The compensation can raise up to $1.5m per event
Shipowners now are able to cover their expenses regarding claims over the use of armed guards. These expenses have been launched by Seacurus to cover the legal costs if the shipowners start the procedure to fight a claim. The compensation can raise up to $1.5m per event.
Claims have to be related with allegations of corporate killing, manslaughter, maiming or personal injury arising as a consequence of the accidental or deliberate discharge of armed guards on board the vessel. The risk is insured and can be written for a single voyage or on a fleet-wide basis.
The cover is suitable for owners who employ armed guards to protect their vessels whether or not they buy kidnap and ransom insurance. The legal costs arising out of an insured event would not be covered by the traditional insurances. Furthermore, they will not come under specific policies such as kidnap and ransom.
K&R insurance is only triggered by a demand for ransom and it is most likely that claims would arise during efforts made to avoid a hijacking. Consequently, the K&R policy would not be covered. K&R usually comes with a section covering owners if they are sued. While the policy is not specific to armed guards, it covers the owners liability for that transit or voyage.
A third party claim related to armed guard activity had yet to be brought against a shipowner. Protection and indemnity cover extends to defending a claim wrongfully placed against the shipowner. Some private security firms carry their own liability cover for their own personnel and for accidental injury or death to third parties. While P&I and security companies cover did afford some protection, the Seacurus policy offered shipowners clear and specific cover.
Furthermore, there could a divergence of interest between shipowner and security company. The shipowner will be able to have a cross-claim for damages against the armed guard company.
