Geopolitical tension has pushed marine war risk back into the spotlight, but as a recent analysis piece by Tim Wills, head of marine for Markel Australia, makes clear, the real exposure has shifted well beyond the risk of a vessel or cargo being physically damaged in a conflict zone.
It’s Rarely the Damage That Hurts Most
Physical damage tends to dominate how people picture marine war risk, but it’s often the invisible disruptions that cause the biggest problems. Think of a vessel held at port while owners decide whether to risk a high-threat chokepoint. The ship might come through completely undamaged, but delayed delivery, mounting crew costs, and supply chain strain can still turn a logistics decision into a serious financial and operational headache. Increasingly, losses come not from cargo being damaged but from carriers using their contractual rights to reroute, discharge cargo elsewhere, or delay a voyage altogether, passing the extra cost on down the chain.
There’s a human side too: prolonged disruption can leave crews stuck onboard for extended periods with no clear timetable for relief.
Where the Real Costs Hide
The analysis points to several cost categories that often get overlooked:
- Rerouting and forwarding expenses when carriers avoid a conflict zone and cargo has to be moved on at extra cost.
- Delay costs from port congestion, diversions, inspections and security measures.
- Detention and holding expenses when sanctions reviews or security concerns tie up a vessel or cargo.
- Extra freight costs from longer routes, such as rerouting around the Cape of Good Hope.
- Sanctions and compliance costs of keeping payments and cargo movements compliant as rules shift.
- Broader supply chain disruption, hitting inventory and business continuity.
When a Shipping Decision Becomes a Legal One
Operational choices can quickly turn into regulatory and legal exposures. In July, the Lloyd’s Market Association introduced a new model clause covering payments for transiting the Strait of Hormuz, making clear insurers won’t cover such payments, and that cover for the vessel involved may end if one is made, given the sanctions and terrorism-law implications. It’s a sharp example of how a single routing or payment decision can carry consequences well beyond the voyage itself.
Why This Matters for Your Business
Marine war risk used to be framed around state-on-state conflict. Today’s picture is more layered, with a wider range of factors blurring the traditional lines. For businesses trading internationally, that means resilience planning deserves real attention, not just insurance cover for physical loss, but a clear understanding of the operational, financial and regulatory knock-on effects that can follow a disrupted voyage.
If your business relies on international shipping or supply chains touching higher-risk regions, it’s worth reviewing whether your current marine cover actually reflects these broader exposures. Get in touch and we can talk about where the gaps might be.
For more information, contact us:
Phone: 08 6383 2000
Email: admin@lmlinsurancegroup.com
Source: Tim Wills, head of marine (Australia), Markel, via Insurance News, 14 September 2026.
This blog contains general information only and is not advice specific to you.