There will be no cancellation of insurance cover over the next 48 hours. The war risk committee of Lloyds, the syndicate that sets premiums, on Friday advised insurance companies not to cancel the war-risk cover for the next 48 hours. It said the advisory was issued to avoid panic in war-hit regions where ships were moving.

Officials at both private and state-owned insurance companies said no cancellation notices had been issued in the overseas reinsurance market.

Also, no Indian corporate had received any cancellation of war-risk cover, they said, adding that business continued at a higher price.

"There will be no cancellation as long as there is support from the international reinsurance market," said an official with a private sector insurer.

Industry sources said the  Lloyds decision implied that the West intended to stand by the corporate world despite the war against Iraq.

Global airlines, shipping operators and exporters have been given respite till Monday to continue their operations in war-sensitive zones, on condition that the risk cover is available and affordable.

The War Risks Rating Committee at Lloyds had advised insurance companies on Tuesday to incorporate a 48-hour cancellation clause on risk cover granted to cargo moving in war-sensitive regions along the African coast and West Asia.

"Indian vessels continue to operate in the war zone, but have to pay a higher risk premium. The premium has shot up significantly from 0.05 per cent of the value of the cargo to 2 per cent," said an official at a private shipping company, whose vessels are moving in the war zone.

Ships bound for Africa and the Persian Gulf are facing massive hikes in war premiums. Lloyds has left it to insurance companies to decide on the war risk rates.