Changes to war risks areas: JWLA027

What are the changes?

On 26th April and 29th April 2021 the Joint War Committee implemented changes to the areas of perceived enhanced risk that are used as the foundation for trading exclusions in marine war risks insurance policies

The following listed areas have been added to the list.
 

Cabo Delgado

The waters within 50 nautical miles of Mozambique and Tanzania enclosed by the following boundaries:

To the north, from Mnazi Bay at 10°19.6'S, 40°18.9'E to high seas point at 9°50.7'S, 41°7.6'E.

To the south, from Baía do Lúrio at 13°30’S, 40°31.6’E to high seas point 13°30’S, 41°28.8’E.

The following listed areas have been amended within the list
 

Indian Ocean, Gulf of Aden and Southern Red Sea

The waters enclosed by the following boundaries:

a) On the north-west, by the Red Sea, south of Latitude 15° N
b) on the northeast, from the Yemen border at 16°38.5’N, 53°6.5’E to high seas point 14°55’N, 53°50’E
c) on the east, by a line from high seas point 14°55’N, 53°50’E to high seas point 10°48’N, 60°15’E, thence to high seas point 6°45’S, 48°45’E  
d) and on the southwest, by the Somalia border at 1°40’S, 41°34’E, to high seas point 6°45’S, 48°45’E 
excepting coastal waters of adjoining territories up to 12 nautical miles offshore unless otherwise provided.

Persian or Arabian Gulf

Persian or Arabian Gulf and adjacent waters including the Gulf of Oman and waters west of the line from Oman’s territorial limit off Cape al-Ḥadd at 22°42.5'N, 59°54.5'E northeast to the Iran-Pakistan border at 25°10.5'N, 61°37.5'E, excepting coastal waters of adjoining territories up to 12 nautical miles offshore unless otherwise provided.

Oman

Musandam Governorate

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 your 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 JWLA027 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 most likely 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 who 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.