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It has been widely reported that the recent escalation of conflict in the Middle East has led to marine insurers cancelling war risks cover for vessels operating in the Strait of Hormuz, with suggestions the aviation war market may follow suit.
Many marine and aviation policies include provisions which allow insurers to cancel or review the geographical limits of their cover by issuing Notices of Review or Cancellation. Generally, the effect of Notices sent by Insurers in these circumstances is that within a specified number of days, either (i) cover is cancelled entirely; or (ii) the cover is amended to exclude certain countries from a particular date.
As discussed below, the recent judgment in the Russian Aircraft Lessor Insurance Policy Claims confirms that such notices will not always entitle insurers to avoid liability in a war scenario. However much will turn on the facts. It is vital that insureds take care if they receive such Notices, scrutinising their terms carefully and responding appropriately.
Grip of the Peril
Notices of Review issued by War Risk insurers to certain aircraft Lessors around the time of the Russian invasion of Ukraine in February 2022 were considered by Mr Justice Butcher in his judgment in the Russian Aircraft Lessor Insurance Policy Claims in June 2025. HSF Kramer represented AerCap, the world's largest aircraft leasing company, claiming from its insurers for the loss of 116 aircraft and 23 engines which had been on lease to Russian airlines and which could not be recovered following Russia's invasion of Ukraine.
In that case, the relevant Lessors relied on the concept of the 'grip of the peril' to contend that, even if the aircraft were not lost until after the expiry of cover, the operative peril had already taken hold during the policy period.
As we reported in our previous blog post on the judgment, Mr Justice Butcher found in favour of the Lessors, making several important findings:
- A policy covering 'loss occurring during' the policy period does not oust the application of the 'grip of the peril' principle.
- On a proper construction of the policies, there is no difference in treatment between (a) a loss where physical damage during the period later develops into a total loss after expiry, and (b) a loss where a deprivation during the period later becomes permanent after expiry.
- That the 'grip of the peril' principles naturally apply to situations of deprivation of possession. Where property was damaged during the policy period and that damage continued to develop after the policy period, the circumstances would be governed by the 'death blow' principle which had long been recognised in marine insurance and has most recently been the subject of consideration by the Court of Appeal in Sky UK Ltd & Anor v Riverstone Managing Agency Ltd & Ors [2023] EWHC 1207 (Comm). HSF Kramer successfully represented Sky and our blog post on the Court of Appeal judgment can be found here.
Commenting on the Notices of Review specifically, Mr Justice Butcher held that:
....I do not consider that the terms of the Notices of Review in the present case are sufficient to prevent or oust the application of 'death's blow' or 'grip of the peril' principles. The effect of the Notices of Review was to accelerate the date at which the WR Cover expired for Russia from the date originally agreed as the end of the period of insurance to the date and time when the Notices of Review took effect. They did not alter the scope of any cover provided for losses eventuating post expiry. In other words, if the insuring clause admitted of 'death's blow' or 'grip of the peril' principles at the end of the policy term, the early expiry of cover in respect of Russia would have admitted of the application of the same principles, and simply brought forward the relevant date for the application of those principles.
Applying the above analysis, the Court held that there were operative restraints or detentions on all relevant aircraft and engines from 5 March 2022 by reason of a message given by the Russian Federal Air Transport Agency (FATA). The assets were, from this point, in the grip of a War Risks peril and the subsequent losses of the aircraft were a direct continuation of that peril. The Lessors were therefore entitled to an indemnity under the War Risks Cover, notwithstanding that the losses crystallised after the effective dates of the Notices of Review.
Necessary authority
A particular issue which arose in the Genesis claim considered by Mr Justice Butcher was whether TMK Syndicate 510 had authority to issue an Endorsement which excluded Russia, on behalf of the entire market. This issue turned on the terms of the Subscription Agreement in the Genesis WR slip.
Mr Justice Butcher concluded that TMK 510 did not have authority to issue the Endorsement on behalf of all subscribing WR Insurers, and therefore so far as those underwriters were concerned, the Genesis policy did not exclude Russia or Belarus.
Key lessons
Any Notices which seek to cancel or amend the geographical limits of your insurance cover should be scrutinised carefully with the assistance of your brokers to ensure they comply with relevant terms of the policy.
In particular:
- In a claim scenario, consider whether the notices take effect before or after any assets were in 'the grip of the peril'.
- Where one Insurer is purporting to cancel cover on behalf of the entire market, consider with your broker whether they have the authority to do so.
If you are a policyholder faced with these sorts of issues, our team would be glad to discuss.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
