Following the recent intensification of hostilities between Israel and Hamas in Gaza, the Iran-backed Yemeni Houthis have been attacking vessels in the Red Sea and Gulf of Aden. In response to a large number of requests from members we have produced this guidance on the insurance and legal aspects of the situation.P&I coverPoolable P&I cover for a mutual owner member is not prejudiced solely by a decision to continue a voyage through the Red Sea. The additional risks created by the hostilities and attacks will likely fall to war risk insurance. If the primary layer of this cover is not placed with the Club, it is important that Members speak to their war risks underwriters. War risks are discussed below.A decision to re-route a vessel to avoid the Red Sea may have serious P&I implications as this may be considered an unjustified deviation, which potentially engages an exclusion to cover. Members should discuss any plan to deviate from the most usual customary or geographical route with the Club at the first opportunity. The impact on cover – and, in particular, whether special insurance needs to be arranged – will be assessed on a case-by-case basis.Members who are planning to undertake a new voyage through the Red Sea may wish to consider including an appropriate liberty provision in their contract of carriage entitling them to re-route to avoid the area.Charterparty issuesWe are seeing a number of FD&D issues arising from the hostilities and attacks in the Red Sea / Gulf of Aden, both for our Owner and Charterer Members, including whether Owners can refuse Charterers’ instructions to proceed via the Red Sea / Gulf of Aden / Suez Canal, and whether Charterers can place the vessel off-hire and/or claim in damages if Owners decide to deviate the vessel via an alternative route.The situation is fast evolving and unpredictable. Our Members will need to consider each potential dispute as it arises and on its own merits, looking at the context including charterparty terms, vessel ownership and trading pattern, and carefully assess security risks at the relevant time, along with commercial considerations.Every charterparty should be reviewed carefully to determine Owners’ and Charterers’ rights and responsibilities when “war risks” arise. Since clauses are often bespoke or amended it is impossible to provide a “one size fits all” answer to the main issues that are arising. However, we commonly see BIMCO’s CONWARTIME and VOYWAR clauses incorporated into time and voyage charterparties respectively.War Risks include any “actual, threatened or reported: war, act of war, civil war or hostilities…civil commotion…warlike operations…acts of hostility or malicious damage…by any person, body, terrorist or political group, or the government of any state or territory whether recognised or not”.Under CONWARTIME 2013, Owners can refuse Charterers’ orders to transit a port, place, area or zone, or any waterway or canal (collectively, an “area”), if to do so may, in the reasonable judgment of the Master and/or the Owners, expose the vessel, cargo, crew or other persons on board the vessel to War Risks.Under VOYWAR 2013, prior to commencement of loading of cargo, Owners may cancel the charterparty or refuse to perform if to do so may, in the reasonable judgment of the Master and/or the Owners, expose the Vessel, cargo, crew or other persons on board the Vessel to War Risks. Owners must first allow the Charterers an opportunity to nominate an alternative safe