New 2027 Version of the Nordic Marine Insurance Plan

The Nordic Plan, Version 2027

The Nordic Marine Insurance Plan 2013 and its predecessors have for more than 150 years shaped how ships are insured. Its roots go back to the first Plan of 1871. It is negotiated jointly by insurers, represented by Cefor (the Nordic Association of Marine Insurers), and the shipowners’ associations of Denmark, Finland, Norway and Sweden. It is kept current by a permanent Standing Revision Committee. The result is a rare thing in marine insurance: one coordinated set of terms that covers all standard insurances shipowners buy apart from P&I, read alongside an authoritative Commentary.

On 1 October 2026 the parties published Version 2027, the latest step in that tradition. It includes updates to the introductory provisions, environmental and sustainability (ESG) considerations, hull and machinery, war risks, sanctions and Know Your Customer (KYC) checks. For international owners, insurers, financiers and their advisers, Version 2027 confirms the Plan as one of the most modern frameworks available for marine and offshore risk.

Clauses 1-4A, 1-4B and 1-4C: NOMA Arbitration Moves Centre Stage

One of the most visible changes in Version 2027 is a reorganised approach to dispute resolution. Previously, governing law and court jurisdiction sat together in one provision, Clause 1‑4A, with arbitration more as a separate optional clause. Version 2027 now sets out three distinct clauses:

• Clause 1‑4A - Governing law: This clause now deals only with which law governs the insurance contract. Separating law from forum means the parties know where they stand on applicable law whichever route they choose for disputes.

• Clause 1‑4B - Arbitration Clause: This clause provides for arbitration under the rules of the Nordic Offshore and Maritime Arbitration Association (NOMA) as default dispute resolution mechanism. It covers any dispute arising from the insurance contract, including disputes about its existence, breach, termination or validity. The language of the arbitration shall be English, unless the parties agree otherwise after the arbitration has commenced. Co-insurers agree to consolidate in the same arbitration when following a claims leader.

• Clause 1‑4C - Dispute resolution in the courts: This new clause governs disputes that go to national courts rather than arbitration. Courts and arbitration now appear as clearly separate options, only when agreed in writing between the parties. Otherwise, the default mechanism for dispute resolution is NOMA Arbitration.

The Plan first recognised arbitration in 2019, partly because many insurers already used it as their main way of resolving disputes. Arbitration is already the default where the claims leader is based outside the Nordic region. In that case the seat is Oslo unless the parties agree otherwise. Version 2027 builds on this by giving NOMA arbitration its own place in a clearer structure. This reflects its growing importance for the international market, and also the growing use of NOMA arbitration by the Nordic insurers.

International parties get a confidential, specialist forum. Its rules and guidelines were designed for maritime and offshore disputes and sit naturally alongside the Plan. Because governing law, arbitration and court proceedings now sit in separate clauses, it should be easier to tailor dispute resolution clauses and harder for disagreements about forum to arise. For international parties choosing their insurance terms, Version 2027 offers a dispute resolution package that is both proven and forward-looking.

ESG: A Stronger Focus on Sustainability

A key focus of this revision has been on sustainability, and the revision introduces amendments aimed at giving practical effect to sustainability, but still without changing the basic allocation of risk between insurer and assured.

