A Timely Update to Strengthen National Readiness
Danish Shipping reports that the Folketinget has unanimously passed the revised War Risk Insurance of Ships Act. The organization views this decision as a timely step that reinforces Denmark’s ability to keep its fleet operating during conflict. The act also highlights the strategic importance of shipping in national preparedness.
Ensuring Coverage When Markets Become Unstable
Under normal circumstances, Danish-flagged vessels rely on commercial insurers. However, these insurers may withdraw or limit coverage during wartime. Because of this challenge, the updated legislation ensures that vessels can continue sailing even if commercial war-risk markets collapse. This shift creates a more reliable safety net for maritime operations.
Expanded Role of the War Insurance Institute
The act introduces a clearer and broader mandate for the War Insurance Institute. Once the scheme is activated, the Institute provides insurance for hull damage, crew, passengers, and cargo. This expansion replaces the earlier, narrower structure and gives the maritime sector more certainty during emergencies.
State Guarantee Secures Fast Payouts
To support rapid response, the government has established a DKK 6 billion state loan guarantee. This facility delivers immediate liquidity when the war-risk scheme is triggered. The Institute will settle claims through this fund and later repay the loan using premiums collected from shipping companies. As a result, insurance payouts can be processed faster and with greater stability.
Strengthening Supply Chains Across the Region
Danish Shipping notes that the updated act safeguards essential supply routes. It supports the steady movement of goods, energy, and critical items for Denmark, the Faroe Islands, and Greenland. The framework reflects the country’s commitment to maritime safety, shipping technology advancement, and compliance with evolving IMO regulations.
A More Resilient Maritime Future
With this legislation, Denmark enhances its resilience in a period marked by heightened geopolitical uncertainty. The act provides the sector with a stronger foundation to maintain operations, protect crews, and support national and regional supply chains during conflict.
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Source: Danish Shipping
