Challenges for war risk insurance
Burkhard Fischer, chairman of the Association of Average Adjusters, highlighted the complexities marine insurers face due to the Russia-Ukraine war during his address at their annual conference in London. He discussed the challenges in war risk insurance, particularly with vessels trapped in Ukrainian ports, which were initially covered by basic war risk insurance without additional premiums.
Fischer noted that the traditional war risk cover was designed for peacetime risks like derelict mines, and not for active war zones, leading to significant complications when the war broke out. He pointed out legal precedents and contractual nuances affecting the liabilities of shipowners and charterers.
The war has revealed gaps in existing insurance frameworks, especially regarding claims for constructive total loss (CTL) and the levying of additional premiums. Fischer also discussed the implications of detainment on loss of earnings and the intricacies of total loss settlements.
The situation underscores the need for a reassessment of war risk insurance premiums and coverage in the face of active conflicts, taking into account the unique effects on detained vessels. (pb)