War and Strikes Risks Update | 3rd March 20223rd March 2022
The current situation in Ukraine and the related sanctions and export controls are widely known, and many businesses will be unwilling or unable to ship goods to or from the affected region.
War and strikes cover is not automatically available.
Brokers are encouraged to share this update and the information below with cargo policyholders.
For Cargo Insurance policies arranged by NMU, the availability of cover against war and strikes risks is determined by Munich Re Syndicate Ltd (MRSL) by reference to the risk levels within the JCC Cargo Watch List, which are established independently by IHS Markit for the Joint Cargo Committee of Lloyd’s and the IUA (commonly known as “the JCC”).
The geopolitical situation in every country and territory is continually monitored by IHS, and their risk scores are updated monthly, or more frequently if there is particular conflict, unrest or political instability.
There are seven risk levels that correspond to the risk scores:
- Low – 0.0 to 0.7
- Moderate – 0.8 to 1.5
- Elevated – 1.6 to 2.3
- High – 2.4 to 3.1
- Very High – 3.2 to 4.3
- Severe – 4.4 to 6.4
- Extreme – 6.5 and higher
The JCC Cargo Watch List was most-recently updated on 23rd February 2022, with the following significant change(s):
- The risk score for Russia (Ground: within 200km of the land border with Ukraine. Marine: Black Sea coast within territorial waters) increased to High 2.7 from Elevated 1.8.
- The risk score for Ukraine increased to Very High 3.3 from High 2.7 (except as below)
- The risk score for Ukraine (Ground: Donbass conflict zone; Marine: Black Sea coast and Sea of Azov within territorial waters) increased to Severe 4.4 from High 2.7
Corresponding MRSL rate changes take effect from 09:00 GMT on 3rd March 2022.
Details of the cover provided against war and strikes risks can be found in the policy wording and/or the applicable Institute War Clauses and/or Institute Strikes Clauses which form part of the policy.
- War risks means war, civil war, rebellion, insurrection or civil strife. It also includes damage caused by derelict mines, torpedoes, bombs or other weapons of war. War risks are only covered during transit by sea or air.
- Strikes risks means damage caused by strikers, riots or civil commotions (“SRCC”). It also includes terrorism in the UK.
If countries or territories are in the news because of events like these, then it can be considered likely that exposures will at the very least be subject to additional premium. And in particular, for those classified as Very High, Severe or Extreme by IHS, the availability of war and strikes cover should be checked in advance, as explained below.
Information about risks posed worldwide can also be found at https://www.cia.gov/library/publications/resources/the-world-factbook/index.html
For most countries and territories, NMU premiums are inclusive of MRSL’s basic rate for war and strikes risks cover, the exceptions being:
- Where covered, countries and territories for which the Risk Level is Elevated or High may be subject to a surcharge rate typically not exceeding 0.10% and 0.15% respectively.
- The availability of cover (if any), the terms and conditions and the rate for countries and territories where the Risk Level is Very High, Severe or Extreme is subject to change, and will only be determined at the time of shipment or the attachment of risk; notice to us of any such shipments or exposures is therefore required.
- In exceptional circumstances, the availability of cover (if any), the terms and conditions and the rate for certain other countries and territories will also only be determined at the time of shipment or the attachment of risk, even though the Risk Level is High; notice to us of any such shipments or exposures is therefore required.
The surcharge rate or the availability of cover (if any) is applied in the following way:
- For transits, at the time transit commences.
- For storage that is not in the ordinary course of transit, if insured, by reference to the most recent update to the JCC Cargo Watch List on an ongoing basis (SRCC cover only).
Full details of the countries and territories within these groups can be found below.
This information is valid until the next change in the JCC Cargo Watch List, which is reviewed every month, or more frequently at times of heightened tension.
Risk Level = Elevated1
These countries and territories are typically subject to a surcharge rate not exceeding 0.10%:
Risk Level = High1
These countries and territories are typically subject to a surcharge rate not exceeding 0.15%:
DR Congo2 11
Gulf of Aden6
Risk Level = High, Very High, Severe or Extreme1
The availability of cover (if any), the terms and conditions and the rate for these countries and territories is subject to change, and will only be determined at the time of shipment or the attachment of risk; notice to us of any such shipments or exposures is therefore required:
Central African Republic2 3
Gulf of Guinea7
Occupied Palestinian Territory12
For more information about war and strikes or cargo insurance, please contact your NMU cargo specialist.
1 As at 3rd March 2022.
2 Legislation in these countries may prohibit the insurance of imports or exports outside them.
3 Sendings to or from these locations are not normally covered unless specifically agreed by us in writing.
4 Within 200km of land border with Ukraine plus Black Sea within territorial waters.
5 Plus Black Sea within territorial waters.
6 Gulf of Aden sea area and to 65° E off the Somali coast, bound to the north by latitude 23°30 N, and bound to the south by 12°S and in the Red Sea by 14°N.
7 Gulf of Guinea, in the sea area between 4°30’W 5°8’44.274″N and 3°6’13.966″W 2°20’12.8″N in the west, and 9°46’18.636″E 2°20’12.8″N (Cameroon-Equatorial Guinea border) in the east.
8 Assam, Bihar, Chhattisgarh, Jharkhand, Kashmir, and Nagaland.
9 North Caucasus Federal District, less Stavropol Territory.
10 Republic of Congo.
11 Formerly Zaire.
12 The Gaza Strip and the West Bank, including East Jerusalem.
13 Persian or Arabian Gulf and adjacent waters including the Gulf of Oman west of Longitude 58°E, in respect of bulk oil and petrochemical products including LNG and LPG.
14 Singapore Strait in its entirety and the South China Sea bound at 4°N to the north, 1°N to the south and 106°E to the east.