Broker Marsh and Lloyd’s of London insurer Ascot said on Tuesday they have provided coverage for a vessel carrying grain and food products from Ukraine’s Black Sea ports under its new marine cargo and war insurance facility.
Launched last month, it provides coverage up to $50 million for Ukrainian vital food supplies being shipped through safe corridors established by the newly signed Black Sea Treaty.
The cover adds a big protection to the deal between Moscow and Kyiv at the end of July, which was brokered by the United Nations and Turkey and resulted in unblocking three Black Sea ports.
The total number of vessels that have left Ukraine’s Black Sea ports under the deal touched 27, with two more ships leaving Ukraine’s Chornomorsk port on Aug. 20, according to Turkey’s Defence Ministry.
“Cargo and war insurance will play a pivotal role in the broader resumption of grain and other vital food exports from Ukraine’s Black Sea ports,” David Roe, Head of UK Cargo, Marsh, said.
Grain shipments from Ukraine since the war with Russia have been hampered as its Black Sea ports, a vital route for shipments, were closed, driving up food prices and prompting fears of shortages in Africa and the Middle East.
Until this facility was launched, insurers were willing to cover grain moving out of Black Sea ports only with international navy escorts and a strategy to deal with sea mines.
However, the cost of coverage for such war-exposed business are not cheap. Premiums to go into the broader Black Sea area have risen sharply to as much as 5% of the value of the ship from 0.025% before the invasion.
Marsh and Ascot said they would extend the facility to clients of Lloyd’s of London registered brokers.