The coverage aims to address growing concerns over shipping threats in regions like the Red Sea, executives from both companies confirmed.
Ports worldwide are facing a range of challenges that are significantly affecting the flow of goods. Among these are attacks on commercial shipping by Yemen’s Houthi forces and the potential for strikes at U.S. terminals, heightening the risk of delays and economic losses. The new insurance offering from Marsh and TMK is aimed at mitigating these risks for ports and ensuring continuity in global trade operations.
Ed Parker, head of special risks at TMK, said: “Recent geopolitical turmoil has exposed a clear gap in the standard cover available to ports and other cargo facilities. The threat posed by conflict has rendered many established routes impassable,”.
The new insurance facility, which the companies said was the first of its kind, will provide cover up to a limit of $50 million per incident.
“This facility has no geographical limit as to where the disruption event could take place. For example, ports in the U.S. are concerned with trade disruption losses if China invades/blockades Taiwan or a port in Singapore may have concerns if the Suez Canal was blocked for a period of time,” Louise Nevill, CEO of UK Marine at Marsh Specialty, told Reuters.
Nevill said the gap in cover for these risks was assessed after companies suffered losses from the Red Sea attacks and noted that they have already received interest from U.S. West Coast ports concerned about potential disruptions near Taiwan, as well as from ports in the Middle East facing geopolitical risks.
“The standard ports and terminals policies would not respond to these incidents as there was no physical damage or indeed berth blockage yet they were suffering significant losses of revenue,” she said.She added: “In the last few years, we have seen significant disruption events occurring, whether it is war in Ukraine, the Ever Given (container ship) blocking Suez, increased hurricanes and typhoons and of course a worldwide pandemic. These ‘once in a lifetime’ events are occurring on a regular basis.”