• Clause 5-19 - Recycling of wrecks taken over by the insurer: Under Clause 5-19, an insurer that takes over the object insured for recycling or disposal must comply with the applicable ship recycling rules, and the assured must provide documentation such as the Inventory of Hazardous Materials.
• Clauses 12-12 and 16-9 - Increased CO2 incentive: Clause 12-12 on choice of repair yard provides for an incentive in the form of an extra maximum allowance (in addition to the 20% rule), which is applicable for repair alternatives requiring relatively shorter removal voyages with correspondingly lower emissions due to reduced fuel consumption. The 2027 version raises the CO2 allowance in tender comparisons from USD 40 to USD 90 per ton saved, further emphasising the need to factor in the emissions for the voyage to the repair yard in any repair decision. For loss of hire, Clause 16-9 aligns the tender calculation with the CO2 savings in Clause 12-12.
• Clauses 12-14 and 16-12 - Voluntary ESG-related work during casualty repairs: The most notable change is a new sub-clause 2 in Clause 12-14. When the assured carries out work to improve the vessel's ESG performance during a casualty repair period, that work shall not be included in the basis for apportioning common expenses. The work must be "voluntary and measurable, or otherwise demonstrable, improvements beyond statutory or classification requirements in force at the commencement of the repair period". It must also not be reasonably expected to become compulsory within the next twelve months. According to the Commentary, environmental work could include emissions reduction, efficiency improvements, pollution risk reduction and biodiversity protection. Social work could include measures that materially enhance safety and the crew's working and living conditions, while governance work could include advanced monitoring systems. The insurer's position is protected, because "all costs that arise exclusively from ESG-related work shall be borne by the assured". It follows from the Commentary that the insurer's liability for common expenses "shall not exceed the amount that would have been payable had the ESG-related work not been carried out". For loss of hire, Clause 16-12 has been amended in the same way, so that voluntary ESG-related work is also left out when common repair time is apportioned under the loss of hire insurance.

Clarifications of War Risks Insurance

Version 2027 of the Plan also includes clarifications to the war risks insurance. Our general experience is that the war risks cover provided by the Plan has been operational and worked well in connection with the recent wars and conflicts, including the "closure" of the Strait of Hormuz in 2026. However, there have been discussions in some cases where the clarifications that are provided in this Version will be helpful.

As to the war perils defined in Clause 2-9, the Commentary has been updated to reflect the Heroic Idun Arbitration Award of 2025. Thommessen has previously published a newsletter on this Award. This essentially means that the tribunal's interpretations of Clause 2-9 (1) (b) regarding foreign state interventions are accepted.

Foreign state interventions trigger the war risks cover if the intervention is motivated by an "overriding … political objective", which essentially means interventions typical for war or times of crisis. A detention resulting from law enforcement is not a war peril. The Commentary now includes guidelines taken from the Heroic Idun case. In summary, a war peril may exist, depending on the facts and evidence, where: (i) the detention serves a broader political objective, such as retaliation against the vessel's flag state; (ii) the intervention stems from unfounded suspicions of security-related violations; (iii) the intervention clearly exceeds what is necessary for law enforcement in the jurisdiction in question; or (iv) the intervention takes place during a war or times of crisis.

Additionally, in line with the Heroic Idun Award, the Commentary clarifies that the potential cover under the war risks insurance where the crew misjudge a war peril is limited to the "classic" war perils under Clause 2-9 (1) (a). For instance: a ship is sailing in a war zone and leaves the vessel under the misapprehension that there is an impending risk of war (ref. the "Solglimt Case" from 1921). However, this does not apply to any of the other war perils in Clause 2-9, such as piracy under letter (d). Put simply: perceived piracy is not a war peril.

In addition, we draw your attention to the following changes:

• Clause 15-11 - total loss: The new wording clarifies that total loss includes all cases where the assured has been "deprived of the use of the vessel" for at least 12 months, and broadens the war perils that may provide basis for total loss cover. Deprivation of the vessels that is caused by the "classic" war perils (Clause 2-9 (1) (a)), foreign state power interventions (Clause 2-9 (1) (b)) acts of terrorism, and certain other politically motivated use of violence or threats (Clause 2-9 (1) (c)) and piracy (Clause 2-9 (1) (d)) that results in a deprivation of the vessel may all provide basis for total loss cover under Clause 15-11.
• Clause 15-12 - blocking and trapping - total loss: The new wording clarifies that the blocking and trapping clause applies to all war perils pursuant to Clause 2-9, and that the vessel must be prevented from leaving for a "continuous period" of twelve months. The Commentary better explains what constitutes blocking: Both physical hindrances and non-physical hindrances where the threat level to the vessel is of a character that prevents the vessel from leaving, may qualify for total loss cover.
• New Clause 15-17 - redrafted loss of hire clause: All loss of hire cases are not regulated in one clause. The Plan now clarifies that the assured is entitled to loss of hire if the vessel is prevented from leaving a port or a similar limited area, not only due to a physical obstruction, but also when the vessel is prevented from leaving without a physical obstruction, as long as the prevention results from either the "classic" war perils in Clause 2-9 (1) (a) or foreign state interventions in Clause 2-9 (1) (b).
  
