Marine and political risk insurance
What is a war risk premium and how is it set?
Additional war risk premiums are charged per voyage as a percentage of hull value. How they work, why quotes differ so much and what drives them in 2026.
Guide
Marine and political risk insuranceLast updated
3 minute read
By Zed Three analysts
Short answer
A war risk premium, often called an additional premium, is the extra charge underwriters levy for a voyage into a high risk area. It is usually quoted as a percentage of the ship's hull value for a set period, commonly seven days, and it rises and falls with attacks, mines and diplomacy in that area.
Last updated
What drives the premium
Underwriters look at the area, ship type, flag, ownership links, cargo, port calls and time spent inside the listed area. A tanker calling at a Gulf terminal is rated very differently from a bulk carrier passing through the Gulf of Aden.
Why quotes vary so much
Figures in the press measure different things. Brokers quoted 6% to 10% of hull value for Gulf tanker transits in early October 2026, against about 0.25% before the war. Other reports measure insurance as a share of cargo value, or quote 1% to 5% for different ships and dates. Always compare on the same basis and date.
Who ends up paying
Owners pay the underwriter, but charter parties often pass additional war premiums to charterers, who pass them into freight and ultimately into delivered prices for cargo owners. Check your contracts for war risk clauses.
What happens next?
We assess it is likely that Gulf additional premiums remain several times pre-war levels through year end.
We assess it is likely that premiums fall sharply within weeks if a verified reopening of Hormuz is agreed.
Likelihood ranges are Zed Three editorial judgments as of Nov 2, 2026, not advice.
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Frequently asked questions
How big are war risk premiums in the Gulf now?
Before the 2026 war, Gulf cover cost about 0.15% to 0.25% of hull value; by early October brokers quoted 6% to 10% for tanker transits.
Who pays the additional war risk premium?
The shipowner pays the insurer, but many charter parties pass the cost to the charterer.
How long does a war risk premium cover?
Usually a fixed period inside the listed area, commonly seven days, after which a further premium may apply.
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