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Cautious cargo underwriters cancel cover on Ukraine and Russia

Situation rapidly changing and shipowners will increasingly have to use judgement as sanctions evolve, says expert

Several cargo underwriters are said to be giving Russian exports a wide berth to avoid being seen as doing anything that could aid any war efforts

CARGO underwriters are taking the decision not 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.

The comments from market sources come after claims that 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,” said one leading underwriter.

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 that we are not contravening any sanctions at payment stage.”

MIS Marine, a British company specialising in marine assurance vetting procedures, said that 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,” it said. “There is more to it than just geopolitical sanctions, such as crew safety and a moral obligation to act.”

Judgements 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.


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