Marine Hull War, Strikes and Related Perils Insurance

What Is Marine Hull War, Strikes and Related Perils Insurance?

Hull war, strikes and related perils insurance is a separate cover structure for physical loss of or damage to a vessel caused by war, strikes and civil commotion, terrorism, malicious acts and seizure. In the market it is known as hull war, strikes, terrorism and related perils, or simply hull war.

This cover is not an automatic part of an H&M policy. H&M wording excludes these perils; the excluded perils are dealt with under separate wording and a separate premium, usually with their own cancellation and termination provisions. The structure is also separate from the war and strikes clauses used for cargo; for the cargo side see Marine Cargo War and Strikes Insurance.

This page is for general information only; it does not mean the scope, price, acceptance or payment of any particular policy is guaranteed.

War, Strikes, Terrorism, Malicious Acts, Seizure and Piracy Are Not One Cover

These concepts are often used interchangeably in everyday language but are treated separately for cover purposes. In the sample Institute War and Strikes Clauses Hulls-Time text examined (1/10/83), the insured perils are listed under the following headings:

• War: War, civil war, revolution, rebellion, insurrection or civil strife arising from them, and hostile acts by or against a belligerent power.
• Capture, seizure, arrest, restraint, detainment: The sample wording lists these terms, and their consequences, as a separate peril.
• Derelict mines, torpedoes and weapons: Derelict mines, torpedoes, bombs and similar weapons of war.
• Strikes and civil commotion: Loss or damage caused by strikers, locked-out workmen or persons taking part in labour disturbances, riots or civil commotions.
• Terrorism and malicious acts: The sample wording lists any terrorist or any person acting maliciously or from a political motive as a separate peril.
• Confiscation and expropriation: Listed as a separate peril in the sample wording; the same text, however, excludes certain kinds of seizure (see below).

H&M Cover Distinguished from Hull War and Strikes Cover

For the detailed H&M scope see the Marine Hull & Machinery Insurance page.

Cancellation and Automatic Termination Provisions

The hull war and strikes wording examined (1/10/83) contains two distinct mechanisms:

• Cancellation by notice: Either the underwriters or the assured may cancel on 7 days notice; the text also provides for reinstatement if new premium and/or conditions are agreed before the notice expires.
• Automatic termination: Whether or not notice of cancellation has been given, the sample wording terminates cover automatically on a hostile detonation of a nuclear weapon of war, on the outbreak of war between certain major powers, or if the vessel is requisitioned for title or use.
• Return of premium: On cancellation or automatic termination the sample wording provides a pro rata net return of premium.

Listed Areas and the Additional Premium Approach

In the London market the Joint War Committee (JWC) publishes specified areas as listed areas for hull war, piracy, terrorism and related perils. The list is updated from time to time; the published circular states that the application of the list to individual contracts is a matter for specific negotiation.

• Being outside a listed area does not mean there is no risk; being inside one does not mean cover will be refused.
• Entering, transiting or calling at a listed area may require prior notice to insurers, additional premium or additional conditions.
• Additional premium, periods and conditions are set according to the voyage, the vessel and market conditions; no rates or periods are given on this page.
• The current list should be checked with the Lloyd's Market Association (LMA) and International Underwriting Association (IUA) sources; this page does not contain a fixed list of areas.

Sanctions and geographic restrictions are also assessed separately at the cover and placement stage.

Seizure, Detainment and Expropriation

In the sample wording the capture, retention or expropriation of a vessel is dealt with by separate provisions:

• If the assured loses the free use and disposal of the vessel for a continuous period of 12 months, then for the purpose of deciding whether the vessel is a constructive total loss the assured is deemed to have been deprived of the vessel without any likelihood of recovery.
• Capture, seizure, arrest, restraint, detainment, confiscation or expropriation by or under the order of the government or any public or local authority of the country in which the vessel is owned or registered is excluded in the sample wording.
• Arrest or detainment under quarantine regulations or for infringement of customs or trading regulations, the operation of ordinary judicial process, failure to provide security and financial causes are excluded in the sample wording.
• Requisition and pre-emption are excluded in the sample wording.

