Middle East Conflict: Marine Insurance and Reinsurance Implications
War, disrupted trade routes and changing terms demand a coordinated review of the original insurance, the reinsurance programme and the evidence supporting each claim.
The Middle East conflict continues to test the relationship between maritime operations and the insurance arrangements supporting them. The International Maritime Organization’s regional update of 22 October 2026 describes continuing instability and serious concerns for crews and vessels. For insurers and commercial clients, the immediate task is to establish how the facts of each incident engage the applicable insurance and reinsurance contracts. [1]
In my view, the response should combine early factual investigation with a review of cover across the insurance and reinsurance programme. Decisions about routing, mitigation, settlement and recovery should be taken with an understanding of the contractual consequences.
Identify the cover before assessing the claim
Hull and machinery insurance, cargo insurance and protection and indemnity cover address different interests. IUMI’s June 2026 statement distinguishes property-related marine cover from liability risks generally insured through P&I clubs. War-risk protection must then be examined within the particular programme: the relevant peril may be addressed by a separate placement, an extension or an exclusion. The presence of one form of cover does not answer the questions arising under another. [2]
Cancellation notices also require precise reading. Gard’s circular of 12 August 2026 followed a reinsurance notice and amended specified war-risk covers for defined waters. It expressly preserved other terms and stated that mutual P&I Excess War Risks cover was unaffected. This illustrates why a report that “marine insurance has been cancelled” may obscure the actual contractual position. [3]
Separate physical loss from the cost of disruption
A damaged vessel, deteriorated cargo, an additional voyage and a missed delivery date raise different coverage questions. Where English law governs, section 55 of the Marine Insurance Act 1906 links recovery to proximate cause, subject to the policy and the Act. It also excludes loss proximately caused by delay in ship or goods insurance unless the policy provides otherwise, even where an insured peril caused the delay. That rule should not be applied automatically to a contract governed by another law. [4]
Consider a hypothetical shipment diverted following an attack, with the cargo subsequently damaged during extended storage. The investigation should establish when the damage occurred, what caused it, whether transit cover continued and what reasonable protective measures were available. Labelling the entire loss “war-related” leaves those questions unresolved.
Review the reinsurance response separately
The original policy and the reinsurance contract should be examined side by side. The insurer’s obligation to its policyholder and its ability to recover from a reinsurer are distinct issues. Relevant questions include whether the business falls within the treaty, which exclusions apply, how attachment is defined and whether notification or claims-cooperation requirements have been satisfied.
Aggregation deserves particular attention. A series of attacks, a closure of a waterway and losses during prolonged detention may share a geopolitical background while presenting different contractual connections. The analysis should begin with the actual event, occurrence or originating-cause wording. It should address the geographical and temporal relationship between losses, any applicable hours clause, retentions, limits and reinstatements. A single conflict should not simply be assumed to constitute a single insured event.
Settlement strategy should therefore include a review of consent, control and follow-the-settlements provisions before commitments are made. Contemporaneous correspondence explaining the factual and legal basis of a settlement may be central to a subsequent reinsurance recovery.
Check permissions, notices and sanctions together
The Joint War Committee identifies areas of enhanced risk and notification expectations; it does not set individual premium terms. Its current commentary also identifies legal issues surrounding passage through the Strait of Hormuz. An insurer’s agreement to a voyage should not be treated as resolving every sanctions or payment question. The relevant jurisdictions, counterparties, service providers and proposed transactions require their own assessment. [5]
Prepare the claim while managing the incident
I would begin with a single chronology covering the voyage, warnings, routing decisions, policy changes, notices and the development of the loss. Preserve the applicable policy versions, endorsements, reinsurance documents, survey material and mitigation records. Allocate responsibility for notices under each contract and record the reasons for material decisions.
For Israeli businesses and insurers with international placements, governing law, jurisdiction and the interaction between contractual layers should be addressed early. Careful coordination can expose a gap while there is still an opportunity to manage it. The objective is a defensible coverage position supported by evidence and a clear route from the original claim to any reinsurance recovery.
Sources
Law and sources reviewed as at 24 October 2026. General commentary only; the applicable law, facts and policy wording must be considered in each matter.