Ship insurers plug hole in Iran oil cover left by U.S. sanctions | Reuters
▻http://uk.reuters.com/article/uk-oil-iran-insurance-idUKKCN0WO1T2
Ship insurers have stepped in to help plug a shortfall in cover for transporting Iranian oil resulting from the fact that U.S. reinsurers are still restrained by Washington’s sanctions, according to officials involved in the initiative.
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The gap in third-party liability insurance and pollution cover for vessels has been addressed through this week’s initiative by the International Group of Protection and Indemnity (P&I) clubs, which brings together leading marine insurers owned by shipping clients and reinsured internationally.
The International Group has created a “fall-back” of $500 million additional coverage per ship for Iranian oil at no extra cost to the members, the Japan P&I Club said on Tuesday. This raises the default insurance coverage for tankers carrying Iranian oil to $580 million per ship from $80 million.
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Although $580 million coverage is still less than 10 percent of the normal liability coverage of $7.8 billion per ship, Asian shippers such as China, India and South Korea, and some shippers in Europe, may find that enough to transport Iranian oil, an official with Japan P&I Club said.
Japanese shippers, however, are more risk-averse and may continue to use the government’s special sovereign shipping insurance to import Iranian oil until normal P&I coverage becomes available again, industry officials have said.