As the situation in the Strait of Hormuz remained uncertain insurers have told vessels if they pay a toll to transit the strait it will nullify their coverage.

The news came as the United States ceased attacks in Iran as the Oman government continued talks with Iran over a deal to re-open the vital strait through which 20% of the world’s oil and gas passes annually.

This week saw Iran reaffirm its commitment to keep the strait closed to all but vessels which engage with authorities.

Iran’s Foreign Ministry spokesperson, Esmail Baghaei, said told the media that the Strait of Hormuz’s status remains unchanged, despite the talks.

Baghaei said the talks had made progress. They took place after Tehran asserted that its interim deal with the US allows it to manage shipping in the strait for now and objected to US efforts to support a route through the strait that passes close to Oman instead. The strait was considered an international waterway before the war.

The U.S. military on Saturday said its recently reimposed naval blockade against Iran continued, with a dozen commercial ships redirected, two disabled and two boarded. U.S. forces “remain highly vigilant, focused, lethal, and ready,” it added.

As the situation remained fluid the Lloyd’s Market Association (LMA) published a new model clause for use by marine hull underwriters, addressing the position of transit fee, toll or other payments made in connection with vessels passing through the Strait of Hormuz.

The clause has been developed to provide clarity to the market on the insurance position where it has been confirmed that a payment (including financial or other forms of payment) has been made to enable a vessel to pass through Iranian territorial waters or otherwise transit the Strait.

The LMA said it had developed the clause in response to concerns about applicable sanctions and terrorism legislation arising where insurers become aware, or through appropriate due diligence ought reasonably to become aware, that any financial or non-financial payment has been given by the insured. It is intended to operate alongside existing sanctions clauses.

Under the clause, insurers will not cover any such payment. In addition, where a payment has been made, cover for the relevant vessel will cease due to the risk of a breach of sanctions and/or terrorism legislation in the US, UK or EU.

Arabella Ramage, legal and regulatory director at the LMA, explained: “The clause and guidance have been developed to support the market in navigating a complex and evolving legal and regulatory environment.

“It provides a clear contractual position for insurers and insureds where transit payments, including non-financial payments, are given in connection with passage through the Strait of Hormuz. The clause and guidance align with existing sanctions and terrorism frameworks, while also evidencing the insurer’s due diligence and compliance.”