A Study On Insurance Compensation On Piracy Ransom

It is unlawful for pirates to gain economic interests through the ransom,however, it seems no effective way to work this out concerning the safety oflife and the cargo value.The international communities have various positions on theinterpretation of the nature for piracy ransom, and it directly impacts thesupporting insurance system to cover this unusual risk. In this paper, thewriter deems the piracy ransom within the scope of “general average” after acomparative study among salvage at sea, particular average, general averageand risk of war.In order for creating a scientific insurance compensation system, thelegitimacy of piracy ransom should be specified in proper ways. The writerconsiders the payment of ransom is with a solid legal foundation in the realityas well as within the compliance of the principle of public policy through a case study under English law.Last but not the least, the writer recommends setting up an independentinsurance to cover the piracy ransom or adopting P&I insurance system.