Protection and Indemnity insurers have set a new excess war risk sub-limit for ships trading to areas affected by Russia’s war with Ukraine.
The International Group’s $3bn general excess of loss reinsurance agreement includes $500m excess war P&I cover.
New limits have been under negotiation for ships trading to Russia and areas in Ukraine and Belarus ahead of the upcoming 20 February renewal after reinsurers introduced exclusion clauses on cover.
Both Skuld and the Shipowners’ P&I Club have now issued a statement saying the new sub-limit will be set at $80m for mutual P&I covers.
“We can confirm that for vessels transiting and/or calling within all Russian waters including their coastal waters up to 12 nautical miles offshore, and certain European waters cover is sub-limited to $80m any one event, each vessel,” Skuld said in a statement.
As well as Russia, the Black Sea and Sea of Azov are included in the new limit, as well as the inland waters of Ukraine, Russia and parts of Belarus are also affected.
P&I clubs earlier had to suspend Russian-related war risk cover for their fixed premium and charterers’ business which are outside the International Group agreement.
Ships trading to Russia and affected areas now make up only a small fraction of the ships covered by the International Group’s pooled covers.
The International Group policy is an excess cover and shipowners also have to purchase primary cover.
The International Group’s $500m of excess war cover for all other regions is unaffected.
The Russian conflict exclusion clauses were introduced by the International Group’s reinsurers in an attempt to limit further losses from the ongoing conflict in Ukraine.