Tuesday, December 02, 2008
Tuesday, 02 December 2008
SOME shipowners have started to take war risk insurance policy for their vessels plying in the pirate hotspot of the Gulf of Aden, said Lloyd’s Market Association (LMA) senior technical executive Neil Roberts. LMA is the representative voice of the Lloyd’s underwriting community. All managing agents at Lloyd’s are members of LMA, managing an underwriting value of around £16bil in total.
According to Roberts in an email interview, there was an annual war risk policy for vessels that passed through a listed war risk area.
“Shipowners need to notify underwriters who may decide to accept the risk, change coverage conditions or charge an additional premium,” he said.
“If war underwriters are not notified, they will not be liable to pay any loss caused while in the listed area,” he added.
The Joint War Committee (JWC) added in May the Gulf of Aden to its list of areas “as having an enhanced potential to cause a danger to ships or their crews”.
The situation has been deteriorating since.
JWC comprises underwriting representatives from both the Lloyd’s and The International Underwriting Association of London company markets.
It represents the interests of those writing war and related risks in the London market.
Roberts said some insurers also provided insurance coverage for kidnap and ransom as well, adding that they were very concerned about the ongoing situation in the Gulf of Aden.
“Insurers alone cannot act to resolve the problems, it will take a collective international political effort at government level to address the political situation in the area,” Roberts said.
“In the shorter term, the biggest problem is establishing an appropriate jurisdiction which will enable the prosecution of pirates – this mechanism will need to balance the security of international trade against the freedom of the seas,” he said.
As adapted from The Star Malaysia