The Danish government has unveiled plans to establish a state-backed US$1 billion war risk insurance programme for the shipping sector, intended as a safeguard in case commercial insurance markets become unavailable.

Describing the proposal as a “timely precaution,” the government plans to present the initiative to parliament for a vote later this year.

“There are global tensions and war on European soil,” said Denmark’s Business Minister Morten Bodskov. “It’s essential that we are prepared—even for the worst-case scenarios.”

Anne Steffensen, CEO of Danish Shipping, the national shipowners’ association, commented: “The timing is exactly right for the activation of the War Insurance Institute. It’s always wise to be well insured. And of course, the shipping companies are covered through the regular commercial market. But in an extraordinary war scenario, it can be critically important that the Danish merchant fleet is still able to operate. This proposal contributes to securing that possibility if Danish shipping can no longer be covered by commercial insurance. And like with all other insurance schemes, I sincerely hope we never have to use it.”