Your Cargo Insurance Does Not Cover War: Here Is What Does

Your container is on a vessel transiting the Gulf of Oman. A missile strike hits the ship. Your cargo, 200 tonnes of Malaysian palm oil worth USD 420,000, is a total loss.

You call your insurer. Your marine cargo insurance will not pay the claim.

This is true whether you hold the broadest coverage available under Institute Cargo Clauses (A) 2009, the named-perils coverage under ICC (B) 2009, or the most restrictive form under ICC (C) 2009. War is excluded from all three.

It is not a loophole. It is a deliberate structural feature of marine insurance that has existed for over a century. War perils and standard cargo perils are separated because they represent fundamentally different types of risk, underwritten by different markets with different pricing, different capacity, and different cancellation mechanisms.

ICC Clause 6: What the War Exclusion Actually Says

The exclusion sits in Clause 6 of each version of the Institute Cargo Clauses (2009 revision, published by the International Underwriting Association). It is not buried in supplementary conditions or endorsements. It is a core exclusion that applies to every standard marine cargo policy worldwide.

Under Clause 6 of ICC (A) 2009, the following perils are excluded:

ICC (B) 2009 and ICC (C) 2009 contain identical war exclusions under their respective Clause 6. There is no version of the standard Institute Cargo Clauses that covers war perils, regardless of how broad your coverage otherwise is.

The "all risks" label on ICC (A) misleads many cargo owners. It does not mean everything is covered. It means all risks of physical loss or damage are covered except those specifically excluded, and war is one of the most significant exclusions.

Clause 7: The Strikes Exclusion You Also Need to Address

Clause 7 of ICC (A) 2009 excludes a related but distinct set of perils: loss or damage caused by strikers, locked-out workmen, persons taking part in labour disturbances, riots, and civil commotions. Terrorism is captured here as well.

Clauses 6 and 7 are separate exclusions with separate solutions. War perils are covered by the Institute War Clauses (Cargo) CL385 dated 01.01.2009. Strikes, riots, and terrorism perils are covered by the Institute Strikes Clauses (Cargo) CL386 dated 01.01.2009.

Both are standalone clause sets, purchased separately from your standard cargo insurance. Both must be explicitly attached to your policy for the relevant perils to be covered. In a properly structured cargo insurance programme, both CL385 and CL386 are included as standard extensions.

But "properly structured" is doing a lot of work in that sentence. Programmes arranged through freight forwarders, or built to minimise premium, sometimes exclude one or both as a cost saving. The current crisis has exposed exactly how costly that saving can be.

How Institute War Clauses (Cargo) CL385 Work

CL385 provides a dedicated set of covers that mirror the exclusions in Clause 6 of your standard policy. Under Clause 1 of CL385, the insurer covers loss of or damage to the subject matter insured caused by war, civil war, revolution, rebellion, or insurrection; hostile acts by or against a belligerent power; capture, seizure, arrest, restraint, or detainment arising from war perils; and derelict mines, torpedoes, bombs, or other derelict weapons of war. All cover is subject to policy terms and conditions.

CL385 also covers general average and salvage charges incurred to avoid or in connection with a loss from a covered war peril. If a vessel declares general average because of a war-related incident, your war risk policy covers your GA contribution, subject to policy terms and conditions.

But CL385 does not work like your standard cargo insurance. There are three structural differences that matter enormously in the current environment.

Duration: waterborne only

Your standard ICC (A) policy provides warehouse-to-warehouse coverage under Clause 8, from the moment goods leave the origin warehouse until they arrive at the final destination warehouse. CL385 is materially narrower.

War cover under CL385 typically attaches only when cargo is loaded on board the overseas vessel and terminates when it is discharged at the final port of discharge, or 15 days after arrival at that port, whichever comes first. Your goods are not covered for war perils while sitting in a port warehouse, being trucked to the port, or moving by road or rail after discharge.

The protection is waterborne only. If you need war risk cover for the land legs of your transit, that requires separate arrangement with your insurer and is not standard.

Cancellation: 7 days' notice

Standard annual cargo policies run for the full policy year. War risk cover can be cancelled by the insurer with just 7 days' notice under Lloyd's and London market wordings. Under some US policy forms, the notice period can be as short as 48 hours.

This is the provision that caught cargo owners off guard in early 2026. When the Strait of Hormuz crisis escalated, insurers across the market exercised these cancellation provisions. Cargo owners who had war cover on Monday found themselves without it by the following week.

The 7-day provision exists because war risk is inherently volatile. Underwriters need the ability to withdraw from rapidly escalating situations. For a deeper look at how the Hormuz crisis unfolded and what it means for your coverage, see our Strait of Hormuz crisis 2026 guide.

