Insight

Changes to War Risk Areas - JWLA025 dated 21.09.20

Published

Read time

On 21st September 2020 the Joint War Committee implemented changes to the Areas of Perceived Enhanced Risk that are used as the foundation for trading exclusions in War Risks insurance policies.

The following listed areas have been amended within the list:

Gulf of Guinea

The waters enclosed by the following boundaries:
a) On the west, from the coast of Togo 6° 06′ 45″ N, 1°12′E, south to
b) high seas point 0° 40′ S, 3° 00′ E
c) and then east to Cape Lopez Peninsula, Gabon 0°40′S, 8° 42′E.

The above area has been amended from the previously listed area “Gulf of Guinea, but only the waters of the Togolese, Beninese and Nigerian Exclusive Economic Zones north of Latitude 3° N”.

How will your policy be affected?

The above excluded areas will most likely be incorporated into your policy of insurance. There are usually two ways in which this could happen:

  • If your War Risks insurance is placed with or led by a “Club” or “Association”, the insurer will most likely issue a circular that will apply to all policies of insurance noting that the new areas will automatically be incorporated into  the policy with effect from a future date.
  • If not, your War Risks lead insurer will need to issue notice (usually to your broker) that the new list of areas will be incorporated specifically into your policy with effect from a future date.

Insurers usually allow between 3-7 days for such a change to come into effect.

Any policies that contain pre-agreed rates for trade into excluded areas might need to have those rates revalidated.

We draw our readers’ attention to the requirement in most Protection & Indemnity policies of insurance that underlying war risks insurance, including a primary layer of war P&I cover, needs to be in place. This includes the period while vessels are within the new JWLA025 listed areas.

Additional War Risks Premiums (AWRP)

It remains to be seen what additional premiums insurers will charge for calling, sailing through or within the new excluded areas. Owners able to pass on premiums to charterers for additional costs should make charterers aware that the owner’s War Risks policy will soon incorporate the newly excluded areas. Assureds with long-term operations in the newly excluded areas might also wish to review their contracts to identify if they are able to pass on such additional costs.

Kidnap & Ransom insurance

Vessel operators that purchase K&R insurance on a case-by-case basis should note that K&R insurance can be purchased not only for the period the vessel is in a high risk area, but also for the ‘approach’ – for example starting cover a few days prior to the approach of the excluded area. There is usually little to no cost impact for this.

 How can Howden help?

Howden’s marine clients will over the next few days receive an illustration of the new war risks areas. If this does not reach you, please let us know. This illustration should enable your operational and commercial teams to identify the new areas visually and to plan for the changed dynamic that may arise in respect of existing and future trade to the new defined listed areas. Please let us know if a quote is needed for trading in any existing or newly defined listed areas.

For any questions regarding the contents of this Marine Client Advisor or for any other marine insurance enquiries please do get in touch. 


Howden Insurance Brokers is not a technical, commercial or legal adviser. Any commentary made in this document should not be construed as such, and we do not guarantee in any way the accuracy of the resources used or referenced in this document. In case of doubt, formal advice should be obtained that is directly relevant to your circumstances. 

We're always here to help

Speak to our Marine team

Let's talk...

+971 4357 3835 

We'll put you in touch with the person best equipped to help.


Our office locations:

Abu Dhabi Dubai

P.O. Box 44897
Office No. 303
Bloom Central/Marriot Building
Near Al Wahda Mall
Abu Dhabi

P.O. Box 49195
East Wing - 1st Floor
Latifa Towers
Trade Centre 1, Sheikh Zayed Road
Dubai, U.A.E.
 

Call us on +971 4357 3835 or drop us a message below and we'll get back to you as soon as possible

Preferred method of contact
Preferred method of contact


Find out more information about grievance procedures here.

CAPTCHA
2 + 6 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.