Recent global events, including escalating geopolitical tensions, are having wide‑reaching impacts that are being felt across communities and businesses alike.
For many organisations, these impacts are translating into increased fuel and freight costs, supply‑chain disruption, fluctuating asset values and, in some cases, pressure on profitability.
As businesses adjust to these conditions, changes may occur to activity levels, turnover, asset values, supply arrangements or contractual obligations. We encourage you to stay in contact with your EBM Account Manager, who can assist with reviewing your insurance arrangements to ensure they remain appropriate for your circumstances.
Outlined below are some common insurance products and key considerations (but not limited to) that may be affected by the current geopolitical environment.
Acts of War and Government Actions
Insurance coverage depends on a number of factors, including the nature of the loss, the type of cover held, and the specific policy terms and conditions.
While general insurance policies commonly provide protection for insured events such as fire, storm, or burglary, the majority of policies include exclusions for loss or damage arising directly or indirectly from acts of war, hostile actions, or similar events. Some policies may also exclude losses resulting from government intervention, sanctions, or embargoes.
If your business operations, suppliers, customers or assets are located in affected regions, we recommend discussing your specific policy wordings with your EBM Account Manager.
Property and Underinsurance
Rising construction costs, inflationary pressures and increased replacement values can materially impact the adequacy of your sums insured.
If your property sums insured have not been reviewed within the past 12 months, there is a strong likelihood they may need to be updated. Inadequate sums insured can result in reduced claim payments and significant financial shortfalls at the time of loss.
A review now may help mitigate the risk of underinsurance at a time when claim costs are rising.
Marine Cargo and Transit Risks
Geopolitical instability can significantly disrupt cargo movement, leading to shipping delays, route diversions, port congestion, and increased exposure to loss or damage while goods are in transit. In certain regions, these elevated risks may also trigger additional policy exclusions or higher excesses under marine cargo insurance.
Marine cargo policies typically include—or offer the option to include—War and Strikes, Riots and Civil Commotion (SRCC) cover, as these risks fall outside the scope of standard marine cargo insurance. However, leading global maritime insurers have withdrawn war risk cover for Iran and Gulf waters due to what they describe as “materially heightened level of geopolitical and operational uncertainty”
At the same time, reinsurers are rapidly reducing capacity. This has forced many insurers to issue blanket war risk cancellations on extremely short notice, making the ongoing provision of War and SRCC cover increasingly difficult and, in some cases, actuarially unviable.
Against this backdrop, it is critical to understand which transit routes, conveyances, and storage arrangements are insured under your policy, and to assess whether your coverage remains adequate in light of current and evolving shipping conditions.
Liability Exposures
Supply‑chain disruptions, delays or failures may increase the risk of third‑party claims, particularly where contractual obligations are not met, or where goods or services cannot be delivered as expected.
These circumstances may create potential exposures under public liability or products liability policies. A review of policy terms, limits and contractual risk transfer arrangements is recommended where supply pressures are increasing.
Contractual Considerations and Fixed‑Price Contracts
Supply disruptions and rising input costs may increase the risk of contractual non‑performance or financial strain, particularly under fixed‑price contracts.
Insurance policies may not respond to cost overruns, penalties, or contractual disputes arising from increased costs or delays. We recommend reviewing contracts and aligning your insurance programme with your contractual risk exposure where possible.
Business Interruption
Business interruption insurance is generally triggered by damage to insured property, subject to the policy’s trigger clauses and limitations.
It is important to review and document how your business interruption cover responds, particularly where losses arise from supply‑chain disruption or indirect impacts that may not be linked to insured physical damage.
Your EBM Account Manager can assist in analysing trigger clauses, indemnity periods and any relevant limitations.
Corporate Travel Insurance
Unlike leisure travel insurance, corporate travel policies are typically designed to cover all approved business travel undertaken during the period of insurance.
Coverage for cancellations, disruptions, evacuation or medical assistance may be affected by destination‑specific advisories, sanctions or exclusions. If employees are required to travel internationally, including to higher‑risk regions, a policy review is recommended.
Preserving Cashflow and Managing Risk
In an environment of rising costs, preserving cashflow is an increasing priority for many organisations.
Premium Funding may provide a flexible alternative to paying insurance premiums as a single upfront payment, allowing costs to be spread over time and freeing up working capital for other business needs.
You may also wish to consider a Trade Credit policy if you don’t already have one. This is an important risk mitigation tool that protects you from non-payment by customers. For exporters, cover can also extend to commercial and political risks, including war, riots, and government intervention.
If you would like to explore whether these options may be suitable for your business, please contact your EBM Account Manager.
Here to Help
Mid‑term policy reviews are available to consider changes to your business, including turnover, wages, asset values or stock levels. Our aim is to take a balanced and considered approach to ensure you have appropriate protection when you need it most.
If you have any questions regarding your insurance cover or how current global conditions may affect your policies, please contact your EBM Account Manager.
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General Advice Notice
This article provides general advice only and not personal advice. In giving this advice we have not taken into account your personal circumstances, objectives, financial situation or needs. Read our Financial Services Guide for more information. Please read the policy documentation, including any Product Disclosure Statement and Target Market Determination to consider whether the insurance is right for you. If you have any queries, please contact us on 1300 755 112.
