Pirates And Marine Insurance

The recent wave of piracy, which is attracting the people's attention, is putting more and more pressure on the world shipping industry. Instead of plundering ships and robbing the cargoes, the pirates are now keen on arresting the ships, cargoes and crews to extorting a huge sum of ransom from ship-owners. It is necessary for us to make a research on the piracy risks, especially the legal issues resulted from ransom, since the pirates attacks are on an increasing trend. Beginning with the history, reasons and hazards of piracy, this article compares the definition of piracy in the International Law and Marine Insurance Law. Aiming at making some contributions to the theoretical research and shipping practice of China, the article try to settle the disputes on the character and legitimate of ransom as well as the methods of remedying the loss of ransom based on the analysis of the current situation of piracy insurance.This article is divided into three parts, which includes the introduction words, main body and conclusion. The introduction part describes the research background and objects, the goals and methods of research in addition with the innovation of this article. There three chapters constitute the main body. The first chapter lays the foundation of the analysis on the ransom in the following chapter by introducing the separate concepts of piracy in International Law and Marine Insurance Law, the differences between the piracy and terrorist in the basis of presenting the history, the current situation, the causes and the hazards of piracy. The second chapter illustrates different kinds of insurance clauses that cover the loss caused by pirate attacks, and analyzes the problems among them, which involve the nature and legitimate of the ransom, the loss-sharing system of ransom. This chapter also proposes the different ways of compensation about ransom in the light of various circumstances and discusses the methods of sharing loss under general average based on the analysis of judicial practice and the characteristics as well as the components of loss existing in marine insurance. According to the innovations taken by the world marine insurance industry ,such as"kidnap and ransom insurance","loss of hire insurance", chapter three raises the solutions of the problems stated in the chapter two and also put forward some suggestions for China to improve its marine insurance system about underwriting piracy risks. Eventually, the conclusion gives a clear and concise summary of this article.