Kidnap & Ransom Insurance (KRI) Cover for Indian Shipping Companies
Shipping companies are increasingly opting for an additional kidnap and ransom cover, besides taking the standard hull and machinery cover, in the wake of rampant piracy off the coast of Somalia, reports the local media. The cover for kidnap and ransom is bought on a voyage-to-voyage basis, and not for a year like other policies. The premiums are decided on a weekly basis as the situation can change every day.
“It has become a necessity for the ships that pass through the Gulf of Aden, because of the increasing attacks from pirates,” said Mr K Ramachandran, Executive Director, J.B. Boda Insurance Brokers referring to kidnap and ransom cover.
An executive at the insurance department of Shipping Corporation of India says that although, traditional marine insurance does cover piracy, it does not provide adequate cover against hijack of ships. “Along with traditional marine policy, now ship owners are opting for the specialized marine kidnap and ransom insurance policy which provides guarantee for reimbursement of the ransom, cost of delivery of ransom and legal costs that may occur during a period of illegal seizure,” he said.
Apart from the kidnap and ransom cover, shipping companies are also paying higher marine insurance premiums. These have been jacked up by 20-25% because of the increased number of pirate attacks in the Gulf of Aden, according to industry sources.
Source: www.asiainsurancereview.com
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