Insurers get queries: How much does war cover cost?

Time of India

08-05-2025

MUMBAI: Insurance companies are receiving enquiries for quotes on war risk insurance cover hours after India carried out Operation Sindoor "Enquiries have gone up, but underwriters are reluctant to provide war risk cover for landed property after some kinetic action has already taken place. In the case of cargo, though, war risk cover is available for the time the goods are in transit in the vessel ," said Sanjay Radhakrishnan, CEO, Edme Insurance Brokers. He added that in the case of property on land, war risk covers also have clauses that make the current events as proximate to war and hence will be excluded from cover.The standard cargo policy excludes war risks, which have to be separately covered. Insurers include the war risks through an endorsement by charging additional premium. Usually, when geopolitical tensions rise, insurers hike the war risk premium on cargo. War risk premiums are typically subject to reinsurance arrangements that insurers have with their respective reinsurers. We saw in the past, during times of war, that reinsurance treaties are put on hold and war covers may be withdrawn. Such a situation could possibly lead to higher rates of marine cargo insurance ," said Amarnath Saxena, chief technical officer, Bajaj Allianz General Insurance The London-based Joint War Committee (JWC) continuously monitors global geopolitical developments. If a region becomes high-risk (due to war, piracy or attacks), the JWC updates its list of high-risk areas . Insurers are notified of the updated risk status. For cargo transiting these regions, insurers may issue a notice of cancellation or revision of existing war risk cover, often with a 7 to 30-day notice period.