(Reuters) — Lloyd’s of London insurer Ascot and broker Marsh on Friday launched marine cargo and war insurance for grain and food products moving from Ukrainian Black Sea ports, removing a barrier to getting shipments off the ground.
Russia and Ukraine last week signed a deal, brokered by Turkey and the United Nations, to resume grain and fertilizer exports that have been blocked by war to ease an international food crisis.
UN aid chief Martin Griffiths said on Thursday he was hopeful the first shipment of grain from a Ukrainian Black Sea port could take place as early as Friday, but “crucial” details for the safe passage of ships were still being worked out.
The Lloyd̵7;s of London facility will provide up to $50 million in marine cargo and war insurance coverage, Lloyd’s, Ascot and Marsh said in a statement.
The wrap would “add essential protections to the deal brokered by the UN last week and represents the latest support from Lloyd’s and the insurance industry to help the international community respond to the conflict,” said Patrick Tiernan, head of marketing at Lloyd’s.
Insurers have previously said they were only willing to cover grain moving out of Ukrainian Black Sea ports if there were arrangements for international naval escort and a clear strategy for dealing with naval mines.
A Russian missile attack on Odesa just a day after the agreement was signed has added to their concerns.
“This bespoke, mission-focused facility enables the insurance market to play its part in enabling the vital transport of grain and food products from Ukraine to the wider world,” said Chris McGill, Head of Shipping at Ascot.
The cost of such insurance will vary by cargo, ship owner and port but is likely to be high, insurance sources say.
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.