Whether a seizure event is covered therefore depends on who carried it out, on what legal basis, under which peril category, and on the policy wording.

Principal Exclusions in the Sample Wording

• Detonation of a nuclear weapon of war.
• Outbreak of war between certain major powers (the list of powers varies by version of the wording).
• Requisition or pre-emption.
• Seizure and expropriation by the authorities of the flag or owner's country.
• Detainment or seizure under quarantine, customs and trading regulations, ordinary judicial process and financial causes.
• Piracy (excluded in the sample wording; appears as an insured peril in H&M wording).
• Sums recoverable under the H&M wording or any other insurance for the same loss.
• Expenses arising from delay, except those recoverable under specified principles.

Relationship with Loss of Hire, P&I, Cargo and Other Structures

• Loss of Hire: Loss of hire when a vessel cannot be used is a separate subject; how a war or strikes event is treated under that structure depends on the policy. See the Loss of Hire page.
• P&I: Liabilities arising from the operation of the vessel are separate from H&M and hull war cover; the P&I wording and the rules of the relevant club or insurer should be reviewed separately as regards war risks. See the P&I page.
• Cargo: Cargo on board is not the subject of this policy; separate clauses such as the Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo) are used. See Marine Cargo War and Strikes Insurance.
• H&M: War and strikes cover works outside H&M with a separate premium and a separate cancellation mechanism; the terms of the two policies are not required to align.

Insurable Interest and the Parties

• Shipowner: The economic interest in the vessel is the basic foundation for cover.
• Operator and charterer: In bareboat charter and similar structures the interest and the insurance obligation vary by contract.
• Financiers: Ship finance agreements may impose insurance and additional assured requirements; these are assessed under the policy wording and the contract.

The interest, the sum insured and the cover structure are defined in the policy.

Placement in Türkiye and the Legal Framework

Under Article 15 of Insurance Law No. 5684, persons resident in Türkiye must place their insurable interests in Türkiye with insurance companies operating in Türkiye. The same article lists insurances that may be placed abroad. For ships these include two separate hull insurance exceptions and liability insurance arising from the operation of ships. For ships bought with foreign credit, hull insurance may be placed abroad only up to the amount of the foreign credit and until the foreign debt is repaid; for ships brought in from abroad under financial leasing, it may be placed abroad only for the term of the financial leasing contract.

In addition, by a Council of Ministers decision, insurance of ships and yachts registered in the Turkish International Ship Registry has also been brought within this scope.

The hull-side exceptions have a different legal structure from the exception for transported goods. Whether hull war and strikes cover for a given vessel can be placed in Türkiye or abroad depends on the vessel's registry, the financing structure, the current state of the law and its secondary regulations, and the nature of the policy; secondary regulations and the current Treasury and insurance legislation should be checked.

Information Needed for a Quotation and Underwriting

• Vessel name, IMO number, flag, class, type, age and tonnage
• Sum insured and existing H&M structure
• Trading area, route and port calls
• Transits of listed or high-risk areas and anchorage and waiting plans
• Master and crew nationality and security practices
• Ownership, operator and financing structure; information for sanctions screening
• Claims and incident history
• Requested scope of cover, limits and deductibles

This list is illustrative; the information and documents requested vary by insurer and policy structure and should not be read as a single mandatory standard form for every insurer. Acceptance, requests for further information and terms rest with the relevant insurer.

Frequently Asked Questions

Neolife's Role

Neolife Group can assess the vessel and voyage information, help determine a cover structure suited to the need, explore suitable insurance and reinsurance solutions, carry out placement work and compare the quotations received. This does not imply the hull war capacity of any particular insurer or reinsurer, acceptance of cover, price or payment; those depend on the relevant insurer and the policy terms.

Request a Hull War Quotation →