A new legislative proposal on war insurance will ensure that the Danish merchant fleet can remain insured and continue sailing in the event of war. In the extraordinary situation where Denmark and Danish shipping are severely impacted by war – and the commercial insurance market has collapsed – there is a need for a war insurance scheme that guarantees the Danish merchant fleet remains insured and operational. This benefits both Denmark and the shipping companies.
A new government proposal to activate the so-called War Insurance Institute aims to ensure that it occurs.
“The timing is exactly right for the activation of the War Insurance Institute. It’s always wise to be well insured. And of course, the shipping companies are covered through the regular commercial market. But in an extraordinary war scenario, it can be critically important that the Danish merchant fleet is still able to operate. This proposal contributes to securing that possibility if Danish shipping can no longer be covered by commercial insurance. And like with all other insurance schemes, I sincerely hope we never have to use it,” said Anne H. Steffensen, CEO of Danish Shipping.
The proposal includes a state loan guarantee of six billion kroner upon activation of the War Insurance Institute.
“We live in a more uncertain world. There are global tensions and war on European soil. That’s why it’s important that we are prepared – even for the most unpleasant scenarios. It’s about showing timely caution. It is absolutely essential that we can maintain the operations of the Danish merchant fleet in the event of war. Denmark is among the world’s largest maritime nations, so the importance of keeping our merchant fleet afloat cannot be overstated. This is a major Danish strategic strength. That’s why we’re taking action now and allocating six billion kroner to secure the Danish merchant fleet, thereby safeguarding Danish jobs and economic growth,” said Minister for Industry, Business and Financial Affairs, Morten Bødskov.
The loan facility is intended to ensure the Institute has sufficient liquidity upon activation. The loan will be repaid through contributions (premium payments) from shipping companies when the Institute is activated. Thus, it is a scheme funded by contributions from the shipping industry and supported by a state-backed credit line.
The legislative proposal will now be sent for consultation and is expected to be presented in October.
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