Shipping insurers threaten to cancel policies after Iran strikes

Insurance companies are telling ship owners they may cancel policies and raise coverage prices as much as 50% for vessels traveling through the Gulf and Strait of Hormuz, the Financial Times reports.

Cargo war risk insurers – which cover commodities carried on tankers, such as grain and oil – said that they were preparing to cancel policies and renegotiate coverage at higher prices, rather than denying coverage for ships sailing into the region, the newspaper said.

Danish container shipping line Maersk, meanwhile, halted sailings through the Suez Canal and Bab el-Mandeb Strait, the chokepoint connecting the Red Sea to the Gulf of Aden and the Indian Ocean, citing escalating regional security risks.

The move is expected to lengthen shipping times and raise freight costs.