Article
Anastasios Maraslis
Maritime Piracy, A Resurgent Business And Other Threats To Shipping Mr. Anastasios Maraslis, is Marasco Marine’s Ltd. President/Director piracy cost the global economy between USD 5 to USD 6 billion in 2012. Reports illustrate also the operational collaboration between militants and pirates. Maritime Piracy has increased especially over the last 20 years for economic reasons, as for pirates it is, or was, relatively easy pickings, and proved profitable, this being their main objective, with the average ransom, i.e. profits, extorted from shipowners being between USD 5 – 7 Million in cash, per incident.
Hull War Risk Underwriters and Hull War Risk P&I cover
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black flag showing a skull and crossbones automatically flashes through our minds each time we read or hear the word ‘piracy’ – I suspect that there must be a neurolinguistic programming into our minds since we were in our youth. Whilst reading comics containing stories of pirates , or watching Captain Hook’s adventures in movies, was an exciting and entertaining experience – maritime piracy is and has always been a crime with a severe detrimental impact on both the shipping industry and global economy, and, most importantly, in human lives lost, injured or psychologically traumatized. Maritime Piracy crime goes back to the seventeenth and eighteenth century. Between 1716 and 1726, pirates captured 2,400 vessels, an average of 200 vessels annually. In our era, between the year 2000 and 2004 the IMB and ICS recorded 920 attacks in S.E. Asia alone, out of 1,944 total world wide and until 2008 the average number of reported attacks had increased to 358 yearly! This number is considered conservative as many shipowners do not report piracy attacks against their vessels as this would result in incident’s investigation costs by Hull, War and War P&I underwriters which eventually could result in insurance premium increases. According to various estimates and reports by ICS, IMB and the IMO, maritime
38 NAFS | December 2020
Although ‘Piracy’ is a risk covered by the Institute War & Strikes, Terrorism and related perils Clauses Hulls, Time – 1.10.’83, this is primarily (not only) related to vessel’s Hull & Machinery, property damages (H&M/GA/Salvage etc.). Hull War underwriters provide annual cover policies on worldwide basis for damages to vessels’ H&M, that is to say any property damage caused by war, piracy, vandalism, sabotage malicious mischief, terrorists acts and related perils. There are other risks which differ from piracy and represent just as serious threats to the shipping industry, for example terrorism and terrorists’ acts. Ship Managers/ Owners/Operators, should also give consideration by adding a separate cover against new but very real threats resulting from cyber terrorism and cyber-crime, though currently deemed an exclusion under the standard Hull war risk and H&M policy. Although Hull War risk policy is providing cover 365 /24/7 on worldwide basis, it should be pointed out that there are High Risk Areas (HRA’s) which are excluded, unless additional war risk premium is paid by vessel’s owners or charterers. Vessels’ passage through High Risk Areas (hotspots) or a vessel’s call to an HRA port is covered subject to a prior notification and agreement is made with the Hull War underwriters. In these cases, cover is provided for as long as vessel remains in the HRA at an extra war premium charged due to the increased possibility of incidents at the particular territorial waters. Areas which have been declared as such (HRAs) are notated by the London Market’s Joint War Committee - JWC Hull War, Piracy, Terrorism and Related Perils – and are subject to regular updates. These additional war risk premiums vary from one area to another. The premium is determined by the level of activity during the duration of vessel’s passage – inwards/outwards. Other factors taken into account are the length, if any, of a vessel’s stay, what protective measures taken (such as armed guards), if vessel had been subject to previous attacks, vessel’s type, size, freeboard, speed and of course underwriter’s experience and knowledge about the risks he undertakes to write. Additional war risk premiums represent a significant cost to shipowners and charterers alike. Hull War risk P&I cover provides insurance for the legal liabilities of the assured shipowner / ship manager to the crew of the insured vessel(s) which arise from War and Strikes Risks and Civil Commo-
