DP World on Thursday launched a cargo war-risk insurance product offering end-to-end coverage for goods moving across Middle East trade routes, as the conflict around the Strait of Hormuz continues to drive shipping costs to unprecedented levels.
A First-of-Its-Kind Solution
The Dubai-based logistics company described the offering as a first-of-its-kind solution that provides continuous coverage across ocean and air freight, port storage, and inland transportation. Traditional war-risk insurance policies typically cover only one segment of a shipment’s journey, leaving gaps that have become increasingly costly as the conflict between the United States and Iran has disrupted Gulf shipping.
The programme offers coverage limits of up to $400 million per shipment and up to $1 million per inland movement, with automatic port storage cover for up to 14 days. All valid claims under the policy would be settled with zero deductible. Businesses can opt for complete end-to-end protection or standalone ocean, air, or land transit policies.
Soaring Premiums Drive Demand
The product arrives amid a dramatic escalation in shipping insurance costs. War-risk premiums for vessels transiting the Strait of Hormuz have surged from around 0.1–0.15% of hull value before the conflict to as high as 2–3% in the worst cases, according to a March report by Howden Re. According to Euronews, for a tanker valued at $120 million, a normal premium of approximately $40,000 would now cost between $600,000 and $1.2 million for a single trip.
The Lloyd’s Market Association’s Joint War Committee has expanded its “high-risk” designation to cover the entire Persian Gulf. Major carriers including Maersk, MSC, and CMA CGM have suspended voyages through the Gulf, while close to 40 Long Range tankers remain stranded in the Persian Gulf, according to S&P Global. Traffic through the Strait of Hormuz has reportedly fallen by about 95% since the onset of hostilities.
Building Structural Resilience
The insurance product reflects a broader industry shift toward embedding risk management directly into logistics operations. Even if the strait reopens, experts predict war-risk premiums could remain elevated at levels up to 20 times higher than pre-conflict rates, according to Al Jazeera. Hapag-Lloyd has introduced a War Risk Surcharge of $1,500 per standard container and $3,500 per reefer or special container for Gulf transits.
DP World’s programme is available to all companies trading in or through the Middle East, covering key corridors including the Arabian Gulf, the Red Sea, and connected inland routes.
