There are coverage gaps sitting inside your clients’ cargo policies right now that most of them don’t know about – and a hot conflict in the Gulf is exactly the event that exposes them. Maritime insurers have been cancelling war-risk cover for vessels transiting the Gulf, and war-risk premiums have surged sharply as the Iran conflict has widened. Tankers have been hit or rerouted. Shipping has slowed. The commercial impact is showing up in freight costs, delivery schedules, and contract performance across supply chains that touch the Middle East.
What This Actually Means for Open Cargo Policies
Most commercial clients with ongoing import or export activity operate under open cargo policies – broad wordings that cover goods in transit across a range of conditions. The question is what those wordings actually say about war and associated risks.
War, strikes, riots, and civil commotion (SRCC) exclusions are standard in many cargo policies, with cover available as an add on. The issue right now is threefold: whether war-risk cover is actually in place for Gulf-exposed routes, whether additional premiums or notice requirements apply when transiting conflict-affected areas, and whether the limits and terms still reflect current risk levels given what’s happened to war-risk rates globally.
Clients often assume their cargo policy covers what it sounds like it covers. The gap between that assumption and what the wording actually says is where losses happen.
The Knock- On Exposures That Aren’t Automatically Covered
Beyond the direct physical loss question, there are coverage gaps that don’t get enough attention:
- Delay and demurrage costs arising from vessels being rerouted or detained are not automatically covered under standard cargo wordings
- Contract performance failures caused by delayed or lost shipments may have trade credit or political risk implications that sit outside the marine policy entirely
- For clients with BI coverage, the supply chain delay implications of a significant marine disruption may not be captured if the BI wording doesn’t include contingent or supplier extensions
Where the Broker Value Sits
The clients most exposed are those who import critical inputs and components, chemicals, fuel-dependent raw materials through Gulf-exposed routes. Many of them haven’t mapped that exposure, and the flow-on effects across insurance and commodity markets are broader than most businesses realise.
The coverage audit is specific: check the open cargo wording for war and SRCC terms, confirm whether additional cover is in place for Gulf routes, review BI wordings for contingent and supplier extensions, and consider whether the interplay between marine, trade credit, and political risk coverage has any gaps.
Global risk isn’t abstract for Australian businesses. It shows up as longer lead times, higher landed costs, and potentially uninsured gaps in programs that were designed for a more predictable world.
The brokers who find these gaps before a claim does are the ones who earn genuine long-term loyalty. At Better Broker Network, our members have access to the underwriting expertise and technical support to have these conversations with confidence. See what that support looks like.