Marine Insurers Seeking Exclusions for U.S. and British Vessels from Red Sea Coverage

Some marine insurers are now avoiding insuring U.S. and British merchant ships against war risks in the southern Red Sea, following recent Houthi attacks in response to airstrikes by the United States and Britain. Insurers are seeking exclusions for ships with connections to these countries when providing cover for voyages through the region. This means that they are essentially not offering insurance, as stated by Marcus Baker, global head of shipping and cargo at Marsh.

The fragile security situation in the southern Red Sea has been highlighted by recent missile attacks on commercial vessels in the region, including a Greek freighter and a U.S. bulk carrier. Major shipping companies have paused travel to the area, and there are concerns about the insurance exclusions creating problems due to the broad definition of terms like “interest” and “ownership.”

Coverage for war risks in the region has skyrocketed, with rates now rising to 1% of a ship’s value, up from about a tenth of that a few weeks earlier. This has raised concerns for the entire shipping industry, despite insurers still providing cover for many ships passing through the Bab el-Mandeb.

Source .