The European Commission has unveiled new rules requiring vessels to provide proof of insurance when transiting EU waters, according to the Global Trade Review.
The move comes as both the EU and UK maritime insurance markets face growing pressure to ensure compliance with international sanctions and risk management standards.
The UK, as a leading hub for maritime insurance, plays a central role in providing Protection and Indemnity (P&I) cover and other maritime insurance services through commercial insurers and mutual P&I clubs. These insurers are responsible for covering a range of risks, including environmental liabilities, cargo damage, and collision costs.
The introduction of sanctions following Russia’s invasion of Ukraine has heightened the focus on insurance markets in the UK. Regulators have raised concerns about instances where falsified documents were used to obtain insurance for vessels involved in sanctioned trades. In November 2024, UK authorities reported that some companies had submitted fake certificates of origin to secure insurance while violating G7 oil price restrictions.
In response, the UK’s Prudential Regulation Authority and the Financial Conduct Authority have urged insurers to enhance their due diligence and closely monitor their exposure to vessels operating under unclear ownership or in jurisdictions with weaker regulatory frameworks. This is particularly important for vessels within the so-called shadow fleet, which operate without standard oversight or regulatory reporting.
There have also been concerns about insurers potentially facilitating sanctions evasion, with some market participants noting the rise of companies providing cover with limited underwriting checks. Such practices could undermine efforts to regulate the growing fleet of high-risk, uninsured vessels.
The new European Commission rules, which require vessels to prove they are properly insured while passing through EU waters, add to the compliance burden. Shipowners and operators will need to ensure they can provide real-time documentation of insurance coverage to avoid penalties or delays.
These requirements will likely affect both the EU and UK markets, prompting insurers to adapt their practices and respond to the rising demand for transparency and accountability in the maritime sector.
