A timely report (See above article) from Aon Risk Services warns that “ship-owners navigating the Gulf of Aden are seeing insurance premiums for kidnap and random (K&R) increase tenfold as piracy escalates. This means ship-owners could be paying $30,000 premium for $3 million of cover for one journey through this piracy hotspot.”
Nevertheless, Aon said, “more are opting for cover to protect their employees as well as avoiding lengthy detours that threaten supply chains and increase petrol costs.”
Specialist piracy policies for kidnap and ransom insurance can include cover for consultant and negotiator costs, ransom demands and medical care. These can be bought for individual transits or on an annual basis to bring down the cost.
Ashley Leszczuk from Aon’s crisis management team commented: “The cost of insurance is simply rising in correlation with the risk of kidnap in piracy hotspots. Despite the presence of naval ships, the spate of piracy attacks over the last six months does not seem to be abating with increased civil unrest and pirates’ easy access to rocket launchers and AK47s. As such we’ve seen enquiries for cover escalate as ship-owners seek to protect their employees and businesses.”
Aon also indicated that around “70 percent of ship-owners are opting for localized policies for the Gulf of Aden, the Gulf of Guinea stretching down to Somalia and the Straits of Malacca while a third of policies placed by Aon cover all locations worldwide.”
Source: Aon – www.aon.com
Was this article valuable?
Here are more articles you may enjoy.