(Reuters) — Broker Marsh and Lloyd’s of London insurer Ascot said on Tuesday they have provided cover for a vessel carrying grain and food products from Ukraine’s Black Sea ports under its new marine cargo and war insurance facility.
Launched last month, it provides coverage of up to $50 million for Ukrainian vital food supplies sent through secure corridors established by the recently signed Black Sea Treaty.
The cover provides cover for the deal between Moscow and Kyiv in late July, which was brokered by the UN and Turkey and resulted in the unblocking of three Black Sea ports.
The total number of ships that have left Ukraine’s Black Sea ports under the deal reached 27, with two more ships leaving Ukraine̵7;s Chornomorsk port on August 20, according to Turkey’s Defense Ministry.
“Cargo and war insurance will play a critical role in the wider resumption of grain and other essential food exports from Ukraine’s Black Sea ports,” said David Roe, head of UK shipping, Marsh.
Grain shipments from Ukraine since the war with Russia have been hampered as its Black Sea ports, a key shipping route, were closed, driving up food prices and causing fears of shortages in Africa and the Middle East.
Until this facility was launched, insurance companies were willing to cover grain moving out of Black Sea ports only with international naval escort and a strategy to deal with naval mines.
However, the cost of coverage for such war-torn companies is not cheap. Premiums for entering the wider Black Sea area have risen sharply to as much as 5% of the vessel’s value from 0.025% before the invasion.
Marsh and Ascot said they would extend the facility to clients of Lloyd’s of London registered brokers.