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The Cost of Insuring Black Sea Shipping Is Out of Control

  • Insurers insisting on 10% of hull value to cover vessels
  • Cost has surpassed that of hiring ships to haul cargoes
Shipping Operations at The Black Sea Port of Constanta
Photographer: Nathan Laine/Bloomberg

The cost of insuring merchant ships sailing to ports in the Black Sea has spiraled out of control, becoming a huge potential impediment to the movement of Russian cargoes from the region.

Underwriters are charging as much as 10% of the value of a ship’s hull -- basically the vessel’s worth as an asset -- for what is called additional war-risk premium, according to four people involved in the market. Some are simply quoting to cover at prices that they know will be refused. There was almost zero cost prior to the war.