London | September 26, 2024
Marsh and Tokio Marine Kiln (TMK) today announced the launch of an exclusive insurance facility for ports and terminals which provides cover against business interruption arising from trade disruption.
The offering, the first of its kind available in the market, has been developed jointly by Marsh’s Marine Cargo & Logistics specialists and Tokio Marine Kiln. Led by Ed Parker, Tokio Marine Kiln’s Head of Special Risks, it is available to Marsh clients globally. The standalone cover is global in scope and offers capacity up to $50m for business interruption losses associated with trade disruption, such as the impact of geopolitical events and weather related incidents.
Today’s announcement follows the launch of Marsh’s first of its kind $50 million port blockage insurance facility, which provides clients with cover for loss of revenue caused by third-party accidents such as a vessel sinking in a channel, a vessel impact resulting in a waterway closure, or a natural catastrophe.
Over the last two years, the ongoing crisis in the Red Sea, the conflict in Ukraine, and tensions in the Taiwan Straits have disrupted trade globally. Vessels are being diverted or opting to take new routes to avoid conflict zones and ensure safe passage. In the first few months of 2024, trade through the Suez Canal alone dropped by over 50%, affecting ports reliant on this vital artery. The collapse of the Francis Scott Key Bridge in Baltimore in March 2024 also brought significant disruption to global trade.
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, meaning that ports have been left increasingly exposed with few solutions available to mitigate their financial losses to events outside of their control. Through the offering, ports can now secure an additional cover should certain wider events beyond their control lead to ships being diverted away from or refusing to sail to their facilities. The facility also provides additional cover for ports impacted by blockages whether by sea or land, increasingly volatile weather events, or more severe hurricane and typhoon seasons which have increased the risk of trade disruption from blocked access to ports.
Louise Nevill, CEO, UK Marine, Marsh Specialty, said: “Business interruption events stemming from geopolitics, trade disruption and weather-related incidents are increasing in their frequency and severity around the world, which is resulting in debilitating consequences for businesses involved in international trade. 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.”
Ed Parker, Head of Special Risks at Tokio Marine Kiln, said: “Recent geopolitical turmoil has exposed a clear gap in the standard cover available to ports and other cargo facilities. The threat posed by conflict has rendered many established routes impassable. Trade has been disrupted globally and the financial impact on many operators has been immense. This is compounded by the ever-present threat from blockages, with recent events in the Suez Canal and the collapse of the Francis Scott Key Bridge in Baltimore emphasising the scale of the potential impacts of these events beyond the control of port operators front of mind. 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.”
