In light of ongoing and active hostilities in Iran and the surrounding region since February 28, 2026, owners, operators and charterers and traders of vessels operating in and around the Strait of Hormuz should be aware of the following developments: <\/p>\n
Major insurers have issued notices of cancellation with respect to war risk insurance coverage for vessels in the region: Beginning March 1, 2026, a number of major industry insurers have issued notices of cancellation with respect to war risk insurance coverage for vessels traveling through the Persian Gulf, Gulf of Oman and Strait of Hormuz. Background on the DFC and budgetary considerations<\/p>\n The DFC is a wholly owned US government corporation established under the Better Utilization of Investments Leading to Development Act<\/a> of 2018 (BUILD Act<\/a>). The stated purpose of the BUILD Act was to consolidate the functions of the Overseas Private Investment Corporation<\/a> (OPIC<\/a>) and the Development Credit Authority of the US Agency for International Development (USAID) into a single federal agency. Through the consolidation of OPIC and USAID, the DFC serves as the US’ primary development finance institution, facilitating investment in foreign markets to support US foreign policy objectives. <\/p>\n The Board of Directors is composed of both government and non-government members including a Chief Executive Officer, appointed by the President with the advice and consent of the Senate. The eight currently sitting members of the Board of Directors for the DFC are as follows:\u00a0 <\/p>\n Ben Black<\/a>, Chief Executive Officer The Board is responsible for setting DFC policy, implementing statutory requirements and advancing executive priorities, particularly with respect to the President\u2019s foreign affairs powers under Article II of the US Constitution. <\/p>\n Pursuant to the BUILD Act, the DFC is authorized to provide direct loans, loan guarantees, equity investments and insurance, with such insurance backed by the full faith and credit of the US government. With respect to insurance, the BUILD Act broadly authorizes the DFC to \u201cissue insurance or reinsurance, upon such terms and conditions as the [DFC] may determine, to private sector entities and qualifying sovereign entities assuring protection of their investments in whole or in part against any or all political risks such as currency inconvertibility and transfer restrictions, expropriation, war, terrorism, civil disturbance, breach of contract, or non-honoring of financial obligations.\u201d<\/p>\n One consideration regarding the announced insurance program is budgetary constraints, as all DFC-backed projects must be evaluated by the DFC for \u201ceconomic and financial soundness and development objectives\u201d and the DFC must notify certain congressional committees regarding any financial commitment exceeding US$100 million (though congressional approval is notably not required).2<\/a>\u00a0More significantly, as the DFC must operate within DFC\u2019s congressionally approved maximum contingent liability, which is currently US$250 billion through 2031.\u00a0Industry commentators have observed that such fiscal constraints may materially affect the scale of coverage the DFC is able to provide. <\/p>\n President Trump orders DFC to insure maritime trade in affected areas<\/p>\n On March 3, 2026, President Trump announced that he had ordered the DFC<\/a> to provide \u201cpolitical risk insurance and guarantees\u201d for maritime trade traveling through \u201cthe Gulf,\u201d although the announcement did not precisely specify which areas \u201cthe Gulf\u201d is referring to. On the same day, the DFC put out a media release<\/a> noting it was \u201cready to mobilize its Political Risk Insurance and Guaranty products\u201d in accordance with these orders. <\/p>\n
\n President Trump has ordered the United States International Development Finance Corporation<\/a> (DFC<\/a>) to make insurance available to protect affected maritime trade: In response to the above notices, President Trump announced via a Truth Social post<\/a> on March 3, 2026, that he had ordered the DFC<\/a>, which describes itself as the \u201cinternational investment arm of the US government,\u201d to provide \u201cpolitical risk insurance and guarantees\u201d for maritime trade traveling through \u201cthe Gulf.\u201d
\n DFC has announced plan to provide insurance covering losses of up to US$20 billion: On March 6, 2026, the DFC announced a US$20 billion plan<\/a> \u201cto deploy Maritime Reinsurance, including war risk, in the Gulf region,\u201d noting that businesses and financial institutions seeking to access the DFC’s Insurance and Guaranty products should contact the DFC directly at maritime@dfc.gov<\/a>. On March 11, 2026, the DFC also announced that they had chosen the lead insurance partner for the Maritime Reinsurance plan. <\/p>\n
\n Marco Rubio<\/a>, Secretary of State, US Department of State
\n Eric Ueland<\/a>, PTDO Administrator, US Agency for International Development
\n Scott Bessent<\/a>, Secretary of the Treasury, US Department of the Treasury
\n Howard Lutnick<\/a>, Secretary of Commerce, US Department of Commerce
\n Irving W. Bailey II<\/a>, Senior Advisor, Chrysalis Ventures
\n Christopher P. Vincze<\/a>, Chairman and CEO, TRC Companies, Inc.
\n Deven Parekh<\/a>, Managing Director, Insight Partners<\/p>\n