Charterers Piracy Trade Disruption Insurance
Tagged: charterer, insurers, kidnap & ransom, piracy, risk, specialist, trade, trade disruption
In response to the dramatic increase in piracy, Charterers’ are able to purchase insurance that covers any payments they are still liable for in the event of a vessel being captured.
Minimising the Risks for Charterers
Avoiding the area entirely will limit a vessel’s exposure to the risk of piracy although, as in the high profile case of the Sirius Star, it is not always successful. Sirius Star had chosen to sail via the Cape of Good Hope, but was still captured by Somali pirates over 450 nautical miles off the coast of Kenya.
Moreover, significant deviations are a costly and time consuming alternative for Charterers, who pay hire costs for the additional time taken to sail past the Cape.
In the event of a hijacking, the vessel could remain on hire for the duration of the detention with any off-hire likely to lead to a dispute. The average period for vessels to be detained is six to seven weeks, so the Charterers’ exposure to hire charges whilst the vessel is detained is significant.
Charterer’s Piracy Trade Disruption Insurance ensures that if a vessel is captured and the Charterer remains liable for the hire, the Charterer is covered for that payment whilst the vessel is seized.
The Cover
Importantly, the cover is available on both a single breach and annual basis. This allows Charterers to declare vessels for the specific period, whilst transiting or calling at ports in high risk areas.
The premium is based upon the limit of liability required, the number of calls or transits and voyages contemplated and is fully supported by ‘A’ rated London insurers with a proven track record in specialist marine insurance.
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The above information is intended solely as a summary of the cover – for full details regarding the conditions of cover, exclusions and definitions, please email or telephone your usual FP Marine Risks contact or call the Hong Kong office on +852 2544 3410, the London office on +44 (0) 207 397 4920 or email info@fp‐marine.com
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