War risk cancellation for cargo insurance: What you need to know

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2026 March 24

Recent geopolitical developments have led insurers to reassess their exposure to war-related risks across several shipping routes and regions. As a result, many cargo insurers are issuing war risk cancellation notices under cargo insurance policies.

This following explains how war risk cancellation operates under cargo insurance, and what this means for your shipments.

How war risk cover works under cargo insurance

Most cargo insurance policies are structured as follows -

• Institute Cargo Clauses (A/B/C) provide cover for ordinary marine risks such as fire, collision, or heavy weather.
• War risks are insured separately under the Institute War Clauses (Cargo).

War risks are not automatically included and are subject to specific terms, including a right of cancellation.

War risk cancellation – what does this mean?

Under the Institute War Clauses (Cargo), insurers (and insureds) have the right to cancel war risk cover only, without cancelling the entire cargo policy. The notice period for this is as follows -

• War risk cover may be cancelled on seven days’ notice.
• Cancellation takes effect seven days from midnight on the day notice is issued.
• War cover continues in full during this notice period.

What happens to shipments already in transit?

War risk cancellation does not apply retrospectively.

War cover will continue to apply to shipments where insurance was already attached before the cancellation takes effect, and shipments declared and accepted by insurers before cancellation, provided they sail within the timeframe specified in the policy wording.

What happens to new shipments?

Once the cancellation becomes effective, no new war risk cover will attach to shipments commencing after that date. Loss or damage caused by war perils will not be insured unless war cover is reinstated or a specific war risk buy-back or voyage-specific cover is arranged.

What risks are affected?

Where war risk cover is cancelled, losses arising from war, hostile acts, seizure or detention, and weapons of war are excluded. Standard marine risks remain insured under the base cargo policy.

What to look out for

• Confirm whether your cargo policy includes war risk cover and whether a cancellation notice has been issued.
• Be mindful of shipment and declaration timing.
• Understand that delay, loss of market, and consequential loss are not covered.
• Engage early if continued trading through high-risk regions is required.

How we can help

We are actively monitoring developments in the marine insurance market and working closely with insurers to secure the most appropriate cover for our clients.

Please contact your ICIB broker if you have cargo moving through affected regions or are planning future shipments.