Navigating the Strait of Hormuz: Security, Defence and Marine Insurance in a New Risk Environment

A US-Iran ceasefire announced 8 April and since extended was expressly conditioned on the reopening of the Strait of Hormuz. However, traffic has again been suspended due to developments in Lebanon, while the US has doubled down with its own blockade. With limited ship movements and continued tensions, the resumption of traffic seems unlikely in the near future, despite ongoing negotiations.

For shipowners, charterers, commodity traders and insurers, this is not just a geopolitical headline. The blockades have led to cancellation notices from insurers, and sharply rising war risk premiums, and have sparked contractual questions over war risk clauses and safe port obligations. With US-Iran tensions continuing for two months, concerns about whether contracts can be ended are becoming increasingly urgent, requiring parties to examine topics like frustration, force majeure, and cancellation clauses. This demonstrates that the industry more than ever needs to be mindful of the interplay between security, defence and marine insurance.

In the following we will point to some key areas of risk at the intersection of security, defence and marine insurance.

Maritime Security Challenges

War, Piracy, Armed Robbery, and Acts of Terrorism

Maritime security plays a critical role in safeguarding against threats at sea. It encompasses defence measures aimed at countering war, piracy, armed robbery, acts of terrorism, and other circumstances that may compromise maritime safety.

War or war-like conditions, as understood in marine insurance, refer not to the formal declaration of war but to the nature of the measures instituted by a state, encompassing armed conflict, civil war, military manoeuvres, and any situation in which arms or other implements of war are deployed in a manner typical of their function. The decisive criterion is whether the peril arises from hostilities or measures characteristic of warfare. This encompasses the use of conventional, chemical, or biological weapons, the extinguishing of navigational aids, enforced convoys, and similar disruptions to ordinary shipping, rather than whether a state of war has been officially recognised. On this basis, the ongoing tensions between the US and Iran qualify as war or war-like conditions for the purposes of marine insurance cover.

Piracy and armed robbery at sea involve theft, violence, or intimidation directed at vessels, their crew, or cargo. Despite advancements, both remain a significant risk in specific regions, with the waters off the Horn of Africa and the Gulf of Guinea serving as hotspots where armed groups have boarded, hijacked, and held vessels and their crews for ransom. These criminal acts disrupt vital shipping routes and imperil the safety of crew members. Beyond immediate losses, piracy impacts trade, insurance, and overall maritime stability.

Similarly, terrorist organizations may target ships, ports, or offshore facilities to achieve their objectives. These acts can disrupt trade, damage critical infrastructure, and even threaten national security. After a pause in Red Sea shipping attacks following the October 2025 ceasefire, Houthi threats to Red Sea shipping reemerged in late March 2026 amid missile launches toward Israel, followed by an attempted boarding of a civilian vessel on 13 April 2026, classified by UKMTO and Lloyd’s List as a hostile approach.

To tackle these challenges, collaborative efforts are paramount. Naval forces, private security firms, shipping companies, and insurers, together with timely intelligence sharing among stakeholders, form the frontline defence against maritime threats.

Cybersecurity

Cybersecurity also plays a vital role in the maritime sector, particularly during periods of heightened geopolitical tension when state-sponsored cyber-attacks may target vessels, port facilities, and communication networks. These threats encompass ransomware attacks, data breaches, and disruptions to navigation systems. To safeguard against these risks, operators should invest in robust cybersecurity protocols, provide employee training, implement threat detection mechanisms, and ensure regulatory compliance.

Marine Insurance

Given geopolitical tensions, war risk insurance is essential. It covers certain losses due to war, civil unrest, and acts of terrorism. Shipowners, charterers, and commodity traders seek war risk endorsements to protect against unforeseen events.

In the current Hormuz scenario, the market response has highlighted how quickly and sharply war risk conditions can change. Additional war risk premiums, changes to listed areas and, in some cases, cancellation and possible re-pricing of cover force stakeholders to reassess whether a voyage remains commercially and legally viable. Where adequate war cover cannot be obtained on commercially sensible terms, questions arise as to whether a vessel can be required to trade into a high‑risk area.

It is worth noting, however, that the current halt in transits through the Strait of Hormuz has been driven primarily by concerns for crew safety, rather than the unavailability of war risk insurance. While insurance considerations remain relevant, they have not been the decisive factor in suspending vessel movements.

War risk cover sits alongside the broader framework of marine insurance upon which shipowners and operators rely. Hull and machinery insurance covers physical damage to vessels, including collisions, grounding, and machinery breakdowns. P&I clubs address a range of critical issues, including crew injuries, pollution incidents, cargo claims, and collision liabilities. Insurers assess risks based on a number of factors, such as vessel age, maintenance records, and operational profiles. However, effective risk management extends beyond insurance coverage.

Risk Management

The safety of the vessel and its crew remain paramount, and shipowners and operators should:

• understand marine hazards and categorize them effectively;
• apply appropriate risk assessment methods to proposed routes and port calls;
• implement suitable risk controls based on identified causes; and
• regularly evaluate and review risks to ensure continuous improvement.

In practice, this means updating voyage planning, carefully documenting the master’s risk assessments, and maintaining close dialogue with charterers, insurers and other stakeholders when operating near conflict zones or strategic chokepoints.

Legal and Regulatory Landscape

A robust understanding of legal frameworks, coupled with diligent risk management, is crucial for the safety, security, and sustainability of maritime operations. Defence-related sanctions significantly impact the shipping industry. These measures are often imposed by governments or international bodies to address security concerns.

Restrictions on vessel movements, cargo handling, and financial transactions directly affect various stakeholders, such as insurers, shipowners, charterers, and commodity traders. In a situation like the current tensions around Hormuz, sanctions and local regulatory measures can effectively compound the operational risks and must be assessed alongside physical security and insurance availability.

Expertise in maritime law and sanctions compliance is essential for effective risk management and operational continuity. Parties should review key contractual provisions, such as war risk clauses, safe port warranties, force majeure and termination rights, and consider how they operate when access to a particular strait or region is restricted. This is particularly pressing where insurance options become limited or premiums and costs rise sharply.