GIC Re withdraws marine hull war cover in high-risk regions

In a notice issued on March 1, GIC Re said the changes took effect from 7 pm India time Sunday. The reinsurer will cease to provide Marine Hull War risk cover in the specified zones from 7 pm on March 3 (Tuesday).

The move comes amid elevated geopolitical tensions in parts of West Asia, the Black Sea region and the Red Sea, where shipping routes have faced heightened security risks in recent years.

Ship owners operating international routes will now have to review their insurance arrangements carefully to ensure continued protection beyond March 3.

The revised High Risk Areas (HRA) include Pakistan waters, the Persian or Arabian Gulf and adjacent waters and ports, including the Gulf of Oman, Iran and all other countries under sanctions by the UN, UK, US or EU; and the Sea of Azov and parts of the Black Sea defined by specific geographical coordinates. The list also covers waters of Ukraine, Russia and Belarus, as well as parts of the Indian Ocean, Gulf of Aden and Southern Red Sea.

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GIC Re has made it clear that Breach of Warranty cover will not be available in respect of any of these seven zones, therefore, if a vessel passes through, calls at a port, or is dry-docked in any of the listed areas, it will be treated as a breach of warranty under the policy.
In effect, ship owners and operators will not have war risk protection from GIC Re for operations in these regions after the cut-off date.Marine Hull War Risk insurance typically covers physical damage to ships arising from war, civil war, hostilities, terrorism, piracy and related perils. The withdrawal of cover in these areas could raise insurance costs for ship owners operating in or near conflict-prone waters, as they may need to seek alternate cover at higher premiums

In 2022, GIC had amended the policy clause, to include that while standard notice period is seven days, if the situation involves any of the five powers – China, France, Russia, the United Kingdom or the United States – the notice period reduces to 72 hours. Since the United States is involved in the current situation, the shorter 72-hour clause applies. The notice affects only War Risks cover, and amendments become binding automatically if no objection is raised.

GIC Re’s move comes as the Directorate General of Shipping has issued a fresh advisory to Indian-flag vessels amid rising tensions around Iran and the Strait of Hormuz. Ship owners have been asked to conduct risk assessments, security drills, test alert systems, and follow strict reporting protocols during transit.