The marine war risk market was the first to move. Within hours of the United States and Israel launching coordinated strikes on Iran on February 28, P&I clubs issued notices of cancellation for the Persian Gulf. War-risk premiums for vessels attempting the Hormuz transit surged in some cases twelve-fold. A US$20 billion government-backed reinsurance facility was assembled, with Chubb named as lead underwriter, in an effort to restore market confidence and get oil tankers moving again.

That is the story most insurance professionals have been following. It is not the whole story.

Beneath the headline disruption to marine and energy lines, the Iran war is generating a second, quieter crisis - one defined not by losses that are clearly covered, but by losses that fall precisely in the gaps between policy wordings. Business interruption triggers that require physical damage. Cyber exclusions that nobody can apply with certainty. Travel policies that left a million stranded passengers with nothing. Trade credit exposures that most commercial clients never thought to buy.

For brokers and underwriters who have spent recent years pricing geopolitical risk as a tail event, the tail has arrived. The question now is how many of their clients are actually covered for it.

The cyber problem nobody can solve

Of all the non-obvious consequences of the war, the cyber coverage question may be the most consequential - and the least tractable.

Iran has a long-documented history of state-affiliated cyber operations, and the outbreak of hostilities has prompted warnings across Western governments about the risk of retaliatory attacks on critical infrastructure, financial institutions and major corporations. Demand for cyber insurance has surged in response.

The problem is that many cyber policies include wartime or force majeure exclusions that could render claims invalid if an attack can be attributed to state-sponsored actors. Whether a given attack is genuinely state-directed, as opposed to conducted by Iranian-linked actors without formal government sanction, is a forensic question that may take months or years to answer - long after the policy response window has closed.

The Lloyd's market alone has 48 approved cyber exclusion wordings, each drafted differently. The result, as policyholder disputes lawyers have noted, is a chaotic coverage picture in the event of widespread attacks. The mechanism by which a policyholder would even begin to establish attribution has never been tested in practice.

For brokers, the practical implication is urgent. Every commercial client carrying a cyber policy should have its war exclusion wording reviewed now - before any claim arises - to understand what standard of evidence would be required to establish or rebut a state-sponsored attribution, and whether that standard is achievable.

Twenty-one thousand flights, and most passengers had nothing

The aviation disruption that followed the February 28 strikes was immediate and staggering in scale. Airspace closed across large parts of the Middle East within hours. Dubai and Doha - ranked first and tenth in the world for international passenger traffic - became effectively inoperable as transit hubs. More than 21,000 flights were cancelled in the days that followed, stranding tens of thousands of travellers across multiple continents.

Demand for "cancel for any reason" travel insurance surged eighteen-fold in the days following the strikes, according to data from online insurance marketplace Squaremouth.

The surge was too late to matter for most of those affected. Standard travel insurance policies exclude coverage for disruptions tied to acts of war and military action - a provision that is longstanding, widely understood within the industry, and almost entirely unknown to ordinary consumers until the moment it becomes relevant. Cancel for any reason coverage must in most cases be purchased within 14 to 21 days of an initial trip deposit. Once a military action has become a known event, it cannot be insured against retrospectively.

The result was a consumer protection failure of significant scale. Airlines were legally obligated to offer refunds for cancelled flights, and many offered flexible rebooking terms. But for the broader costs of disruption - hotels, missed connections, stranded cruise passengers, non-refundable land arrangements - the insurance mechanism that consumers believed existed simply was not there.

The travel insurance market's challenge going forward is partly one of product design and partly one of disclosure. Neither is straightforward.

The business interruption gap

For commercial lines, the dominant coverage question is not marine - it is business interruption, and specifically the growing volume of losses that do not meet standard policy triggers.

When Maersk suspended Hormuz transits on March 1 and began rerouting vessels around the Cape of Good Hope, the additional cost per ship was approximately US$1 million in fuel, plus 10 to 14 additional days of transit time. For cargo owners with time-sensitive supply chains, missed delivery windows, spoiled perishables and breach-of-contract penalties, the financial damage is real and substantial.

Most of it is not insured.

