U.S. DOT EXTENDS INSURANCE COVER FOR SHIPS IN THE MIDDLE EAST

U.S. DOT EXTENDS INSURANCE COVER FOR SHIPS IN THE MIDDLE EAST    The U.S. Department of Transportation has approved an extension of the authority to provide war risk insurance under Section 1202 of the 1936 Merchant Marine Act until December for ships entering the Middle East.
   “This insurance or reinsurance of vessels is available for vessels (including cargoes and crew) entering the Middle East region, whenever commercial insurance cannot be obtained on reasonable terms and conditions,” the U.S. Maritime Administration said, commenting on the announcement.
   Unlike Section 1205 insurance, which is provided to the U.S. Department of Defense on vessels chartered to them at no premium and with a full indemnity, Section 1202 insurance is underwritten by the Department of Transportation in return for a premium from shipowners.
   MarAd said that Section 1202 authority was used “very judiciously and sparingly” during the previous Gulf war, and it believes the renewed insurance authority will continue be used in the same manner.
   President George W. Bush approved the provision of war risk insurance in December 2001. The U.S. Secretary of Transportation has now approved the extension for an additional one-year period, until Dec. 12, 2003.