Insurance against piracy for shipowners in Germany
By: Carsten Lexa, LL.M.
A group of German insurers will help shipowners in cases of war risks. For the first time, shipowners in Germany can get insurance against war risks. Shipowners will be able to insure their cargo ships against the consequences of martial conflict and pirate attacks.
Normally, German shipowners insure their cargo ships against these risks in London or Oslo. This is about to change. The consortium “German War Cover” will offer insurance policies based on German law in German language.
The consortium is let by the company “Lampe & Schwartze” in Bremen, in the northern part of Germany. For each ship the maximum coverage is 55 millions Euro. The consortium can also provide experts that are skilled in negotiating with pirates. The members of the consortium are not officially known. According to the Financial Times Deutschland involved might be Gothaer, R*V, Nünberger, Württembergische, Siat and Great Lakes.
Lampe & Schwartze does not act as an broker or an agent, but as a so called “Managing Agent”: Their experts assess the risks involved, determine prices, collect the premiums and and pay out in cases of losses. But they do not assume risks.
Regarding the question, which region in the world must be rated as a war zone, the consortium will stick to the decisions of the Joint War Comittees in the London insurance market Lloyd´s.
For inquiries please contact the author: kontakt@kanzlei-lexa.de
Is this what you call Extra War Risk Insurance (EWRI)? For our projects in Asia Pacific, we would normally need to transport umbilical or flexible pipes in reels by a heavy lift vessel from Europe. As the vessel passes through the Suez Canal, EWRI for the cargo is definitely included. Now what if a piracy off Somalia does happen and the reels are hijacked and missing irrecoverably? I understand that we, as the cargo owner will be compensated at the insured amount. but what happens to the missing reels that constitute the indispensable project materials? We would have to purchase the reels again? Since manufacturing time takes 8-12 months, the project will suffer a considerable delay. Thank you in advance for your explanation.