Standard business interruption policies require physical loss or damage as a trigger. A rerouted voyage that arrives late but delivers undamaged cargo is, in policy terms, a pure delay - and pure delay falls outside cover. The same applies to precautionary shutdowns of energy infrastructure across the Gulf states, where companies have paused operations not because of a physical strike but because of proximity to conflict. The business interruption exposure from such shutdowns can be enormous. The coverage, in many cases, is not.

Legal analysis from Pillsbury Law characterised the issue plainly: losses from physical damage, denial of access, seizure and detention, sanctions and pure delay all require different policy responses, and many policyholders have yet to map their actual disruptions to the relevant coverage categories - much less identify the gaps.

Trade credit: the line nobody was watching

Before the war, trade credit insurance was one of the quieter corners of the specialty market. Claims were manageable, pricing was stable, and the line had absorbed recent geopolitical shocks - the Red Sea disruptions, the Russia-Ukraine war's effects on commodity flows - without significant systemic stress.

The Hormuz closure is different in scale. The strait carries approximately 20% of global oil flows and a significant share of LNG. Prolonged disruption is beginning to create default risk up and down supply chains as payment terms are missed, contracts are frustrated, and counterparties face liquidity pressure from rising energy costs.

Howden Re's head of global specialty treaty, Phil Bonner, described the situation as one in which what was previously a stable, dependable line is now moving firmly into strategic focus, as insurers and reinsurers reassess counterparty exposure and supply chain dependencies.

The most significant gap is not among large multinationals, which typically carry trade credit cover as part of sophisticated risk programmes. It is among mid-market commercial clients for whom trade credit insurance has rarely been on the broker agenda - and who are now discovering that their receivables are exposed in ways they had not considered.

The attribution of war and terrorism

Across multiple lines - marine, property, political violence, aviation - the same definitional problem keeps surfacing. In fast-moving geopolitical conflicts, the boundary between war, terrorism, sabotage and cyber incident becomes contested territory, and that contest is fought in policy language.

Legal analysis from Mills & Reeve noted that many insureds in the Gulf had purchased only terrorism or lower-level civil unrest coverage, leaving them potentially uninsured for war-related losses. The political violence policies that were meant to fill the gap left by standard property war exclusions do not necessarily dovetail cleanly with those exclusions - particularly where the specific peril purchased does not match the cause of loss.

Morningstar DBRS, in a commentary on the war's insurance implications, noted that terrorism and political violence incidents can trigger claims simultaneously in property, marine, aviation and business interruption policies - and that distinguishing between terrorism, sabotage, cyber incidents and acts of war may become increasingly difficult, increasing the potential for coverage disputes.

Those disputes are not theoretical. They are already beginning.

The GPS spoofing problem

There is one further consequence of the conflict that has received almost no attention outside specialist underwriting circles, but which has the potential to generate significant coverage disputes.

In the period before the February 28 strikes, there had been a series of GPS spoofing incidents in the region - deliberate manipulation of navigational signals that caused vessels to lose accurate positioning data, contributing to collision and grounding risk. Similar spoofing has been documented in the Baltic and Black Seas in connection with the Russia-Ukraine conflict.

A physical grounding or collision resulting from GPS spoofing sits in genuinely contested territory between a war peril, a cyber peril and a conventional hull claim. Insurers across those three lines are not aligned on which policy responds, and the wording analysis required to answer the question in any given case is both complex and likely to be disputed.

As the conflict continues, the volume of such edge cases will only grow. The marine and cyber markets have not yet had to adjudicate a major GPS spoofing claim under war conditions. The analytical frameworks for doing so are not established.

What brokers should be doing now

The common thread running through each of these coverage questions is the same: the losses are real, the damage is happening, and the standard policy architecture was not designed for the specific shape of this conflict.

Legal and insurance analysts have begun to outline what a practical response looks like. Every business interruption programme should be mapped against its actual triggers to identify where delay-only losses will fall outside cover. Every cyber policy should be reviewed for the precise wording of its war and state-sponsored exclusions, and clients should understand what attribution evidence would be required to invoke or resist those exclusions. Every commercial client with Gulf supply chain exposure should be asked whether they carry trade credit cover - and if not, whether they understand what is now at risk.

The broader market question - whether the insurance industry's product architecture is adequate to a world in which geopolitical conflict generates losses that are diffuse, correlated, and definitionally ambiguous - is one that will take years to answer through policy reform and litigation.

The claims, however, are not waiting.