According to Reuters, this new facility attempts to handle increased risks of port-related trade interruption, including geopolitical concerns.

The collaboration comes at a time when ports throughout the world are dealing with a number of problems that are hurting the flow of products, such the possibility of strikes at American facilities and threats to shipping lanes in the Red Sea from Houthi attacks in Yemen.

The standard insurance coverage for port operations has holes that have been brought to light by these growing hazards.

This new facility for business interruption insurance is the first of its kind, offering up to $50 million in coverage for each occurrence. It is intended to shield ports, even in the absence of physical damage or berth obstructions, from possible income losses brought on by trade interruptions.

The facility can cover ports worldwide because it is not limited by geography. This includes worries about possible restrictions on Taiwanese imports or delays in shipping across the Suez Canal.

The growing necessity for this facility was emphasized by Louise Nevill, CEO of UK Marine at Marsh Specialty, who also pointed out that typical port and terminal policies frequently do not cover such occurrences.

"There is no geographical limit to where the disruption event could occur at this facility," she said. For instance, ports in Singapore could be concerned if the Suez Canal were to close for a while, while ports in the United States might worry about costs from trade interruption in the event that China invades or blocksades Taiwan.

"Since there was no physical damage or berth blockage, the standard policies of ports and terminals would not address these incidents, despite the fact that they were experiencing substantial revenue losses."

Nevill said, "Ports have suffered significant losses despite the absence of physical damage, particularly from recent Red Sea attacks." This further underscores the necessity for this new insurance policy. "We have seen significant disruption events occurring in the last few years," she continued. "These events include the war in Ukraine, the container ship Ever Given blocking Suez, an increase in hurricanes and typhoons, and of course, a global pandemic." These "once in a lifetime" experiences happen frequently.

"Recent geopolitical turmoil has exposed a clear gap in the standard cover available to ports and other cargo facilities," said Ed Parker, head of special risks at TMK, emphasising the exposure of the normal insurance cover to geopolitical turmoil. Numerous well-traveled paths are now inaccessible due to the danger of war.