Tokio Marine Kiln (TMK) and Marsh have developed an insurance facility for ports, providing up to $50 million in coverage for trade disruption.
This announcement follows the launch of Marsh’s $50 million port blockage insurance facility, which covers clients for revenue losses caused by third-party accidents such as a vessel sinking in a channel, a vessel impact resulting in a waterway closure, or a natural disaster.
Recently, vessels have been redirected or chosen alternative routes to avoid conflict zones and ensure safe passage.
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Trade across the Suez Canal fell by more than 50 per cent in the first few months of 2024, impacting ports that rely on this crucial artery.
TMK and Marsh argue that traditional insurance solutions for port, terminal, and other cargo-handling insureds only cover business interruption caused by physical damage to the ports themselves or where there is a physical barrier to access, leaving ports increasingly vulnerable and with few options for mitigating financial losses from events beyond their control.
Through the new service, ports may acquire extra coverage in the event that larger events beyond their control cause ships to be diverted away from or refuse to sail to their facilities.
The insurance facility also provides extra coverage for ports that have been hit by sea or land obstructions, highly unpredictable weather events, or more severe hurricane and typhoon seasons, all of which have raised the danger of trade interruption due to limited port access.
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Ed Parker, Head of Special Risks at Tokio Marine Kiln, said: “We are delighted to work with Marsh to bring this product to market. Developing innovative solutions which reflect changing risks and which respond to client demand is core to the Tokio Marine Kiln approach and we look forward to working with Marsh and port businesses around the world to provide a much needed solution to the threat posed by trade disruption.”
Louise Nevill, CEO, UK Marine, Marsh Specialty, stated: “This new facility offers our port and terminal clients a rapidly available layer of cover to protect their operations and facilitate an expeditious resumption of normal operations when these events occur.”
