# War Risk Insurance for Importers and Exporters
Who This Page Is For
Importers and exporters whose supply chains pass through politically unstable regions, active conflict zones, or JWC Listed Areas face a layered insurance problem that a single standard cargo policy does not solve. This page addresses the risk picture for trading companies, commodity merchants, manufacturers reliant on imported inputs, and agricultural exporters whose product moves through the world's contested shipping lanes. The coverage architecture for this audience spans three intersecting categories: cargo war risk, trade credit, and contingent business interruption — each responding to a different failure mode in the international trade chain.
The Risk Landscape Importers and Exporters Face in 2026
The cargo that moved through Bab-el-Mandeb before the Houthi campaign began is now rerouting around the Cape of Good Hope. That rerouting adds cost, time, and spoilage exposure — particularly for perishable agricultural goods and temperature-sensitive manufacturing inputs. For buyers and sellers operating on CIF or CFR terms, the insurance implications of a 6,000-nautical-mile detour are not merely logistical.
The Institute War Clauses (Cargo) and the London market's standard cargo war risk endorsements remain the dominant instrument for insuring cargo against war perils. But they contain a provision that many importers and exporters overlook in calmer markets: the seven-day automatic termination notice. If the war risk market deteriorates rapidly — as it did following the Galaxy Leader seizure in November 2023 and again during the initial Houthi missile strikes on commercial vessels in the Red Sea — underwriters can terminate war risk cargo cover across a book of business with seven days' notice. Shipments already at sea, or about to load, may find themselves uninsured for war perils at the precise moment the risk is highest.
Beyond cargo physical loss, the more significant financial exposure for importers is non-payment by the overseas buyer following a political event. If a buyer's country imposes currency controls, expropriates foreign bank accounts, or descends into civil conflict that disrupts banking infrastructure, the exporter who shipped on open-account or documentary credit terms may be unable to collect. This is the domain of trade credit insurance — and it is frequently absent from the coverage picture of trading companies that focus narrowly on cargo insurance.
For manufacturers dependent on specific imported inputs — rare earth minerals from politically exposed African states, semiconductors from Taiwan-adjacent supply chains, agricultural commodities from Black Sea ports — the disruption risk is not only to shipments in transit but to the entire production schedule. A contingent business interruption loss, triggered not by damage to your own facility but by the interruption of a key supplier's operations due to a covered peril, can dwarf the value of any single shipment.
The Coverage Stack Importers and Exporters Typically Need
[Cargo War Risk Insurance](/cargo-war-risk-insurance) Covers physical loss or damage to cargo caused by war, warlike operations, mines, terrorism, strikes, riots, and civil commotion (SR&CC) — perils that are excluded from standard Institute Cargo Clauses (A), (B), and (C). The war and SR&CC endorsements can be purchased separately or as a combined war and strikes package. For shipments transiting the Red Sea, Black Sea, or Strait of Hormuz, war risk cargo cover is not optional — it is the minimum required to address the actual loss exposure. Buyers and sellers should clarify who is responsible for maintaining the war risk element under their trade terms (Incoterms 2020) before the shipment loads.
[Trade Credit Insurance](/trade-credit-insurance) Protects exporters against non-payment by overseas buyers — whether due to commercial insolvency or a political event (expropriation, currency inconvertibility, import license cancellation, war). Political risk sub-limits within a trade credit policy respond to country-level events that make payment legally or practically impossible. MIGA (the Multilateral Investment Guarantee Agency) and private market underwriters including Atradius, Euler Hermes, and Coface are the primary providers. For exporters with concentrated exposure to a single buyer or single country, a standalone political risk policy may be more appropriate than a trade credit wrapper.
[Contingent Business Interruption Insurance](/contingent-business-interruption) Covers revenue loss and increased operating cost when a key supplier or customer is unable to operate due to a covered peril — including, under endorsement, war and political violence. The coverage is triggered not by damage to your own property but by a physical or operational interruption at a named or unnamed supplier location. For manufacturers with just-in-time input chains running through the Red Sea, the Gulf, or through Taiwanese ports, CBI is one of the most material and most underinsured exposures in the portfolio.
