COMMERCIAL - Modern pirates call for modern measures

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Allianz Australia answers questions on the effect of piracy and marine insurance policies

COMMERCIAL - Modern pirates call for modern measures
COMMERCIAL - Modern pirates call for modern measures

What happens if pirates hijack a boat to extort a ransom? Or, what happens if a voyage is terminated due to an act of war?

These are some of the questions that insurance company Allianz said are answered in the Allianz Global Corporate and Specialty’s (AGCS) most recent report Protection against Piracy, which responds to brokers’ frequently asked questions on how marine insurance policies respond to piracy.

AGCS in Australia said it released the report as a follow-up to the recent AGCS study Piracy: An ancient risk with modern faces. Allianz said the report will be available as a reference tool for brokers to use when discussing with their clients the exposure piracy might create for their business and what protection marine insurance policies may offer.

The insurance company said that recent events in one of the world’s busiest shipping channels off the coast of Somalia through the Suez Canal and Gulf of Aden demonstrate that the ancient risk of seaborne piracy against transport vessels continues to be a significant concern for international trade today, albeit with a new focus.

General Manager for AGCS Pacific, Stefan Feldmann said: "Pirates have been around for as long as people have used the sea as trade routes.

"Recent events in one of the world’s busiest shipping channels off the coast of Somalia through the Suez Canal and the Gulf of Aden, illustrates that seaborne piracy against transport vessels continues to be a significant concern for international trade today.

"It is often difficult to stay abreast of insurance policies covering piracy. The Report was developed to create awareness around technical content on what an act of piracy is, and some of the salient clauses in the standard marine insurance wordings in use that could apply to acts of piracy," said Feldmann.

Allianz said included in the report are details on how marine insurance clauses may respond to piratical acts. Some of the key areas covered include:
* What happens if the voyage is terminated due to an act of war and cargo is discharged at an unintended foreign port?
* What happens if the ship or cargo is captured, seized, arrested or detained as an act of war?
* Can the Insured claim for loss of the Interest when it is unable to gain access to it even though the Interest is known not to have been damaged or destroyed?
* What happens if the act is carried out by a group who is politically or religiously inspired?
* What happens if the ‘so called’ pirates are hijacking the Interests to extort a ransom?

Allianz said the Report will assist brokers to understand how their clients’ marine insurance policies may respond to such events.

The insurance company said total cost of piracy on the global economy has been estimated to be between $US13 and $US16 billion each year (source www.heritage.org/Research/AsiaandthePacific/BG1379.cfm?renderforprint=1).

Allianz Australia offers boat insurance through its agent Club Marine, one of Australia’s largest insurance agencies specialising in pleasure and commercial leisure craft.


 


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