Japanese Companies To Continue Insuring Vessels In Russia's Waters Until April - Reports

TOKYO (UrduPoint News / Sputnik - 30th December, 2022) Japanese insurance companies will continue to insure vessels in Russian waters against possible damage caused by hostilities until April 2023, Japanese media reported on Friday.

According to the NHK broadcaster, the amount of insurance coverage will be less than in 2022. Moreover, there is no understating as to whether Japan's insurance companies will continue to provide their services from April.

Earlier in the month, media reported that, starting January 1, 2023, ships will not be insured from damage received in possible military conflicts in waters around Russia and Ukraine, which reportedly could affect LNG supplies under the Russian project "Sakhalin-2," in which Japan takes part. Three Japanese insurance companies, Tokio Marine&Nichido Fire Insurance Co, Sompo Japan Insurance Co, and Mitsui Sumitomo Insurance Co, started sending relevant notices to their clients on December 23.

However, since damage received by an LNG tanker can inflict multimillion losses, transportation without insurance will become effectively impossible. According to Kyodo news, in this context, the Japanese government contacted the companies on December 27, asking them to resume providing insurance for vessels carrying LNG. As a result of these talks, the companies have agreed to continue to insure cargo ships in January 2023.

Ships navigating in Russian or Ukrainian waters were required to have "war risk insurance," concluded separately from main contracts and stipulating compensation for possible damage, including from sinking of the ship as a result of hostilities.