Pricing: volatile and voyage-specific

Standard cargo insurance is priced annually and remains stable throughout the policy period. War risk pricing can change overnight.

When your cargo enters a Joint War Committee (JWC) listed area, an additional premium is charged for that specific transit. These additional premiums fluctuate with the geopolitical situation and can increase by multiples within days of an escalation.

The JWC, a body of Lloyd's and London market marine insurers, designates geographic areas of elevated war risk. The most recent expansion, JWLA-033 dated 3 March 2026, dramatically widened the listed areas to cover the entire Persian Gulf, Gulf of Oman, Red Sea, Gulf of Aden, and parts of the Indian Ocean. For more on how this affects your freight costs, see our guide on war risk surcharges.

The Difference Between War Risk Surcharges and War Risk Insurance

This is a point of confusion that costs cargo owners money. The war risk surcharge on your freight invoice and the war risk extension on your cargo insurance are two completely different things.

Paying a war risk surcharge does not mean your cargo is insured against war. It means the shipping line has passed on the cost of insuring their vessel for war perils in that zone. Your goods remain uninsured for war unless you have CL385 attached to your own cargo policy.

War Risk for Cargo Owners vs Vessel Owners

The war exclusion and the solution to it work differently depending on whether you own the cargo or the vessel. As a cargo owner, understanding where your cover starts and the shipowner's cover ends matters.

If a vessel is struck by a missile and your cargo is destroyed, the shipowner's hull war risk pays for the ship. Your cargo war risk pays for the goods. If you do not have CL385 attached to your cargo policy, nobody pays for your goods.

The vessel owner's insurance does not extend to your cargo.

For more on how hull and P&I insurance works from the vessel owner's perspective, see our Hull and Machinery page.

The Malaysian and Singapore Context

Malaysian and Singaporean exporters are disproportionately exposed to the current war risk environment. The Strait of Hormuz is a critical chokepoint for Malaysian palm oil heading to Middle Eastern and European buyers, for electronics components shipped from Penang and Johor to markets beyond Suez, and for petroleum products moving from Terengganu and Pahang refineries.

Singapore, as the world's second-busiest container port and a major transshipment hub, sees cargo from across Southeast Asia consolidated and forwarded through war-affected corridors. A container originating in Port Klang, transshipped in Singapore, and bound for Rotterdam via the Suez Canal now transits or comes near JWC listed waters.

Many Malaysian exporters selling on FOB terms assume war risk is the buyer's problem. Technically, under Incoterms 2020, risk does transfer to the buyer at the FOB point.

But if the buyer has not arranged war cover and your goods are destroyed, you face a commercial dispute with a customer who cannot pay, or you lose a relationship worth far more than one shipment. For a full breakdown of how this crisis affects specific Malaysian trade corridors, see our Hormuz crisis guide for Malaysian exporters.

What to Check on Your Policy Right Now

If you ship goods through or near any current JWC listed area, or if your supply chain could be disrupted by the conflicts in the Persian Gulf, Red Sea, or Black Sea, check these things immediately.

Check whether CL385 and CL386 are attached to your policy. Look at your cargo insurance certificate or policy schedule. Does it explicitly reference Institute War Clauses (Cargo) CL385 dated 01.01.2009 and Institute Strikes Clauses (Cargo) CL386 dated 01.01.2009?

If these are not listed, war and strikes perils are excluded. Ask your broker or insurer for written confirmation of what is and is not covered.

Confirm your cancellation status. If you do have war cover, check whether your insurer has issued a cancellation notice for the Gulf, Red Sea, or any other listed area. Having had war cover last month does not mean you have it today.

Review your trade routes. Even if your cargo does not transit the Strait of Hormuz directly, the ripple effects are broad. Rerouting around the Cape of Good Hope changes the risk profile, extends voyage duration, and may route your cargo through other listed areas.

Check your Incoterms. If you sell CIF, you are contractually required to provide the buyer with insurance. Under Incoterms 2020, CIF requires minimum ICC (C) cover, which excludes war under Clause 6.

Your CIF obligation does not require you to provide war cover. But your buyer may expect it, and your Letter of Credit may require it.

Secure war cover before you need it. War risk capacity is shrinking, as of April 2026. Insurers who wrote war cover routinely six months ago are now either declining the risk entirely or pricing it at multiples of pre-crisis rates.

Securing cover now is better than trying to find it after your cargo is already on the water heading toward a conflict zone.

