Says new insurance fills the gap in cover for the financial impact of business interruption

Aon has launched a new insurance policy for charterers, shipowners and cargo owners to cover loss of earnings from a ship being detained by pirates.

There have been over 50 reported attacks off the coast of Somalia, with 32 vessels hijacked, in the first eight months of 2008.

The average time a vessel is detained is 60 days, which means that charterers have been incurring the cost of paying charter hire for these additional days without receiving any extra income, according to Aon. Cargo owners are also facing the risk of cancellation of contracts due to the delay.

Relevant hull and war clauses cover physical loss or damage arising from piracy, and ransom is either dealt with by specific coverage or by owners attempting to recover labour expenses.

Aon claimed there is a potential void in cover for the financial impact of business interruption or loss of earnings.

The cover is triggered from day one of the attack (with no deductible) and is a standalone policy to complement existing hull, war, cargo and P&I cover.

Peter Townsend, Aon’s head of marine hull, said: ‘The recent spate of pirate attacks in the Gulf of Aden/Horn of Africa has highlighted how shipowners and charterers are incurring significant uninsured costs with no recourse. We decided to do something about it across the marine industry so all parties affected by an attack could recover their loss of earnings.’

Peter Dobbs, CEO of Aon’s UK marine team, added: ‘This year has seen our marine clients facing a raft of risks as shipowners face tighter margins in the credit crunch and hull rates begin to increase. Against this backdrop, Aon has stepped up its innovation to provide our clients with solutions that respond to the real challenges facing their businesses - such as piracy attacks.’