Tokio Marine Kiln (TMK) and broker Marsh introduced an insurance facility offering up to $50 mn in coverage for ports and terminals facing business interruption due to trade disruption.
This standalone policy is available to Marsh clients globally, with coverage for losses resulting from geopolitical events or weather-related disruptions.
The facility, developed by TMK and Marsh’s marine cargo and logistics specialists, addresses gaps in standard coverage. Ed Parker, head of special risks at TMK, highlighted the increasing threats to global trade from geopolitical conflicts and blockages.
Events like the Suez Canal obstruction and the collapse of the Francis Scott Key Bridge in Baltimore demonstrate the scale of financial impacts on port operators.
Parker emphasized that these disruptions often extend beyond the control of port operators, further complicating the situation. Louise Nevill, CEO of U.K. Marine at Marsh Specialty, stated that the frequency and severity of business interruptions tied to geopolitics, trade disruption, and weather events are on the rise.
The new facility aims to provide port and terminal clients with a quick-acting layer of protection to help resume normal operations efficiently.
Over the last two years, global trade has faced significant disruption from conflicts in the Red Sea, Ukraine, and the Taiwan Strait. Ships have been forced to reroute to avoid conflict zones.
In early 2024, trade through the Suez Canal decreased by more than 50%, and the collapse of a key bridge in Baltimore added to the challenges.
Traditional insurance typically covers business interruption caused by physical damage to the ports or barriers to access. However, this new facility extends coverage to instances where ships are diverted or refuse to dock at affected ports, whether due to land or sea blockages, severe weather, or increasing hurricane and typhoon risks.
by Yana Keller
