Class 1 (Chief Engineer)Engineering Management📅 Mar 2026
Exam Question
Q3
With respect to the geo-political situations war situations ongoing in the Persian Gulf:
(a) Explain War Risk cover in Marine Insurance, and also describe the key aspects which are included in this war risk cover.
(b) Describe some of the measures which the Insurers and P&I clubs take to protect themselves from high claims during war situations.
Reference Answer
### (a) War Risk Cover in Marine Insurance #### Concept War Risk insurance is a specialized type of marine insurance designed to cover perils that are explicitly excluded from standard Hull & Machinery (H&M) and Protection & Indemnity (P&I) policies. Standard policies invariably contain a **Free of Capture & Seizure (FC&S) Clause**, which nullifies cover for losses or damages arising from war-related events. War Risk insurance is therefore purchased as a separate policy to "buy back" this cover, protecting the shipowner's assets and liabilities against the specific and high-risk perils associated with geopolitical conflicts. This cover is crucial for vessels trading in or near areas of political instability, as the financial consequences of a war-related incident can be catastrophic.
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