The Indian government has launched a $1.5 billion Bharat Maritime Insurance Pool (BMIP) with a sovereign guarantee of $1.4 billion to ensure continuous maritime insurance coverage amid the ongoing tensions in West Asia.
The BMIP covers all maritime risks, including hull and machinery, cargo, and war risks for Indian-flagged or controlled vessels or those destined to or starting from India.
Under the BMIP, the New India Assurance Co Ltd has issued the first policy providing financial protection against war perils while navigating through high-risk war zones.
The policy has been handed over to Hoger Offshore and Marine Pvt Ltd in a ceremony, and another marine cargo war policy was presented to Vedanta Sterlite Copper Ltd, covering its import of cable wires.
The BMIP ensures insurance cover in high-risk areas or sanctioned environments, facilitating continued shipping operations and critical trade flows.
The pool with a sovereign guarantee will provide sufficient underwriting capacity to cover risks adequately and enable the country to increase sovereign control over maritime trade.
A governing body has been constituted to oversee the functioning of the pool, including approvals regarding the invocation of the sovereign guarantee.
Policies will be issued by domestic insurers that are pool members, using the combined underwriting capacity of the pool.
The pool will enable the country to strengthen sovereign control over maritime trade and ensure continuity of trade even in the event of withdrawal of re-insurance coverage due to sanctions or geopolitical tensions.
