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Insurer urges forwarders to check the small print as ships shun Red Sea

[ December 4, 2023   //   ]

Marine cargo specialist Ascend Broking is urging forwarders to advise their insurer of any changes to routings of vessels in the Red Sea. Some vessels with Israeli connections already changing their routes following the recent attack on a bulk carrier and Houthi rebels have seized a car carrier and taken it hostage in Yemen, as well as firing on ships.

Ascend Broking head of cargo insurance Matt Price, says the shipping route declared to an insurer, at the time of taking out a policy, constitutes a material fact and any alteration could affect the insurance policy’s validity, in the event of a claim. Changes in route could also affects the goods carried, especially if perishable, which would again affect the insurance cover.

The narrow Bab al Mandab Strait past Yemen is the regular route to the Gulf of Aden and Asia and the alternative would be the trickier, longer and costlier Cape of Good Hope route. Insurance policy adjustments would be required, if a vessel opted to do this.

Changes to shipping plans also open up a greater risk of theft and interception by criminal gangs, who play on crews’ uncertainty around unfamiliar ports and can hack vessels’ computer systems to direct cargo into their own hands.

Those not changing their route through the Red Sea could find they encounter unanticipated delays – something not typically covered as standard by an insurance policy but which could be written into specific policy wording.

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