War risks insurance is a specific component of marine coverage designed to protect against exceptional events such as military actions, terrorism, or sabotage targeting vessels.
However, in periods of sudden geopolitical escalation, insurers may rapidly reassess their exposure and in some cases, suspend coverage altogether.
A market under pressure
Maintaining war risk coverage in high-risk regions has become increasingly costly.
In certain areas such as the Persian Gulf, additional premiums have surged dramatically, in some cases multiplying by up to ten times.
This reflects both the heightened level of risk and the reduced capacity available in the market.
Rapid withdrawal mechanisms
In sensitive zones, insurers can issue what is known as a Notice of Cancellation (NOC), allowing them to suspend or terminate coverage on very short notice typically within 48 hours under French conditions or 72 hours under English conditions.
Importantly, these cancellations are not always limited to a single hotspot. Broader regions such as the Gulf, the Strait of Hormuz, or the Arabian Sea may be impacted simultaneously.
When capacity is withdrawn, options to reinstate coverage (buy-back solutions) can become either unavailable or significantly more expensive.
Zoning and pricing volatility
Risk assessment is largely driven by zoning classifications, such as those defined by CESAM. High-risk zones, particularly levels 7 and 8, are often handled on a case-by-case basis, with pricing subject to immediate change.
In this environment, the absence of a quoted rate or available capacity effectively means no coverage for a given voyage or area.
A key legal consideration
War risk policies typically include a “presumption of knowledge” clause. This means coverage may not apply if information about a war-related event has already reached:
- the place of subscription,
- the place where documents are issued, or
- the location of the insured,
even if the insured party is not personally aware of the event.
Current impact on OnlyYacht operations
Several insurers have already withdrawn war risk coverage in specific zones through Notices of Cancellation. The OnlyYacht team has proactively contacted affected clients and prospects to ensure full transparency and guidance.
At present, there has been no significant departure of yachts from Dubai, and port operations remain fully functional.
In parallel, the Dubai International Boat Show, initially scheduled for April, has been postponed to November 25–29.
These new dates align with the start of the local yachting season and are expected to become the standard timing for future editions.
Our commitment
In a rapidly shifting risk landscape, OnlyYacht remains fully mobilized to support its clients with up-to-date insights, tailored insurance strategies, and continuous monitoring of market conditions.
