Global shipping entered 2026 with rising geopolitical tension and immediate insurance consequences. War Risk Insurance now sits at the center of maritime risk management.
The decision followed attacks on commercial vessels and the escalation of military conflict around the Strait of Hormuz.
War risk insurance statements from the International Group of P&I Clubs have therefore become a key operational reference for shipowners and operators.
Statements from the International Group P&I Clubs
The International Group of P&I Clubs (IGP&I) provides liability cover for roughly 90% of the world’s ocean-going tonnage through a shared reinsurance system.
The group includes thirteen mutual insurance clubs:
- American Club
- Britannia P&I Club
- Gard
- Japan P&I Club
- London P&I Club
- NorthStandard
- Shipowners Club
- Skuld
- Steamship Mutual
- Swedish Club
- UK P&I Club
- West of England P&I Club
- Standard Club (now part of NorthStandard)
In March 2026, several clubs issued coordinated circulars following new war-risk developments.
Leading insurers including Gard, Skuld, NorthStandard, the London P&I Club, and the American Club confirmed that war risk cover for ships operating in Iranian waters and nearby Gulf areas would be cancelled with short notice.
These cancellations generally took effect around 5 March 2026.
The clubs acted after attacks damaged multiple tankers and left more than 150 ships stranded near the Strait of Hormuz.
Most clubs also stated they would consider buy-back options or additional war risk premiums (AWRP). These arrangements allow operators to regain coverage for specific voyages.
The International Group also confirmed the continuation of the excess war risks P&I cover program for the 2026–2027 policy year under its shared reinsurance structure.
This cooperative system spreads catastrophic risks among the clubs and their global reinsurance partners.
JWC Listed Areas 2026 and the map of excluded maritime zones
The Joint War Committee (JWC) of Lloyd’s Market Association defines areas considered high-risk for war and terrorism.
The committee updated its Listed Areas in early 2026 due to escalating conflict in the Middle East.
Key maritime zones include:
- Persian Gulf
- Iranian territorial waters
- Strait of Hormuz
- Gulf of Oman
- Waters near Bahrain, Qatar, Kuwait and Oman
- Parts of the Red Sea and Gulf of Aden
- Black Sea regions affected by the Russia-Ukraine conflict
London insurers widened the high-risk zone across several Gulf states as tensions increased.
Operators must report voyages entering these areas to their insurers before departure.
Most clubs require a 48-hour or 7-day notice period before cancelling cover or applying special conditions for war zones.
Ships entering JWC Listed Areas usually face:
- Additional war risk premiums
- Voyage-specific underwriting approval
- Reduced policy limits
- Possible coverage exclusions
These requirements affect voyage planning and charter negotiations.
What War Risk Insurance Covers for ship operators
War Risk Insurance protects shipowners against losses caused by political violence and military conflict.
Standard marine policies normally exclude these risks. War risk cover fills that gap.
Typical coverage includes:
1. Damage to the vessel
Insurance compensates shipowners when missiles, mines, drones, or military action damage a ship.
2. Crew injury or death
War-related incidents can trigger compensation for seafarers and repatriation costs.
3. Detention or seizure
Some policies cover losses when authorities or armed forces capture a vessel.
4. Terrorism and sabotage
Many policies include acts of terrorism against ships, ports, or maritime infrastructure.
5. Sue and labour costs
Owners receive reimbursement for emergency actions taken to minimize damage or protect the ship.
Within the International Group system, the excess war risks P&I cover can reach hundreds of millions of dollars, depending on vessel value and policy structure.
This protection plays a crucial role in protecting both shipowners and charterers.
Without it, banks and cargo interests may refuse to allow voyages into high-risk waters.
Operational impact for shipping companies
The cancellation of war risk cover has immediate consequences.
Shipowners often reroute vessels away from conflict zones. Freight costs then rise sharply because longer voyages require additional fuel and time.
The Strait of Hormuz carries about 20% of global oil shipments, so disruptions quickly affect energy markets.
War risk premiums can also increase dramatically. In some cases, costs jump from 0.2% to around 1% of the vessel value per voyage.
These developments influence tanker markets, LNG transportation, and global supply chains.