[Trade Disruption Insurance](/trade-disruption-insurance) A specialist product that covers financial loss arising from the interruption of a specific trade route or shipping lane — without requiring physical damage to the insured's cargo. Trade disruption coverage responds to events such as port closures, transit lane denial, or government-mandated rerouting. It fills the gap between cargo war risk (which requires physical loss or damage) and contingent BI (which requires physical damage at a supplier/customer location).
What Separates a Good Program from a Bad One
Incoterms and the insurance obligation are not aligned. Under CIF and CIP terms, the seller is required to provide cargo insurance — but the minimum coverage requirement under CIF (Institute Cargo Clauses C) explicitly excludes war perils. Many CIF sellers assume their buyers are covered; many buyers assume the seller has covered war. The gap between assumption and policy text is where uninsured losses occur. A war risk endorsement costs a small fraction of the cargo value, but it must be explicitly arranged.
The seven-day cancellation clause is not understood. War risk cargo cover is cancellable by underwriters on seven days' notice. Importers with long-lead procurement cycles — purchasing grain months in advance, or locking in mineral contracts for forward delivery — need to understand that the war risk element of their cargo cover may not be in force at the time of shipment if market conditions have caused underwriters to cancel and rewrite on new terms. An open cover arrangement with a reliable specialist market provides better continuity than a voyage-by-voyage approach.
Trade credit and cargo insurance are purchased from different brokers who don't speak. The importer or exporter who maintains cargo insurance through a marine broker and trade credit insurance through a commercial lines broker has two separate programs that have likely never been reviewed together. The result is overlapping exclusions — trade credit policies exclude losses that look like cargo claims; cargo policies exclude losses that look like credit events — and genuine gaps in between. A specialty broker with access to both markets can identify where the programs need to dovetail.
Political risk sub-limits in trade credit policies go unread. Many trade credit policies contain low aggregate sub-limits for political risk events — sometimes as low as USD 250,000 per country — that bear no relationship to the actual exposure for a company with a USD 5 million shipment to a buyer in a politically exposed market. The sub-limit is buried in the policy schedule and rarely discussed at renewal.
Country risk ratings are not monitored. Exporters who established payment terms with buyers in a given country two years ago may not have reviewed that country's political risk profile since. Country risk ratings from Dun & Bradstreet, Coface, or MIGA update regularly. A country whose risk profile looked benign in 2023 may have migrated several notches downward by 2026 under any of the major rating methodologies. The trade credit underwriter is watching those ratings; the exporter should be too.
How to Start: Submission Checklist
For a cargo war risk review or trade credit / CBI program assessment, provide:
- Shipment profile: Annual cargo values, commodity types, packaging and stowage (bulk, container, breakbulk), typical transit routes
- Trade terms: The Incoterms 2020 terms you typically trade on, and whether you are buyer, seller, or both
- Geographic exposure: Origin and destination countries, named ports of loading and discharge, transit route
- Current cargo cover: Existing policy details, including whether war and SR&CC endorsements are in place and from which market
- Buyer concentration: Top five buyers by country and annual value (for trade credit assessment)
- Claims history: Three to five years of cargo and trade credit claims
- Supply chain dependencies: Named key suppliers if CBI cover is relevant, along with their location and the nature of the dependency
Request a Coverage Review
The intersection of cargo war risk, trade credit, and contingent business interruption requires a broker who can work across all three markets simultaneously. Each program reinforces the others — and gaps at the seams are where uninsured losses concentrate.
To request a confidential review of your current import or export insurance program — or to obtain indicative terms for a specific shipment or trade lane — submit your details through the quote form below. A specialist with access to the London market cargo war risk market, trade credit underwriters, and admitted US carriers for CBI coverage will respond within one business day.
Request a Quote — or contact us directly to discuss your trade lanes and current program structure.