Govt Launches Sovereign-Backed USD 1.5 Billion Maritime Insurance Pool Amid Middle East Tensions

New Delhi, May 13 (KNN) The government has launched the ‘Bharat Maritime Insurance Pool’ (BMIP) with a coverage capacity of USD 1.5 billion to ensure uninterrupted maritime insurance coverage amid ongoing geopolitical tensions in the Middle East.

The insurance pool launched by Department of Financial Services (DFS) under Finance Ministey is backed by a sovereign guarantee of USD 1.4 billion (around Rs 12,980 crore).

The insurance pool has been established to provide coverage for maritime risks including Hull and Machinery, Cargo, Protection and Indemnity (P&I), and War Risk for Indian-flagged or controlled vessels, as well as ships originating from or destined for India.

DFS Secretary M. Nagaraju handed over the first Marine Hull & Machinery War Policy document issued under BMIP to Hoger Offshore and Marine Private Limited.

The policy was issued by The New India Assurance Company Limited and provides financial protection against war-related risks while operating in high-risk maritime zones.

A Marine Cargo War Policy was also issued to Vedanta Sterlite Copper Limited covering imports of cable wires, while another policy was extended to Balrampur Chini Mills Limited.

According to officials, the initiative aims to address risks arising from sanctions and geopolitical uncertainties that may lead foreign insurers and reinsurers to withdraw maritime coverage support.

The government also highlighted concerns regarding dependence on International Group Protection and Indemnity (P&I) Clubs for third-party liability insurance covering oil pollution, cargo damage, crew injury and collision liabilities.

Under the framework, domestic insurers participating in the pool will issue policies using the collective underwriting capacity of BMIP, while risks will be reinsured proportionately among member insurers. GIC Re has been appointed as the pool administrator and will oversee reinsurance arrangements and performance monitoring.

The government stated that claims up to USD 100 million will be serviced through the pool’s own capacity, while claims exceeding that threshold will be supported through the sovereign guarantee after exhaustion of reserves, member contributions and reinsurance arrangements.

Officials said the BMIP framework is expected to strengthen India’s maritime risk protection system, enhance sovereign control over maritime trade and ensure continuity of trade operations during periods of geopolitical disruptions or sanctions.

(KNN Bureau)