Strait of Hormuz: ‘Blocking and Trapping’ and ‘War Risk’ cover

The security situation in the Gulf region remains volatile and uncertain in recent weeks, prompting heightened concern among shipowners, operators, insurers, and charterers regarding navigational risks and insurance exposure. While public statements have been made regarding the status of the Strait of Hormuz, there is limited clarity as to how and when the conflict will be resolved, or whether safe and predictable transit can be sustained over the medium to long term.

This advisory provides a concise overview of the issues surrounding Blocking and Trapping (B&T) and War Risk cover, focusing on the implications for vessels currently trading in or near the Strait of Hormuz.

Blocking and Trapping (B&T)

Based on current reports, there is a reasonable basis to consider that a vessel may be regarded as ‘blocked and trapped’ where, despite the lack of clarity on the status of the Strait of Hormuz, the operational reality – further complicated by the presence of US enforcement and blockade-type measures in the region – renders safe transit effectively impossible.

Although no single authority controls transit through the Strait, and further no official closure notice has been issued, the regional threat level has reportedly been raised to “Critical – an attack is almost certain,” with multiple commercial ships already stuck in the Persian Gulf region. Many vessel operators have consequently avoided the area entirely.

Furthermore, there have been broadcast warnings from Iranian military sources declaring the Strait effectively closed, and mariners presently in the region have confirmed hearing these transmissions and have stated unequivocally that they would not attempt passage under these conditions. It is also worth noting that, on previous occasions, public announcements indicating that the Strait was ‘open’ have not always translated into vessels being permitted to transit by armed forces on the ground, potentially reflecting miscommunication and/or a lack of clarity within governmental or military institutions as to the criteria required for safe passage.

Traffic has decreased to such an extent that analysts describe the Strait as “de facto closed”, not by law but due to highly escalated risk profile, as no shipowner is willing to order a transit under active missile and drone threats. From an insurance standpoint, circumstances involving immediate physical danger, widespread cancellation or withdrawal of cover, and credible threats of detention or attack may collectively satisfy the threshold for recognising a vessel as blocked and trapped.

Practically speaking, unless a vessel originates from a country perceived as non hostile by Iran – which is increasingly uncertain given that multiple countries have experienced hostilities in the recent weeks – proceeding through the Strait appears to carry a materially elevated level of risk, which may be sufficient to potentially meet the criteria for B&T under certain policy wordings.

From our experience, recent historic cases show that arguments can exist both for and against the actions of a prudent shipowner in similar circumstances (such as the war in Ukraine). As such, any determination of B&T will ultimately depend on the precise wording of the relevant policy and actions being taken by the respective shipowner in response to evolving threat environment.

War Risk cover

A typical War Risk policy may respond where a vessel is exposed to actual hostilities or warlike operations within a recognised high‑risk area such as the Gulf. There is a reasonable argument that the recent incidents fall clearly within that category.

It is, however, customary in the event of an outbreak or escalation of war for underwriters to cancel existing War Risk cover, typically on seven days’ notice (subject to terms of each policy). This reflects customary market practice. If a vessel is able to safely exit the affected area within this notice period, cover may continue uninterrupted until they are safely out from the risk zone.

If a vessel cannot leave within the notice period, owners should expect significantly increased difficulties in obtaining cover and/or substantially increased premiums once the cancellation period expires. This pattern is consistent with the behaviour observed following recent escalations, where underwriters have withdrawn or materially amended cover due to the heightened hostilities. Owners should therefore be aware that cancellation provisions may be invoked swiftly in the present environment and should review their policy wordings before planning any transit through the region.

Conclusion

Subject strictly to policy wording, there is a credible argument that B&T provisions may be engaged in the present circumstances. Vessels trading in the affected region should also anticipate potential implications for war‑risk cover, including the possible issuance of notice‑of‑cancellation.

For completeness, we note that under a typical B&T clause, a vessel must usually remain trapped for a significant and continuous period – often between six and 12 months, depending on policy wording – before any claim for a constructive or total loss may arise under this provision.

While this article provides a high‑level overview, each situation will turn on its own facts and the exact wording of the relevant policy. If you are exposed to the ongoing conflict in the Gulf, our Shipping team can advise on risk management, policy interpretation and next steps. Learn more about our shipping expertise.