The ongoing conflict in Iran and continued disruption of shipping through the Strait of Hormuz are creating significant economic challenges for shipping companies, energy businesses and cargo owners while also exposing gaps in traditional insurance coverage. As companies contend with higher transportation costs, rerouting expenses and operational disruptions, insurers and policyholders are assessing how existing policies respond to losses that often stem from avoiding physical damage rather than from direct damage itself.
Carlton Wilde told Law360, “We’ve seen insurers more broadly reserving a few billion dollars in hull, cargo, [and] political violence claims, but the economic losses to the shipping lines, energy companies and cargo owners are probably going to be an order of magnitude larger because a lot of these are going to be landing on corporate balance sheets and not necessarily an insurance tower.”
Looking ahead, Wilde noted that the conflict is likely to reshape the marine insurance market during upcoming renewals as insurers revisit their risk exposure in the region. “I think we’re going to see broader geographic exclusions [and] tightened war language, and premium increases will come with that.”