This innovative offering, the first of its kind in the market, was developed jointly by Marsh’s Marine Cargo & Logistics specialists and Tokio Marine Kiln. Led by Ed Parker, Tokio Marine Kiln’s Head of Special Risks, the facility is available to Marsh clients globally. The standalone cover offers capacity up to $50 million for business interruption losses associated with trade disruption, such as geopolitical events and weather-related incidents.
Today’s announcement follows the launch of Marsh’s $50 million port blockage insurance facility, which provides clients with coverage for loss of revenue caused by third-party accidents.
In recent years, the global trade landscape has been significantly disrupted by events such as the crisis in the Red Sea, the conflict in Ukraine, and tensions in the Taiwan Straits. Vessels have been diverted or opted for alternative routes to avoid conflict zones, leading to disruptions in trade flows. The Suez Canal experienced a decline of over 50% in trade during the first few months of 2024, impacting ports reliant on this vital artery. Additionally, the collapse of the Francis Scott Key Bridge in Baltimore in March 2024 further disrupted global trade.
Traditional insurance solutions for ports, terminals, and other cargo-handling insureds have often been limited to covering business interruption caused by physical damage to the ports themselves or physical barriers to access. This has left ports increasingly exposed to financial losses from events beyond their control. The new facility offered by Tokio Marine Kiln and Marsh provides additional coverage for ports impacted by blockages, whether by sea or land, as well as increasingly volatile weather events and severe hurricane and typhoon seasons, which have heightened the risk of trade disruption.
Louise Nevill, CEO, UK Marine, Marsh Specialty, said: “Business interruption events stemming from geopolitics, trade disruption and weather-related incidents are increasing in their frequency and severity around the world, which is resulting in debilitating consequences for businesses involved in international trade. This new facility offers our port and terminal clients a rapidly available layer of cover to protect their operations and facilitate an expeditious resumption of normal operations when these events occur.”
Ed Parker, Head of Special Risks at Tokio Marine Kiln, said: “Recent geopolitical turmoil has exposed a clear gap in the standard cover available to ports and other cargo facilities. The threat posed by conflict has rendered many established routes impassable. Trade has been disrupted globally and the financial impact on many operators has been immense. This is compounded by the ever-present threat from blockages, with recent events in the Suez Canal and the collapse of the Francis Scott Key Bridge in Baltimore emphasising the scale of the potential impacts of these events beyond the control of port operators front of mind.”
He added: “ We are delighted to work with Marsh to bring this product to market. Developing innovative solutions which reflect changing risks and which respond to client demand is core to the Tokio Marine Kiln approach and we look forward to working with Marsh and port businesses around the world to provide a much needed solution to the threat posed by trade disruption.”
Source: Tokio Marine Kiln
