Marine Special Protection Insurance

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Marine Special Protection Insurance

• Charlie Hanbury

The Insurance Industrys response to Piracy
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Hiscox

• Hiscox is an international specialist insurer and
  reinsurer with a reputation for integrity and
  quality
• Focus on key areas of expertise and strength
• We have looked closely at a bespoke solution for
  Piracy risks

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Piracy or Hijack?

• Would it be covered by a traditional Marine
  insurance?
• Maybe, but..

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Piracy - Traditional Coverage

• Hull and machinery
• War risks
• PI clubs

Do these coverages really provide a comprehensive
and primary insurance solution to Piracy?
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Issues

• Historically Marine HM insurers have not had to
  deal with the concept of hijacks.
• Piracy on the scale of the last 18 months is
  testing the Market.
• Policies which do not address piracy
  specifically.
• Lack of clarity - claims payments which are
  discretionary.

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Kidnap not Piracy

• Focus on ransom for crew.not physical damage

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Marine Special Risks Insurance solution

• Certainty that a piracy event is covered
• Control Risks services with Hiscox cover
• Loss of Hire for a piracy event

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Example of a Claim

• Ransom USD 1.5 - 3M
• Crisis Consultants fees expenses USD 300 -
  350K
• Additional Expenses
• Delivery of the Ransom USD 350K-1M
• Legal Advice USD 100-150K
• Salaries USD 50-75K
• Communication consultants USD 100-125K
• Other expenses psychological fees, medical fees,
  fuel costs etc.
• Post Incident legal liability claims?
• ? Total Loss USD 2.5 - 5M

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The Coverage

• Who is covered
• Anyone on board the insured vessel
• Where theyre covered
• Either on a single transit or annually on a
  declared transit basis
• Type of vessels and/or cargo covered
• Single vessel or fleet
• No exclusion in respect of type of cargo
• Vulnerability study according to DWT, freeboard,
  speed and cargo.

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Marine Special Risks Insurance policy

• Peace of mind
• Certainty about coverage.
• Guaranteed access to response consultants,
  Control Risks.
• Delicate and dangerous situation resolved by
  experts
• Efficiency
• Invoices paid directly by insurer or reimbursed
  very quickly, limiting impact on cash flow.
• No General Average, subrogation rights waived

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Thank you