The menace of pirates have been associated with the maritime industry, may be since from the inception of marine trade in the ancient times. With the increase of international trade which is mainly dependent on maritime industry the threat of pirates has increased proportionally. Of late the terror of Somalia pirates has reignited the turbulence as their area of operation encompasses the busiest and the most strategic naval trade routes.
This increase in the rate of pirate attacks has raised alarm all over the world and in turn has increased the cost of marine insurance. Piracy involves armed assault and looting of ships. Most often it also involves kidnapping crew for ransom and also in certain cases the whole ship in completely destroyed.
One of the major marine insurance that is being sought after is ship piracy insurance. This type of insurance provides for hull coverage and cargo coverage. This is not all. Many maritime insurance companies also provide insurance for the ship crew.
Hull coverage aims at providing insurance for damage to the ship body resulting from pirate attack. This kind of insurance is obtained by ship owning companies. According to the definition of “pirates” provided by marine insurance companies any person who invades a ship intending to steal and damage it is termed as ‘pirate’.
Most maritime companies prefer to buy the ‘Loss of Hire’ insurance coverage in order to be ensured about the earning capability of the ship.
Many marine insurance companies provide general ship insurance and a separate specialized insurance for the hull of the ship.
Cargo coverage provides insurance in case of cargo loss form pirate attack on the ship. This kind of insurance coverage is obtained by the company or individual in charge of arranging for the transportation of the goods overseas. One common policy that is obtained is the war risk policy that provides insurance for the shipped cargo that enters war zones or internationally recognized pirate infested areas.
Hull insurance and cargo insurance both are specialized kind of insurance and need extensive study before obtaining one so as to get the maximum possible coverage in case of any pirate attack or any other unfortunate mishaps that might befall the ship.