Cargo & Cargo War

At ES Risks, our business is built around specialist insurance. The kind of risks that do not sit neatly in a box and cannot be placed without experience, judgement and strong market relationships.

In this series, our specialists share a personal view of their world. Not product brochures or market soundbites, but real insight into the risks they place, the challenges they navigate, and what specialist broking actually looks like inside the Lloyd’s and international market.

Each blog is written by the specialist who does the work.

By Eddie Lone

Cargo is often described as one of the oldest classes of insurance, and that can give the impression that it is settled, predictable and well understood. From the outside, many assume it is largely administrative: goods move from A to B, a policy is placed, and claims are handled if something goes wrong. In reality, cargo and particularly cargo war demands a level of judgement that goes well beyond placing cover against a list of risks. It is a constantly shifting space where geopolitics, trade patterns, logistics and human behaviour intersect.

At its core, cargo insurance is about protecting the movement of goods. That sounds straightforward, but the simplicity is misleading. Every shipment carries its own context. What is being moved, how it is packaged, who is handling it, where it is travelling from and to, and through which routes – all of these factors shape the risk. Two shipments of the same commodity can present entirely different exposures depending on those variables.

There is also a common assumption that cargo policies are largely uniform. Many buyers expect a standard set of clauses to apply, often anchored around familiar Institute Cargo Clauses, and believe that once those are in place the job is done. The reality is more nuanced. The wording is only the starting point. The real work lies in how those clauses respond in practice, how they are interpreted by different markets, and how they interact with the specifics of a client’s operations.

Cargo war takes that complexity and raises the stakes. It introduces a layer of risk that is inherently volatile and, at times, binary. War risks are not static. They are driven by political developments, regional tensions and, increasingly, by events that sit in the grey space between peace and open conflict. A port that is accessible one week may be subject to restrictions or exclusion the next. A shipping route can shift from routine to high-risk with very little notice.

From the outside, cargo war is sometimes seen as a narrow add-on, a specialist extension that only becomes relevant in extreme circumstances. In practice, it is an integral part of the conversation for many of our clients, particularly those with global supply chains. Even when there is no active conflict, the potential for disruption is always present. Sanctions, blockades, seizures and civil unrest can all trigger war-related exposures.

We have found that the more recent conflicts in Ukraine and the Middle East have brought this to the forefront of our clients' minds especially when they are shipping globally. Some choose to avoid these conflict zones, but others want to remain business as usual which means insurance expertise and solutions are required which is what we as brokers bring to the table.

These conflicts have gained global media attention given the impact they have on the world economy and because of nations involved. ES Risks have been involved with cargo insurance placements across conflict zones for many years, especially in Africa, such as The Democratic Republic of the Congo, Sudan and Somalia. We have consistently had these coverage requirements at the forefront of our minds and are constantly monitoring the situations for any changes in these regions so we are ready for any market change that might arise from this.

One of the key differences between perception and reality in this space is the role of judgement. It is easy to think of cargo placement as a process of matching a risk to a market and securing terms. In truth, our role as the broker is far more interpretive. It involves understanding how underwriters are viewing a particular trade, how their appetite is shifting, and how different markets might respond to the same set of facts.

That judgement is built on experience and, just as importantly, on credibility. In cargo and cargo war, relationships matter. Underwriters are not only assessing the risk; they are assessing the information they are given and the person presenting it. A well-presented risk, with clear context and an honest articulation of its challenges, will often achieve a different outcome to one that is presented superficially or defensively.

There is also a practical dimension to this. Much of the work happens before a risk ever reaches the market. It involves working with clients to understand their operations in detail. That can mean drilling into supply chains, mapping routes, and identifying points of vulnerability that may not be immediately obvious. It also involves challenging assumptions. Clients may have long-standing practices that made sense historically but no longer reflect current conditions.

In cargo war, timing is another critical factor. The market can move quickly in response to events. Additional premiums, exclusions or notice periods can be introduced with little warning. Part of my role as a broker is to anticipate these shifts where possible and to position clients accordingly. That might involve securing terms in advance, exploring alternative routes or structures, or simply ensuring that clients understand the implications of waiting.

Another area where the nuance often goes unrecognised is in claims. Cargo claims are rarely just about whether a loss has occurred. They often hinge on causation, documentation and the precise wording of the policy. In a war context, these questions can become even more complex. Was a loss caused by a war peril or a standard marine peril? Did an exclusion apply at the time of the loss? Was the vessel in a declared area, and if so, under what terms?

These are not academic questions. The answers can materially affect the outcome for the client. This is where experience and attention to detail become critical. A broker who understands how a policy is likely to respond, and who has anticipated potential points of contention, can make a significant difference when a claim arises.

It is also worth acknowledging that not all complexity in cargo and cargo war is technical. Some of it is human. Shipping is an industry that relies on multiple parties: shippers, carriers, freight forwarders, port authorities, each with their own incentives and constraints. Miscommunication or misalignment between these parties can create exposures that are not immediately apparent in the documentation.

As a specialist broker I have to be comfortable operating in that environment. That means asking the right questions, sometimes repeatedly, and being willing to engage with operational detail. It also means recognising when something does not quite fit and taking the time to understand why.

The value of expertise in this space is not always visible in a single transaction. It is often cumulative. It is reflected in the consistency of outcomes over time, in the avoidance of gaps in cover, and in the ability to navigate periods of market stress without reactive decision-making. When a market tightens or a geopolitical event disrupts established patterns, those foundations become particularly important.

This part of the market matters because global trade depends on it. Goods continue to move in uncertain conditions, often through regions that carry inherent risk. The ability to insure those movements, and to do so in a way that is robust and responsive, underpins that activity. When it works well, it is largely invisible. When it does not, the consequences are immediate and tangible.

We believe that a genuine specialist in cargo and cargo war is not defined by the products they place, but by how they think about risk. It is a discipline built on attention, context and judgement. It requires an understanding that the detail matters, that conditions can change quickly, and that the quality of advice can directly influence the outcome.

This article forms part of the ES Risks Specialist Series, where our brokers and technical specialists share insight into complex, non-standard risks across the Lloyd’s market.

If you would like to discuss a specialist or unusual risk, or simply want to continue the conversation, please get in touch with the ES Risks team.