March 20 (Reuters) – Insurance giant Chubb said on Friday its maritime insurance facility will now be available to ships transiting the Strait of Hormuz where traffic has been paralyzed due to the U.S.-Israel conflict with Iran.
Chubb will be the lead partner on the U.S. International Development Finance Corporation’s $20 billion Maritime Reinsurance Plan aimed at resuming commercial shipping in the Gulf, the agency said last week.
So far, there has been no let-up in hostilities and no sign ships can safely pass through the Strait of Hormuz, where about a fifth of the world’s oil passes, raising the risk of the worst disruption to energy supplies since the oil shocks of the 1970s.
However, Chubb said their facility will be available under certain conditions, which they did not elaborate.
The wartime maritime facility will be available for hull and liability as well as cargo, Chubb said, and coverage will be offered for war hull risk insurance, for war protection and indemnity (P&I) insurance and war cargo insurance.
Maritime insurance covers ships and cargo against risks such as accidents, piracy or conflict, with shipowners paying premiums that rise as insurers assess the likelihood of losses.
War-risk coverage is typically excluded from standard policies and must be purchased separately, often at sharply higher premiums for vessels sailing through conflict zones.
Without such coverage, ships and cargo worth hundreds of millions of dollars would be exposed to losses from attacks or seizures, leaving owners and financiers vulnerable and discouraging vessels from transiting those waters.
Additional American insurance companies for the facility will be detailed in the coming days, Chubb said.
(Reporting by Pritam Biswas in Bengaluru; Editing by Devika Syamnath)
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