Does my owners’ P&I policy cover piracy?

• Although P&I cover excludes war risks, the definition of “war risks” does not include piracy (Skuld Rules Appendix 1). This means that P&I risks such as crew claims, cargo damage and pollution will not be excluded on the ground that they are caused by acts of piracy.
  However, some owners have piracy included in their war risks cover. For example, the Norwegian Marine Insurance Plan includes piracy as a war risk - see Norwegian Marine Insurance Plan § 15..20-22 (amended in 2010). Members who have insurance cover on Norwegian terms will therefore be covered for piracy P&I claims (such as crew compensation)  by their war risks insurance provider rather than their P&I Club. Japanese war risks cover also includes piracy.

Have P&I Clubs issued any guidance to shipowners?

• The International Group issued issued FAQs in September 2011, replacing the earlier version issued in June 2009 to provide guidance on a number of insurance issues. These are under review.
   
  The International Group has also given its full support to the Best Management Practices (BMP4) and, along with other industry organisations, strongly urges all owners to ensure that the BMP are observed, particularly as regards the registration and reporting requirements.

What if claims arise through the use of weapons?

• The definition of excluded war risks also refers to mines, torpedoes, bombs, rockets, shells and explosives and “other similar weapons of war”. The general view is that the use of guns or rifles would not fall within the scope of this definition. However an RPG might do so. See also Section on armed guards.

Will vessel loss or damage be covered under my hull or war risks policy?

• This depends on the terms of cover. Under the Norwegian Marine Insurance Plan (§ 2.9), piracy falls under war risks cover. In contrast, from 1983 the London market generally covered piracy under the hull policy. Although alternative wordings have been available since 2005 transferring piracy to the war risks policy (International Hull Clauses 2002/3), these were not widely used at first.However as a result of the escalation of piracy owners now find that hull insurers insist on a piracy exclusion with the result that this risk is now transferred to war risks policies. Insurance on London market terms generally means that the piracy P&I risks nonetheless remain with the P&I Club. In contrast, if cover is on Norwegian terms, the war risks insurer will assume responsibility for P&I piracy risks.

Does my charterers’ policy include piracy?

• Skuld’s combined P&I and CLH cover contains the same definition of war risks as in owners’ policy. Cover is therefore not excluded for claims arising from an attack by pirates.

Is additional insurance available?

• Special Kidnap & Ransom cover is available through Skuld.

What are the areas Listed by Underwriters?

• Standard P&I cover is not subject to geographical restrictions or reporting requirements. However hull and other types of insurance are generally subject to restrictions. The Listed Areas identified by the Lloyd’s Market Association Joint War Hull Committee are often used. On 16 December 2010 the area affected by Somali piracy was extended and is now as follows:
   
  The waters enclosed by the following boundaries:
  a) On the north-west, by the Red Sea, south of Latitude 15° N
  b) on the west of the Gulf of Oman by Longitude 58° E
  c) on the east, Longitude 78° E
  d) and on the south, Latitude 12° S
  excepting coastal waters of adjoining territories up to 12 nautical miles offshore unless otherwise provided.