There are three tiers of pirate protection for every vessel. The price is set the same way any other insurance rate is: by a calculation of risk. The ship's key statistics -- size of ship, size of crew, length of journey, transport route, docking port, etc. -- are weighed and evaluated.
First, there's the basic hull insurance, which insures damage to the ship and its cargo from 'marine perils.' There's some debate about whether this covers damage incurred from a pirate attack, so there's another plan -- the ominously named 'war policy' -- that is sure to protect you from violent damage. Just to be safe, there's also a kidnapping and ransom policy -- 'K&R' to those in the nautical know -- that insures against losses of what the pirates are really after: money. Portfolio magazine has reported that K&R premiums at one leading insurer, Hiscox, are now 10 times the price they were a year ago, but Hiscox declined to confirm or deny that number to me. Brendan Flood, a member of Hiscox's marine staff, did confirm that 'quite clearly rates have gone up' over the last six to nine months. None of the companies I interviewed for this story would share hard numbers on how much it costs to take out any of the insurance policies.
Also, Kenya is trying to get an anti-piracy conference underway:
The Kenyan government says it is willing to host an international conference that brings world leaders together to tackle the problem of piracy off the coast of Somalia. The announcement follows numerous warnings from analysts that the piracy situation is likely to get worse unless the world also recognizes the root causes of it.
By: Brant
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