War risk insurance – Government steps in

Following decision made last week by Marine insurers in London to raise the war risk premiums for merchant ships, visiting Lebanese and Israeli ports due to the intensifying conflict and naval blockade of Lebanese ports, most shipping companies have dramatically increased their War Risk Surcharge.
 
Although no official statement was made, it is understood that war risk premiums on single voyages to Lebanese ports had been raised sharply by a factor of about 10, from 0.025% of hull value to 0.25% and that war risk premiums to Israeli ports had also risen, but by a lesser extent.
 
Shipping companies advised local shipper's council that:" due extra costs arise for war risk insurance, the lines wish to inform their customers that they have no option but to pass these on to customers by way of a war risk surcharge with immediate effect."
 
Following the decision made by the London insurance market, the Israeli Ministry of Transport, the local Shipper's Council and The Manufacturers Association made a request to the finance ministry to take the necessary steps in order to arrange for the government to cover also maritime carriers.
 
The request is based on The Property Tax and Compensation Fund Law of 1961 which covers Israeli owned and chartered ships but it gives the minister the necessary powers to regard any ship that enter Israeli port as operating for the benefit of the Israeli economy, thus can be regarded as "Israeli foreign asset".
 
Israel's Finance Minister Abraham Hirchson decided to accept the request and advised that the Israeli Government through the tax authority and Inbal insurance company will issue marine insurance policies. A special committee was set up to study the implications of the request. The request, if approved by the committee must be endorsed by the government.