Surging war risk premiums sparks allocation talks between owners and charterers
- While standard shipping agreements usually obligate charterers to pay additional war premiums, contractual ambiguities may open the door for allocation disputes
- As owners purchase the coverage upfront, they assume the ultimate financial risk and will have to absorb massive costs if a charterer goes bankrupt
- Charterers are primarily pushing back against unpredictable daily rates ignited by premiums that fluctuate based on individual underwriter assessments
The war in Iran has significantly driven up maritime war risk insurance, setting the stage for discussions over how to allocate the rising costs either contractually or effectively
