose after companies experienced losses from attacks in the Red Sea. The standard insurance policies for ports and terminals were unable to address these incidents as they did not involve physical damage or berth blockage. Interest in this new insurance facility has already been expressed by ports on the U.S. West Coast, concerned about potential disruptions related to Taiwan, as well as ports in the Middle East due to geopolitical risks. Nevill highlighted the increasing frequency of major disruption events in recent years, such as wars, natural disasters, and the COVID-19 pandemic, emphasizing the need for tailored insurance solutions in the face of such challenges.

Source