International trade can become challenging during wars, political tensions, strikes or geopolitical conflicts. For businesses involved in shipping goods across India or globally, these situations can disrupt the supply chain, delay deliveries and increase the risk of cargo loss and damage. This is where having the right marine insurance policy becomes important.
However, many businesses assume that every type of loss during transit is automatically covered under their marine insurance plan. In reality, war and strike-related risks are usually treated differently in marine policies. Understanding these exclusions can help you avoid unexpected claim rejections and plan your shipments more carefully.
What Happens During War or Geopolitical Conflict?
During war, strikes or geopolitical conflicts, transportation routes often become high-risk zones. Ports may shut down, cargo vessels may get delayed, and shipping costs may increase significantly. In worst cases, cargo may even get damaged due to military activity, riots or civil disturbances.
Indian businesses importing raw materials or exporting goods may face major problems during such scenarios. For example, if a shipment passes through a conflict region, there could be risks like seizure of cargo, attacks, route diversions or extended delays.
Even inland transportation can be affected due to strike protests or political unrest. Goods moving through highways, ports, or railway networks may also suffer physical damage or non-delivery because of such disturbances.
In India, standard Marine and transit insurance policies generally cover transit-related risks like accidental damage, collision, fire, theft, and natural disasters. However, losses directly related to war, strikes, or riots are excluded unless specifically added to the policy.
Why Does Marine Insurance Not Cover War-Related Losses?
War-related events are considered unpredictable and extraordinary risks. The scale of damage during military conflict or large geopolitical risk can be extremely large, which makes it difficult for insurance companies to calculate standard premiums.
This is the reason why most standard Marine insurance and cargo insurance policies specifically exclude losses caused by war, strikes and related scenarios.
However, some insurance may offer separate war, risk or strike risk coverage, with an additional premium, depending on the shipment route and risk level. Thus, businesses involved in international trade should carefully review policy documents and get in touch with their insurance company before transporting goods through politically sensitive regions.
What Remains Covered with Marine Transit Insurance?
Even during uncertain situations, a transit insurance policy continues to provide coverage for standard transit-related risk, unless the damage directly arises due to war or strike conditions. The typical coverage may include the following:
- Damaged due to unforeseen accidents or collisions
- Fire and explosion during transit
- Theft during transit
- Vessel overturning or derailment
- Damage during loading and unloading
- Natural disasters like earthquakes, floods and storms
Useful Tips for Businesses to Handle Such Situations?
Businesses can reduce financial and operational risk during geopolitical tensions by taking a few practical precautions:
- Review the marine insurance policy exclusion carefully before shipment
- Check whether war or strike-related add-ons are available
- Avoid shipping through conflict-prone areas whenever possible
- Stay updated on global trade advisory, and port conditions
- Use proper packaging and documentation for all consignments
- Inform the insurance company immediately if your shipment route changes
Conclusion
Wars and geopolitical conflicts can create serious disruptions for businesses involved in transportation and trade.
While standard Marine insurance policies provide financial protection against several transit-related risks, losses directly caused by war or strike conditions are usually excluded unless specifically covered. That is why businesses should understand policies clearly and choose suitable protection based on shipment routes and operational risk.
A reliable transit insurance plan from a trusted insurance company like TATA AIG can help minimise financial losses arising from accidents, theft, or common transit-related events. They even provide coverage for war and strikes on request, on payment of a nominal additional premium.
