Kai Risdell

Desk for us today.

Ships can technically move without insurance.

They just can't go anywhere.

Rahul Kapoor is vice president and global head of shipping and metals with S&P Global Energy.

Bad things happen to ships like this Carnival Cruise ship that hit another Carnival Cruise ship in Mexico six years ago.

No major injuries there.

No port in its right mind would let a ship that doesn't have liability insurance pull up.

But ships also need to insure themselves.

Small issue, none of them apply in a war.

Brandon Holmes is VP Senior Credit Officer at Moody's Ratings.

So ships have to get war insurance.

But one more small issue, the war insurance gets canceled if there's a war.

Not immediately, but like pretty fast.

So there's this organization in London called the Joint War Committee.

It's a bunch of insurance companies, and they decide when an area or region is suddenly high risk.

And when they decide that, insurance companies can cancel and reprice their plans, and the clock on those policies starts to run out.

This system lets insurers offer cheap war insurance in case a war breaks out.

But then once a war zone is war zoning, they can create special expensive insurance for if you want to go in there on purpose.

Of course, in the Iran war, small issue, the ships can't just zip out of the way.

They are literally stuck.