When your client lodges a property claim this year, the thing most likely to blow out the settlement timeline isn’t the insurer, it’s a shipping bottleneck on the other side of the world. Around 20% of the world’s oil and a significant share of global LNG passes through the Strait of Hormuz every day. When that waterway becomes a conflict zone, the ripple effects don’t stay in the Middle East. They show up in rebuild timelines, parts availability, and freight costs across the risks you’re placing right now.
This isn’t a geopolitical think piece. It’s a practical breakdown of what escalating Gulf conflict means for the programs on your desk.
The Direct Lines Into Your Clients’ Programs
When war-risk cover gets withdrawn or repriced across Gulf shipping routes, two things happen fast: shipping costs spike and delays blow out. Both feed directly into claims costs and coverage adequacy across multiple lines.
For motor and fleet, higher fuel prices push up repair costs and parts prices. For commercial property, construction and equipment costs climb as imported components get more expensive and slower to arrive. For business interruption, the rebuild and replacement timeline extends right at the moment when standard 12-month BI indemnity periods are already being tested.
Australia has limited domestic fuel reserves and heavy reliance on imported refined products, which means the cost impact flows through the economy faster and more broadly than most clients expect. The businesses most exposed are those who rely on a small number of critical imported inputs such as, chemicals, plastics, industrial components, fuel-dependent logistics where a disruption to one Gulf-exposed supply line can halt operations entirely.
The Conversation Most Brokers Haven’t Had Yet
The question to ask clients isn’t “are you worried about the Middle East?”
It’s: “Where does your critical stuff actually come from and which of those supply chains touch Gulf shipping routes?”
Most clients haven’t mapped this. Many brokers haven’t asked. But the exposure is real and the macro analysis from major Australian banks confirms the risk channels are direct. The coverage implications are specific:
- BI sums insured and indemnity periods need to reflect actual supply chain lead times, not a figure set three years ago
- Contingent BI and supplier extension clauses are worth examining for clients with concentrated supply dependencies
- Marine and transit policy wordings need to be checked for war, strikes, riots, and civil commotion exclusions, and whether additional premiums or notice requirements apply for Gulf-exposed routes
The businesses that end up underinsured in a Gulf disruption scenario won’t be surprised by the conflict. They’ll be surprised that their insurance program was never built to account for it.
The brokers who catch these things before a claim does are the ones clients keep for decades. At Better Broker Network, helping members have exactly these conversations informed, proactive, and backed by serious technical expertise is what we’re here for. Find out more about the network.