Kathmandu. Ever since Operation Sindoor in India, there has been an influx of inquiries about war risk insurance among insurance companies.
Sanjay Radhakrishnan, CEO, Adami Insurance Brokers, said enquiries have definitely increased but after taking some action, insurers are reluctant to provide war risk cover for land assets. “However, in case of cargo, bar risk cover is available as long as the goods are onboard,” he said.
According to Radhakrishnan, the current incident is considered close to war. “Therefore, the war risk has been kept out of the cover for the properties on the land legally,” he said.
War risk is generally not included in cargo policies. It should be provided with a separate cover. Insurance companies offer war risk cover through endorsement by charging additional premiums. Generally, insurance companies increase war risk premiums on cargo when geopolitical tensions rise.
According to Amarnath Saxena, chief technical officer of Bajaj Allianz General Insurance, war risk premiums usually depend on the insurance regime. “Insurance companies have their respective reinsurance,” he said, adding, “We have seen in the past that reinsurance treaties are stopped during wars and war covers can be withdrawn.” Such a situation can increase marine cargo insurance rates. ’
The Joint War Committee (JWC) in London constantly monitors global geopolitical developments. JwC updates the list of high-risk areas if an area is at high risk due to war, robbery or aggression. Updated risk status is notified to insurance companies. Insurance companies may issue notices cancelling or modifying existing war risk covers for transporting cargo through those areas. – Agency
