Marsh Unveils US$50m Insurance for Port Blockages Amid Risks
Marsh has launched a US$50m port blockage insurance facility amid heightened supply chain risks.
Marsh McLennan, a global powerhouse in risk, strategy and people, operates in 130 countries through its four core businesses: Marsh, Guy Carpenter, Mercer, and Oliver Wyman.
This ground-breaking insurance facility, introduced by Marsh, is designed to address the burgeoning issue of port blockages affecting supply chain operations worldwide.
It follows the notable disruption caused by the collapse of the Francis Scott Key Bridge, which had a profound impact on the Port of Baltimore.
This new insurance product can be acquired independently or as an enhancement to existing coverage, offering global clients protection against revenue losses stemming from third-party accidents such as vessel sinking, collisions leading to waterway closures or natural disasters.
Supported by a consortium of Lloyd’s of London and London market insurers with A+ ratings, the facility's flexible coverage can be tailored to match specific operational risks and requirements, making it an adaptable solution for various maritime challenges.
The growing frequency and severity of port blockages have highlighted the urgent need for specialised insurance.
Disruptions in port operations can lead to substantial setbacks in global supply chains, with businesses experiencing delays, increased costs due to rerouting, inventory shortages and damage to their reputation from unmet delivery commitments.
Eonomic repercussions can be severe for regions heavily dependent on port activities.
Several factors exacerbate the risk of port blockages:
Climate change: The rise in sea levels and increased incidence of extreme weather events elevate the risk of port closures.
Geopolitical tensions: Trade disputes and regional conflicts can lead to restrictions on port access and operations.
Cyber threats: As ports become increasingly digitalised, the threat of cyber attacks that disrupt operations grows.
Larger vessels: The trend towards larger ships heightens the potential impact of any single vessel incident.
Aging infrastructure: Many ports are burdened with outdated infrastructure, increasing the likelihood of disruptions.
On the launch, Louise Nevill, CEO of UK Marine, Cargo & Logistics at Marsh, comments: “Port blockages around the world are increasing with frequency and severity, and are resulting in debilitating consequences for businesses involved in international trade.
"As global trade continues to expand, this new facility offers clients a rapidly available layer of insurance cover to protect operations and recovery in the event of port and terminal disruptions.”
The financial protection offered by Marsh’s new facility is vital for businesses navigating these complexities.
By providing a safety net against revenue loss due to port blockages, the insurance helps companies recover more swiftly and shifts some financial risks to insurers.
The ability to tailor the facility’s coverage to individual business needs, combined with the option to supplement existing insurance policies, ensures comprehensive protection.
Looking ahead, the demand for advanced risk management solutions, such as Marsh’s port blockage insurance, is likely to grow.
Future developments may include the integration of real-time data analysis technologies, the rise of parametric insurance products and a heightened focus on enhancing resilience within port infrastructure and operations.
In a world where supply chains are increasingly intricate and global trade continues to expand, Marsh's new facility represents a significant step forward in helping businesses manage risk and ensure continuity.
It’s a crucial innovation for an uncertain world, providing the resilience needed to navigate and thrive amidst the evolving challenges of the supply chain sector.
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