Israel Restarts State-Backed Cargo Insurance Against War and Terror Risks from September 1

Starting September 1, 2026, the Israeli government will resume providing insurance coverage for cargo shipments against war and terror risks. The Ministry of Finance and the Tax Authority announced the reinstatement of this program, which operates through the Tax Authority's Compensation Fund. It aims to support importers and exporters in continuing trade despite challenges faced by commercial insurers unwilling or unable to cover heightened security risks.

Previously active until mid-June, the program insured cargo for dozens of importers and exporters with coverage exceeding one billion dollars. The decision to reactivate the scheme followed appeals from the business sector and importers’ associations concerned about insufficient private insurance availability amid ongoing security threats and expected market pressures.

Cargo insurance is critical in international trade, protecting shipments not only from common hazards like accidents or theft but also from war and terror-related damages, which have increasingly affected Israel. Commercial insurance policies often exclude these risks or become prohibitively expensive during escalations, leading to potential disruptions in supply chains. Without adequate coverage, importers might reduce orders or demand higher risk premiums, while shipping and aviation companies could scale back operations, ultimately raising product costs and complicating exporters’ ability to serve foreign customers.

The government’s program acts as a "last resort insurer," absorbing risks that private markets cannot handle, thereby ensuring supply chain continuity and the flow of essential goods during uncertain security conditions. Michal Abadi-Boiangiu, the Accountant General, described the initiative as a "national protection layer," while Tax Authority Director Shai Aharonovitch emphasized its role as an anchor when commercial insurers avoid exposure to these risks.