Marine insurance: can new conflicts be covered by old clauses?

A few weeks ago, I was reviewing a client’s open cover policy, a fairly standard exercise, when I found myself rereading the Institute War Clauses Cargo from 2009, cross-referencing Hull clauses from 1983, and reaching further back to the Marine Insurance Act 1906. At one point I stopped and thought: these are the documents the market is relying on today, with vessels stranded in the Persian Gulf and the Strait of Hormuz looking more fragile by the week. That is not a criticism, but it is an observation worth stating plainly.

The marine war insurance framework is a serious and carefully constructed body of work. The Institute clauses, the Joint War Committee (JWC), the London Market’s mechanisms for cancellation and reinstatement – these have been tested by the Falklands, the tanker war of the 1980s, the Gulf War, September 11, and many smaller conflicts in between.

They have served shipping and trade well. The market’s response to the current crisis, maintaining capacity, adapting terms, communicating clearly through the International Union of Marine Insurers (IUMI), reflects genuine institutional resilience.

But resilience is not the same as fitness for purpose. The current situation in the Middle East, with simultaneous disruptions in the Red Sea, the Gulf of Aden, and now the Persian Gulf, is stress-testing the clause architecture in ways that go beyond previous episodes. The question is whether elements of that architecture need updating.

The time-lag problem

Every significant amendment to marine war clauses has been reactive, written in response to events that have already occurred. The detainment threshold of 12 months, now standard in English law and the Nordic Plan, was crystallised after the Bamburi arbitration in 1982 and the experience of ships caught in the Shatt al-Arab. The London Blocking and Trapping Addendum (LPO 444) was drafted in 1984 to fill gaps where physical waterway blockages did not meet the legal definition of detainment. Terrorism language was strengthened after 2001. The pattern is consistent: clauses catch up with crises, rather than anticipate them.

Historically, this lag has not proved critical, as most crises resolved before claims fully developed. Today, that assumption looks less certain.

If vessels remain unable to transit key waterways for extended periods, questions that are currently theoretical, including what constitutes blockage, whether threat-based route avoidance is covered, and how the 12-month clock applies in prolonged uncertainty, will move quickly into arbitration. It would be better for everyone if the market had already addressed these questions before they are tested in disputes.

This is not an argument for alarm, but for preparation. The Joint Cargo Committee’s October 2025 update to the Global Cargo Watch List, and the JWC’s March 2026 expansion of Listed Areas, show that the market’s administrative machinery is responsive. The question is whether the underlying clause language, some of it unchanged for decades, should be part of that same ongoing review.

The cargo coverage gap

Hull underwriters and their clients are well-versed in the mechanics of war risk, including the Notice of Cancellation, Additional Premiums, and Listed Areas. There is a functioning, if expensive, dialogue between owners, brokers, and the market. Cargo is less well-served, and the current crisis is exposing some structural gaps worth naming.

Cargo war coverage expires at discharge or within 15 days of port arrival, which means goods caught in a blocking or trapping scenario after arrival may be outside the policy period entirely.

Standard cargo war clauses exclude claims based on frustration of the voyage or adventure, limiting recovery when a shipment cannot reach its destination due to protracted conflict. Unlike hull, cargo war policies carry no equivalent to the Detainment Clause, meaning there is no agreed threshold at which a stranded cargo can be declared a constructive total loss. These gaps are not new, but prolonged disruption makes them materially more significant.

Cargo buyers, particularly those reliant on Middle East trade routes, would benefit from a clearer market conversation about what their war coverage does and does not provide. That is partly a broking issue, but it is also a product design question.

What comes next

It is worth being clear about what is working. The IUMI’s communications in March and April were timely, well-calibrated, and important in preventing the misreading of Notices of Cancellation as market withdrawal. The confirmation that capacity remains available across hull, cargo, liability, and offshore energy, on a selective, case-by-case basis, is reassuring. The shift towards voyage-specific underwriting, while operationally demanding, is a sensible response to an environment where aggregation risk is difficult to model in advance.

The harder question is what comes next if the situation persists. The marine insurance market has a long tradition of adapting through practice, including endorsements, addenda, committee guidance, and new clause editions. The speed and complexity of the current environment may require that process to move faster, rather than wait for events to force change.

There is no shortage of expertise in this market. The question is whether this moment will be used to act on it.

This is guest post by Patrizia Kern-Ferretti, chief insurance officer at Breeze