  Similar to total loss, if the threat level to the vessel is of a character that prevents the vessel from leaving, there may be basis for loss of hire, even if there is no physical obstruction as such.

These updated war risks clauses for total loss (Clause 15-12) and loss of hire (Clause 15-17) make it clearer to the reader that the present situation in the Persian Gulf may provide basis for war risks cover. However, as emphasised in the Commentary, the threat must be "imminent, concrete and specific", which requires an assessment on a vessel-by-vessel basis. Military threats against vessels passing a strait would normally satisfy the "prevented from leaving" condition. It is helpful that the Commentary provides clarity on this issue.

Sanctions and Know Your Customer (KYC)

Sanctions exposure has become a key concern for insurers, owners and financiers alike. Version 2027 strengthens the sanctions clause and introduces a new KYC clause.

Clause 2-17 - Sanctions limitation and termination

The Clause was introduced in Version 2016 and was slightly amended in Version 2023. It follows from the Commentary that the "obligation to ascertain the legality of the trade lies with the assured", who is expected to carry out "appropriate sanctions due diligence procedures prior to engaging in any trade or with any counterparty".

Sub-clause 1 remains largely unchanged. The insurer is not liable to the extent that cover, payment of a claim or any other benefit "may expose" it "and/or" its reinsurers to sanctions. It follows from the Commentary that a "benefit" may include return of premium, provision of a guarantee or assistance on a claim, and that "any sanction" is to be construed widely.

Previously sub-clause 2 provided that the insurer could terminate if "the subject-matter insured" had been engaged or was engaging "in any activity whatsoever" that may expose the insurer to sanctions. The trigger is now that "the provision of insurance cover has exposed or may expose the insurer or its reinsurers to the risk of any sanction". The focus has thus shifted from the vessel's activities to the insurance itself, and it is sufficient that there is a risk of sanctions. According to the Preface, the words "the risk of" were added "to correspond to reinsurance terms", and the Commentary describes this as a clarification of established practice rather than a material amendment.

The insurer is therefore not required to prove an actual breach. It follows from the Commentary that where due diligence reveals "red flags" or potential exposure, the insurer may take "pre-emptive action" without waiting for an actual breach to materialise. The Clause is, however, "not designed to withdraw cover arbitrarily", and any invocation is subject to an objective and reasonable assessment. Further, the insurer may now terminate with immediate effect with written notice replacing the previous 14 days' notice, which provided insufficient protection for the insurer.

New sub-clause 3 allows the assured to terminate with immediate effect by written notice where an insurer is "designated, listed or otherwise made subject to asset freeze or similar restrictive measures". It follows from the Commentary that this protects the assured against defaulting on other contracts, such as financing agreements.

Clause 2-18 - know your customer (kyc)

According to the Preface, this new clause was included "in response to the continuously increased requirements on insurers to carry out due diligence measures". It makes cover "subject to satisfactory identification and assessment of the customer and/or assured(s) as per the insurer's customer due diligence measures". It follows from the Commentary that the insurer determines what is "satisfactory", and that the Clause ensures the insurer can meet its legal obligations even where the contract is governed by a different law than the regulatory law applying to the insurer. The customer and/or assured must provide relevant information before inception and is under "a continuous obligation to promptly provide" such information during the insurance period. If requested additional information is not provided within 14 days, the insurer may terminate by giving 14 days' notice, or by a shorter notice period if required by law.

For international parties, the changes bring the Plan in line with the wider market's approach to sanctions and KYC requirements.

Read the Version 2027 here