Insurers protected because there has been no official declaration of war
Insurers will be able to contest political risk claims in Libya because there has been no official declaration of war, Lloyd’s broker RFIB says.
Lloyd’s broker RFIB’s Middle East director Anthony Harris says: “Those who have (re)insured Libyan facilities will be able to contest any claims that are made on the grounds that this is a war situation.
“…..This is because we haven’t declared war on Libya but we are claiming under the 1973 UN Security Council Resolution that we have full legal backing to attack Libyan targets in pursuit of the aims of the resolution, which is to protect civilians.
“The fact we are destroying Libyan targets is an act of war but this would be excluded from claims.”
However, Firas Abi Ali, a Gulf expert with risk group Exclusive Analysis said insurers face claims due to disrupted oil supplies.
“We’re probably going to see Libya’s oil production declining and that means some of the contracts for oil delivery and for the timely delivery will be frustrated.”
Harris believes the keenness of insurers to work within the region following improved relations with the UK in recent years has led to more insurers placing themselves at risk.
“Libya has been emerging in recent years and insurers have been trying to get their hands on assets. That has begun to happen in the construction and energy fields but I imagine everything has been put on hold now," he said.