Tokio Marine Kiln (TMK) and Marsh have introduced an exclusive insurance facility designed specifically for ports and terminals, offering protection against business interruption due to trade disruptions.
Said to be the first of its kind in the market, the offering was developed by TMK and Marsh’s marine cargo & logistics team. Ed Parker (pictured), head of special risks at TMK, leads the initiative, which provides coverage of up to US$50 million. The facility is now available to Marsh’s global clientele.
The proposition builds on the broker’s earlier US$50 million port blockage insurance, which protects against lost revenues from accidents such as vessel blockages or natural disasters. For instance, it covers incidents like a ship sinking and obstructing a channel.
TMK and Marsh highlighted that recent disruptions – including the ongoing crisis in the Red Sea, the Ukraine war, and tensions in the Taiwan Strait – have caused global trade issues. Shipping routes have been rerouted to avoid conflict zones, while trade volumes through key channels like the Suez Canal have sharply declined. The recent collapse of the Francis Scott Key Bridge in Baltimore also disrupted trade.
With traditional insurance policies for ports and terminals primarily focussed on physical damage and access limitations, the new facility seeks to fill the gap by offering coverage for disruptions that cause ships to be diverted away from ports or refuse to dock due to external factors.
The insurance also includes protection against blockages from land or sea, increasingly severe weather events, and escalating risks from hurricanes and typhoons.
“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,” noted Louise Nevill, chief executive of UK marine at Marsh Specialty.
“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.”
Parker added: “Recent geopolitical turmoil has exposed a clear gap in the standard cover available to ports and other cargo facilities…
“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.”
What do you think about this story? Share your thoughts in the comments below.
