Can 1906 Insurance Laws Cover Modern Maritime Conflicts?

The marine insurance industry faces a critical structural gap: the foundational documents protecting ocean cargo—including Institute War Clauses from 2009, Hull clauses from 1983, and the Marine Insurance Act itself from 1906—were written for geopolitical realities that no longer exist. As vessels become stranded in the Persian Gulf and navigation through critical straits becomes increasingly hazardous, supply chain professionals are discovering that their coverage may not adequately address modern conflict scenarios. This disconnect matters because marine insurance underpins the financial viability of global ocean freight.

When policy language fails to clearly cover new risk categories—whether from drone strikes, regional tensions, or sanctions regimes—shippers face either uninsured exposure or costly disputes during claims. The gap between outdated insurance clauses and current geopolitical risk creates operational uncertainty that extends beyond individual shipments to entire trade lanes. For supply chain teams, this signals the need for proactive risk management: reviewing open cover policies, understanding exclusions explicitly, and potentially layering additional coverage for high-risk routes.

The insurance market may be slow to adapt, but the operational risks are immediate. Supply chain professionals should treat this as a wakeup call to stress-test their routing assumptions and contingency plans, particularly for routes passing through geopolitically sensitive chokepoints.