What is war risk insurance?
Standard marine cargo insurance policies exclude losses caused by war, terrorism, piracy, and related perils. War risk insurance is a separate policy or endorsement that covers these excluded risks. In the current environment, with active threats in the Red Sea, Strait of Hormuz, Black Sea, and other regions, war risk coverage has become essential for many trade routes.
What does war risk insurance cover?
War risk policies typically cover loss or damage caused by war, civil war, revolution, or insurrection, capture, seizure, or detention by military or political forces, mines, torpedoes, bombs, or other weapons of war, piracy and hijacking, and terrorism.
The specific terms vary by policy, and shippers should review their coverage carefully to understand exactly what is and is not included.
How premiums are determined
War risk premiums are based on the assessed risk of the specific trade route, the cargo value, the vessel details including flag state and security measures, and the designated war risk areas as defined by the Joint War Committee of Lloyd's of London.
The Joint War Committee maintains a listed areas document that identifies high-risk zones. As of 2026, listed areas include the Red Sea and Gulf of Aden, the Persian Gulf and Strait of Hormuz, the Black Sea and Sea of Azov, and parts of the eastern Mediterranean.
Current premium levels
War risk premiums for vessels transiting the Red Sea have increased dramatically since the Houthi attacks began. Premiums that were negligible before November 2023 now range from 0.5% to 1% of hull value per transit, which can translate to $100,000 to $500,000 per voyage for large container vessels.
For cargo owners, these vessel-level costs are passed through as war risk surcharges on freight invoices, typically adding $50 to $200 per container.
Separate cargo war risk insurance for individual shipments adds another 0.1% to 0.5% of cargo value depending on the route and insurer.
Do you need war risk coverage?
If your cargo transits any designated war risk area, separate war risk coverage is strongly recommended. Standard cargo insurance will not pay claims resulting from war-related perils. The cost of war risk insurance is small compared to the potential total loss of a shipment.
Estimate your insurance needs
Use our insurance calculator at asrwe.com/tools/insurance-calculator to estimate cargo insurance costs including war risk coverage for your specific shipment.
ASR insurance guidance
We help clients assess their cargo insurance needs and connect them with competitive coverage options including war risk endorsements. Contact us at shipping@asrwe.com or +1 786 373 3003.
