Somali based pirate attacks on shipping have shown no sign of ceasing despite the use of naval forces. In response to patrols in the Gulf of Aden, pirates have expanded their area of operation deep into the Indian Ocean and along the African Coast from Somalia into the Mozambique Channel. This has made response by naval forces slower and deterrence more difficult. While the frequency of pirate incidents has not seriously disrupted the global supply chain, a hijacking can have severe consequences for individual ship owners and operators. Piracy in its current form is essentially a kidnap for ransom at sea. Therefore, a growing number of ship owners have turned to kidnap and ransom insurance as a cost-effective risk transfer method. Hiscox Marine Special Protection Insurance removes ambiguities over how piracy is covered under traditional marine insurance policies, while at the same time providing access to expert advice in managing the crisis. In the past, the focus of a piracy loss has mistakenly been on the payment of ransom. However, owners of hijacked vessels have quickly realized that ransom payments are only one part of a much more expensive, lengthy and complicated process. Recent cases have demonstrated that total costs of a piracy incident can be over five times that of the actual ransom payment. What we cover Covered events Hijack of vessel with demand for ransom in exchange for release of crew, cargo or ship Dedicated claims handling: even when partial recovery has been possible between several marine policies, timely payment can be elusive, taking months or years as insurers deal with claims that they consider unusual and the lawyers of multiple interested parties negotiate their participation. The clear intent of the Hiscox coverage expedites payment of claims. In addition, Hiscox's Marine Special Protection Insurance policy comes with dedicated claims professionals who have years of experience with similar losses. Loss, seizure or destruction of a ransom during delivery Covered losses Ransom payment Ransom payment lost, seized or destroyed Additional expenses including, but not limited to: -legal fees -fuel costs -cost associated with delivery of ransom -port fees -psychiatric and medical care of crew and family -public relations -travel and accommodation -salary continuation of crew -rest and rehabilitation -interest on loans taken to meet ransom demand Legal liability Fees and expenses of Control Risks response consultants Loss of hire or charter rate* Additional war risk premium* * Available by coverage extension Why Hiscox? World-class crisis management advisors at your disposal: hostage negotiation processes and tactics, logistics of ransom delivery, legal implications of your actions, public relations, communication with family members and government relations all require very specific expertise. The experienced advisers at Control Risks provide the support that enables owners to make informed decisions that help safeguard the lives of the crew and minimize the impact of a piracy event on their organization. Confidence in your policy: Hiscox Marine Special Protection Insurance is designed specifically to protect against the financial consequences that follow personnel or property being seized and held for ransom, and this coverage has been used for this purpose for over thirty years. This removes the uncertainty surrounding traditional marine insurance, where coverage may vary between countries or even different insurance markets in the same country for the same risk. This also avoids lengthy legal negotiations under General Average and potential avoidance by a cargo interest claiming lack of due diligence, unseaworthiness of the vessel, or due to bankruptcy. Avoid deterioration of war and/or P&I loss record: a Hiscox Marine Special Protection Insurance policy is intended to serve as the primary insurance coverage in the event of a piracy incident. Hiscox will not seek redress against other insurance inasmuch as the claim is clearly within the intent of the Hiscox policy. There is also no subrogation against cargo interests, thereby preserving commercial relationships. Risk areas Somalia remains the undisputed international hotspot for piracy, with activity off the country’s east and south coasts, the Indian Ocean, the Gulf of Aden, the southern Red Sea, the Straits of Bab El Mandeb, the Omani coast and in the Arabian Sea. Nigeria is ranked second to Somalia in terms of the total number of attacks. Although 28 attacks were registered in Nigerian waters in 2009, the actual figure according to the International Maritime Bureau (IMB) is likely closer to 60, as many attacks go unreported. The waters of Southeast Asia have historically been a third hotspot for piracy. The region accounted for the highest proportion of attacks globally between 1998 and 2003. However, in recent years high-risk countries, such as Indonesia, have witnessed a decline in the crime. The region has experienced a gradual decline in the number of reported incidents since 2004, but a spike in activity was recorded in the South China Sea between 1 January and 30 September 2009. The threat was deemed sufficiently severe that the IMB has issued a warning to all vessels traveling in the vicinity. Elsewhere, a number of incidents in Bangladeshi waters, particularly in the main port of Chittagong, has meant that the country continues to be regarded as high-risk by the IMB. Low-level incidents also continue to occur throughout the Caribbean, South and Central America. About Control Risks Control Risks provides strategic and operational advice, and global security assistance to the maritime industry. Their expert maritime consultants assist clients with assessing, planning and implementing all aspects of maritime security and crisis management. Over the last decade, Control Risks has been called upon to find solutions for maritime organizations operating in global piracy hotspots. Control Risks is uniquely positioned to assist clients in the management of a maritime hijacking. The team of ‘hands-on’ consultants combines in-depth knowledge of maritime and off-shore industries, with a thorough understanding of crises such as kidnap-for-ransom, hostage-taking, political detention and extortion. Acting exclusively as advisors, they will analyze the situation and guide clients in handling communications with all those involved, explaining the likely sequence of events. With almost three decades of experience, Control Risks is one of the world's leading providers of incident response services, and their advice has led to the successful resolution of more than 1,700 cases. The Control Risks maritime team comprises consultants from a wide variety of professional backgrounds, including former members of international special forces; domestic and foreign Army and Navy services (including anti-terrorist units); local and federal governments; the diplomatic community and foreign service; and international law enforcement authorities. Hiscox policyholders also have the peace of mind that whenever and wherever they need help, they can rely on Control Risks. Their operations center is manned 24-hours a day, 365 days a year by experienced consultants, able to provide advice and support when it is needed most. Control Risks will send a consultant anywhere in the world within 24-hours of being notified. Control Risks is under contract exclusively with Hiscox to provide priority crisis response to clients insured under kidnaps for ransom and extortion policies.