What Happens Without War Cover: The Financial Impact

Without CL385, you bear the full loss. Your standard cargo insurer will decline the claim under Clause 6. The carrier's liability, capped at SDR 666.67 per package or 2 SDR per kg gross weight under the Hague-Visby Rules (approximately USD 887 per package or USD 2.66 per kg), will cover a fraction of your goods' value.

You cannot recover from the carrier beyond these limits without proving the carrier was at fault. In a war loss scenario, the carrier is typically not at fault; they are a victim of the same event.

If the vessel declares general average following a war-related incident, you will be required to contribute your proportional share of the GA sacrifice or expenditure. Under the York-Antwerp Rules (2016 revision), all cargo interests contribute proportionally to a voluntary sacrifice made for the common safety.

Without war cover, you pay the GA contribution out of pocket. With CL385 in place, your war risk insurer covers that contribution, subject to policy terms and conditions.

For high-value Malaysian exports like electronics from Penang (where a single container of semiconductors can exceed USD 2 million) or palm oil shipments (where bulk parcels routinely exceed USD 500,000), a war loss without cover is a material financial event.

Frequently Asked Questions

Does ICC (A) "all risks" cover war damage to my cargo?

No. Despite the "all risks" label, ICC (A) 2009 specifically excludes war, civil war, hostile acts, capture, seizure, and weapons of war under Clause 6. You need a separate Institute War Clauses (Cargo) CL385 extension to cover these perils, subject to policy terms and conditions.

Can my insurer cancel my war cover without warning?

Not without any warning, but with very short notice. Under Lloyd's and London market wordings, cargo war risk cover can be cancelled with 7 days' notice. Hull war risk can be terminated with just 48 hours' notice under automatic termination clauses.

Does war cover protect my cargo while it is in a warehouse or on a truck?

Standard CL385 cover is waterborne only. It attaches when cargo is loaded on the overseas vessel and terminates on discharge or 15 days after vessel arrival at the final port of discharge, whichever comes first. War risk cover for land transit legs requires separate arrangement with your insurer.

What is the difference between war cover and strikes cover?

War cover (CL385) covers armed conflict, hostile acts, and weapons of war. Strikes cover (CL386) covers losses from strikers, labour disturbances, riots, civil commotions, and terrorism. Both are excluded from standard ICC policies under separate clauses (Clause 6 for war, Clause 7 for strikes) and both should be included in a properly structured cargo insurance programme.

Is the war risk surcharge on my freight invoice the same as war risk insurance?

No. The war risk surcharge covers the shipping line's cost of insuring their vessel in a high-risk zone, not your cargo. You need your own CL385 extension on your cargo policy.

What are JWC listed areas and why do they matter?

The Joint War Committee designates geographic areas of elevated war risk. When your cargo transits a listed area, your war risk insurer charges an additional premium for that voyage. As of April 2026, JWLA-033 covers the Persian Gulf, Gulf of Oman, Red Sea, Gulf of Aden, parts of the Indian Ocean, the Black Sea, and several other regions.

I sell FOB from Malaysia. Is war risk my buyer's problem?

Under Incoterms 2020, risk transfers to the buyer once goods are on board at the FOB port. But if your buyer has not arranged war cover and suffers a total loss, you face potential non-payment and a damaged business relationship. Many Malaysian exporters choose to advise buyers on war cover requirements as part of the sale.

Can I still get war cover for cargo transiting the Persian Gulf in 2026?

Capacity exists but it is limited and expensive, as of April 2026. Some specialist underwriters continue to quote cargo war risk for the Gulf region at substantially higher premiums than pre-crisis levels. Voyage works with war risk capacity in the Lloyd's and London market for shipments through affected corridors.

Voyage Conclusion

The war exclusion in your cargo insurance is not new. Clause 6 of every version of the Institute Cargo Clauses has always excluded war perils. What is new is the scale at which these exclusions are affecting real shipments through the world's most critical trade corridors, from the Strait of Hormuz to the Red Sea to the Black Sea.

Voyage arranges marine cargo insurance with war risk (CL385) and strikes (CL386) extensions for shipments across Southeast Asia and worldwide, including trade corridors where many insurers have reduced or withdrawn capacity. If you are not sure whether your current policy includes war cover, or if you need to secure coverage for shipments transiting affected zones, talk to us about open cover that includes war and strikes as standard.

Disclaimer: This article provides general guidance on the war exclusion in marine cargo insurance and Institute War Clauses (Cargo) as of April 2026. The war risk market is subject to rapid change, including short-notice cancellation and repricing. Coverage terms, conditions, and availability vary by insurer, policy, and jurisdiction. Always review your specific policy wording and consult a qualified insurance or legal professional before making coverage decisions.