LONDON, Sept 19 (Askume) – Tokio Marine Kiln (TMK), an underwriter at brokerage Marsh & Lloyd’s, has set up business interruption insurance for ports to cover growing trade interruption risks such as potential threats to Red Sea shipping.
Ports around the world are grappling with a number of issues disrupting the flow of goods, including attacks on commercial shipping by Houthi rebels in Yemen and threats of attacks on U.S. terminals .
Ed Parker, TMK’s special risks director, said: “Recent geopolitical unrest has exposed glaring gaps in standard coverage at ports and other cargo facilities. The threat posed by the conflict has disrupted many established routes, rendering them impassable.”
The companies said the policy, the first of its kind, will provide up to $50 million in coverage per occurrence.
Lewis Neville, chief executive of British company Marsh Specialty, told Askume: “There is no geographical limit on where disruption may occur. For example, if China invades/blocks Taiwan or a port, US ports are worried about the loss of trade disruption.” If the Suez Canal is blocked for a period of time, Singapore may be worried.
Neville said security gaps were assessed for these risks following the company’s losses in the Red Sea attack.
“It is standard port and terminal policy not to respond to these incidents as they do not cause any physical damage or berth obstruction, but they do result in significant revenue losses,” he said.
Neville said he has also received interest from US West Coast ports, as ports off the Taiwanese coast and in the Middle East could face disruptions due to geopolitical risks.
He said: “Over the last few years we’ve seen major disruptive events, whether it’s the war in Ukraine, long-haul container ships blocking the Suez River, the increase in hurricanes and typhoons, and of course the worldwide pandemic that has been causing so much illness.
“These ‘once in a lifetime’ events happen all the time.”
