1 Introduction and overview
The topic of this article is the insurance of political risk under the Nordic Marine Insurance Plan 2013 (NP). The Nordic Marine Insurance Plan is a Nordic agreed standard contract regulating insurance for vessels. The main types of insurance in this context are hull insurance, covering damage to and loss of hull and machinery, and loss of hire insurance, covering loss of freight income in certain defined situations.
The term "politics" refers in everyday life to the way in which countries are governed, and to the ways in which governments make rules and laws to manage human society properly. The concept of “political risk” means risk created by political institutions or political decisions. In terms of insurance for vessels, risk means the risk of damage or loss covered by the insurance. The most serious political risk for vessels is war and war-related situations where the use of weapons may directly strike the vessel, but other types of political risks may also strike the vessel in serious ways. Typical examples are the arrest and detentions of vessels due to real or alleged breaches of customs or trade regulation, causing extensive delay if not literal damage to the vessel. Examples from case law are the detainments of the vessels B Atlantic in Venezuela, Poavosa Ace in Algeria and Sira, Team Tango and Heroic Idun in Nigeria. Closely connected to this risk are the similar attacks on vessels caused by political groups fighting existing regimes. Such groups may not have the political legitimacy of the ruling government, but a seizure by such a group may have the same consequences for the assured. The concept of political risk in this article therefore includes risk created by groups opposing the elected or governing regime.
This means that the topic of this article is more specifically the coverage under the NP for damage to or loss of the vessel and loss of income caused by risks created by political acts, either based on political authority in the form of legislation, regulations or administrative decisions, or else created by political groups opposing the ruling regime. This risk is different from the so-called perils of the sea creating the maritime risks that the vessel encounters when sailing between ports, in the form of bad weather, navigational errors, collisions with other vessels etc. Such everyday risk may normally be calculated based on statistics gathered over several years. Political risk, on the other hand, is more unpredictable and difficult to calculate both as to their frequency and the magnitude of the losses. It may also strike the vessel in different ways from the ordinary marine risks, which mainly result in damage to the vessel followed by either loss of income or total loss. Seizure and long-time detainment will result in loss of income, but not necessarily damage to the vessel.
Due to these different characteristics, marine insurance conditions have at all times made a distinction between war risk and marine risk cover. This distinction dates back to the first Norwegian Marine Insurance Plan in 1871 and it has been developed and refined in later versions of the Norwegian and later the Nordic Plan. A central feature of this distinction is that the war risk cover is extended to cover loss of hire and total loss due to detention of the vessel by foreign state power.
A major revision of the distinction between marine risk and war risk in relation to political risk under the NP took place in 2019. One important purpose of the amendment was to provide better protection against the political risk created by less developed regimes, in relation to detention without clear legitimate reasons of vessels in port, resulting in long periods of delay. This was achieved by extending the marine risk cover, combined with a clarification of the war risk cover in this regard. However, even if this resulted in better marine risk cover and a clarified borderline between war and marine risk cover, the distinction between marine risk and war risk is still difficult. One issue is that the criterion for triggering the war risk cover may be difficult to use in practice. Another issue is that the criterion is so strict that the difference between the extended cover and actual war risk may be blurred. A third issue is that the cover is first and foremost tied to interventions taken by state power. In today’s geopolitical environment, several non-state groups are seizing vessels for political or even criminal purposes. The question, thus, is how to handle this risk.
These problems are reflected in several arbitration cases from the last years, the latest being the Heroic Idun award from 5 August 2025. The problems are also reflected in discussions in the market where, in particular, part of the UK marine insurance market advises against war risk cover on NP conditions, arguing that UK war risk conditions provide better cover.
The purpose of this article is to discuss the cover for political risk under the NP in light of these problems, and to investigate whether the UK conditions provide better cover.
In what follows, the Nordic regulation is presented in chapter 3 and the UK regulation in chapter 4. As an introduction to these discussions, chapter 2 provides an overview of the legal sources. Chapter 5 concludes the article with some reflections.