This article was authored and first published by Richard Kamppari Baker (Claims Director at World Insurance).

We’ve had numerous queries regarding shipments to Israel and other Middle East countries affected by the Israel/Hamas war. Notably, whether these shipments are excluded and what happens in the event of an incident.

If your shipments are not going to sanctioned areas, there should be no absolute exclusion per se. Always check your certificate wording to make sure each shipment complies with your policy requirements and whether there are any additional warranties.

Under cargo insurance, most insurers are considering Israel and Gaza as referred countries. As such, the insurers will consider the merits of each shipment before agreeing or rejecting the terms. This will increase premium, and shipments will incur additional time to be processed while they are being referred for consideration. Current shipments already agreed should be unaffected.

Israel’s Ministry of Transport and Road Safety has issued a statement to insist all ports are open and running at full capacity. This seems to be an exaggeration because the state has imposed restrictions on dangerous materials, and ports are operating on an emergency basis.

In the event of a loss resulting from a hostile action or terrorist act, coverage of your cargo insurance cover will depend on whether your policy includes “War clauses.” The Institute Cargo clause excludes hostile acts unless, of course, your policy includes coverage. Check your policy for War Clauses or ask your broker if you are unsure.

If the cargo has been restricted for entry into Israel, you must seek advice from the carrier. They will probably terminate the voyage at a safe port, and the shipper must decide to return or ship to a new destination. The forwarder/carrier could be able to rely on force majeure to minimise against any delay or forwarding claims.

We would like to remind members who have taken out the WCA Forwarder Protect (Freight Forwarder’s Liability) policy about Exclusion 12.6 (“War”) when shipping to this region. Any claim would be excluded if it falls under the 12.6 Exclusion. We recommend contacting your current insurance service provider or refer to your own policy regarding this War exclusion.

The Exclusion would extend not only to loss or damage to cargo but also incidents that might result in delay or abandonment. If the cargo has restrictions into Israel and results in re-routing, insurers would not cover losses resulting from this, including defence cover.

A carrier/forwarder should be able to rely on force majeure defences, but this can depend on your terms and conditions. Therefore, we would strongly recommend any members who enter a service contract within this area to consult legal contract review prior to entering into any agreement.

For more information

If you have any questions about our War Risks Insurance, the impacts of sanctioned areas regarding any of your policies, or you require contract review, please contact us at info@azure-risk.com.

Azure Risk is the official Asia Pacific Broker for World Insurance and partner of the World Insurance Team, proudly serving the members of WCAworld and its affiliates.