Cautious cargo underwriters cancel cover on Ukraine and Russia
Several cargo underwriters are said to be giving Russian exports a wide berth to avoid appearing to aid any war efforts
Cargo insurers are refusing to cover consignments heading to Russia or Ukraine and even nearby countries, citing reputational risks and the potential difficulties of paying out on insured claims, market sources said.
The news comes amid claims some cargo underwriters were giving Russian exports a wide berth to avoid being seen as doing anything that could aid any war efforts.
“Our first priority is to protect our business and most underwriters have therefore cancelled cover to Russia, Ukraine and the surrounding areas,” one leading underwriter said.
While this is not being done expressly on the grounds of not wishing to help Russia, prevention of cover will probably have the same effect, he added.
Most cargo insurers reinsure into London, Europe or US and therefore must abide by any sanctions in place.
“Even if an insured claim occurs, we would have to make very sure we are not contravening any sanctions at payment stage,” the underwriter said.
MIS Marine, a British company specialising in marine assurance vetting procedures, said the situation is changing all the time, with around 300 new sanctions applied in recent days.
“This is not just a sanctions matter but also a safeguarding matter,” the company said. “There is more to it than just geopolitical sanctions, such as crew safety and a moral obligation to act.”
Judgments for shipowners will become tougher still as sanctions moves from measures targeting individuals and companies towards port call bans for any vessel carrying a Russian product.
This article first appeared in Lloyd’s List, a sister publication of Insurance Day
