Skuld pulls certain war risk cover amid Red Sea tensions

Marine insurer Assuranceforeningen Skuld (Skuld) has cancelled certain war risk cover for vessels operating in specified parts of the Red Sea, Gulf of Aden and Indian Ocean.

IMAGE: Cargo and tanker vessel activity in Red Sea and Persian Gulf regions on 12 August. MarineTraffic

The move comes amid heightened geopolitical risks and a rise in vessel attacks in the region.

“In light of concerning developments in the Red Sea area, which have materially increased geopolitical and operational uncertainty, the Association [Skuld] has received a notice of cancellation from its reinsurers in respect of certain commercially reinsured war risks,” Ståle Hansen, chief executive of Skuld said.

The cancellation will take effect from 00:01 hours GMT on 16 August and will apply to fixed-premium assureds whose policies include the affected war risk cover.

This includes owners, charterers, offshore operators, yachts, yacht crew liability and other optional covers.

The affected area covers specified waters across the southern Red Sea, Gulf of Aden and parts of the Indian Ocean.

Coastal waters up to 12 nautical miles offshore are generally excluded from the cancellation, although the exemption does not apply to the Bab el-Mandeb Traffic Separation Scheme, the affected Saudi Arabian Red Sea coast or the Yemeni coast.

The notice applies only to the specified war risk cover, while all other terms of insurance remain unchanged.

It does not affect mutual protection and indemnity (P&I) and freight, demurrage and defence (FD&D) cover or Excess War Risks cover provided to assureds with mutual P&I cover.

“We are currently finalising the details of the buy-back option for reinstatement of cover,” Hansen said.

By Konica Bhatt

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