What necessitates Marine Insurance for Piracy Attacks
Let us look at the factors that highlight the importance of this insurance:
- Marine insurance has historically and theoretically been intended to cover all maritime risks for which the insured purchases this policy. Typically, marine insurance does cover piracy attacks as one of its perils.
- It is crucial for shippers to protect themselves against piracy to recover lost or stolen property. Generally, the goods in transit are in bulk which makes the cost of consignment very high.
- To get protection against piracy in transit, coverage against warehouse hazards or attacks, and similar risks.
- There has been an alarming increase in pirate activities endangering people's lives and property. Insurance companies have developed the concept of piracy risk management to boost the confidence of ship owners and enhance the protection of costly vessels.
- The purpose of including piracy in hull and cargo claims is to stop specific trade routes from being hampered by things like savage actions by pirates.
Benefits of Marine Insurance for Piracy Attacks:
Below mentioned are some of the benefits of having this insurance:
- The flexibility of this insurance allows for more accurate underwriting of the amount of risk and coverage.
- Marine Insurance policies are usually paid per transit, and underwriters frequently add an extra premium for travel through risky locations. So, if a particular transit is for a piracy-prone area, only the shipper would be charged an extra premium.
- If the transit route includes a higher chance of piracy attack, this insurance can reduce the chances of ambiguity and uncertainty for the customer and the insurance company since necessary steps are already taken.
- This offers the ideal balance of coverage for both war and piracy attacks.
Shipping Transport Co. had opted for marine insurance for piracy attacks for transporting luxury items from India to America. The consignment value was between INR 10 to 15 crores. In transit, the vessel was attacked by a troop of pirates. In the conflict, the pirates looted the cargo and more than INR 5 crores were robbed.
Upon reaching the destination, the insurance company was informed about the incident. All the required documents were submitted and details were provided to proceed with the claim. The insurer appointed the surveyor and other parties to investigate and submit the report of their findings. On submission of the report by concerned parties, the ship owner was compensated for losses.
Insurance companies, both online and offline, offer marine insurance. Various factors, including the ship's type, size, and intended use as well as the owner's recent insurance history, affect the insurance premium. Be aware that some insurance policies have restrictions on what they cover and don't, as well as other clauses which require the insured to pay a certain amount. A ship owner must consider buying marine insurance for piracy attacks for safeguarding against pirate attacks.