American Steamship Owners Mutual P&I, London P&I Club, and Skuld (Assuranceforeningen) — three of the world's major Protection & Indemnity clubs — issued cancellation notices for War risk coverage across the Persian Gulf and Gulf of Oman, effective approximately 72 hours from 2 March.
P&I insurance underwrites third-party liability for commercial shipping: crew injury, pollution, cargo damage. Without active P&I coverage, a vessel cannot be financed by any major maritime bank or commercially operated by any major shipping line. When CMA CGM, Maersk, Nippon Yusen, Mitsui, and Kawasaki Kisen halted Hormuz transits on 1 March , those were operational decisions — reversible within hours if conditions changed. The P&I cancellations are structural. Reinstatement requires a full syndicated risk reassessment across multiple underwriting syndicates. Each club must individually evaluate the residual threat environment, consult reinsurers, and recalculate exposure.
The last comparable insurance withdrawal from the Persian Gulf occurred during the Iran-Iraq Tanker War of 1984–1988, when Iraqi and Iranian forces attacked more than 400 commercial vessels. The collapse of War risk coverage drove the US Navy's Operation Earnest Will in 1987 — Kuwait re-flagged eleven tankers under the American flag because they could no longer obtain commercial insurance at any price. Coverage was not fully restored until months after the August 1988 ceasefire. The current conflict has produced more severe disruption in four days than the Tanker War generated across four years, because the Tanker War left the strait itself passable; this one has not.
The cancellation creates a second closure of the strait of Hormuz — financial rather than military — that diplomats cannot negotiate away. Iran's Expediency Council secretary Mohsen Rezai declared the strait 'officially open' on 28 February while simultaneously designating US warships as 'legitimate targets.' The declaration satisfied no insurer and no shipowner. A ceasefire, when it comes, stops the fighting. It does not reinstate P&I coverage. The economic damage to global energy supply chains will persist on the insurance market's timeline, not the battlefield's.
