Page 27 - Insurance Times February 2024
P. 27
Historical
Maritime
Fraud
Dr. Soumi Mukherjee
M.V B-Atlantic - War Risk Cover: An
Insurers Dilemma or Fraud!!
"War risk insurance is an insurance policy that provides financial protection to the policyholder
against losses from events such as invasions, insurrections, riots, strikes, revolutions, military coups,
and terrorism. It is offered as a separate policy as it is excluded from standard insurance policies
due to the high risks involved."
W ar risk insurance is an insurance policy that 63-66 of the same law provided for the seizure of the vessel
provides financial protection to the
in such circumstances. The vessel was therefore seized by
the Venezuelan authorities. It remained in detention until
policyholder against losses from events such
as invasions, insurrections, riots, strikes,
revolutions, military coups, and terrorism. It is offered as a August 2010, after which the Court ordered the final
confiscation of the vessel. The owners, having abandoned
separate policy as it is excluded from standard insurance the vessel to the Venezuelan court in September 2009,
policies due to the high risks involved. Businesses and treated the vessel as a constructive total loss and pursued
individuals that operate in high-risk countries are often good a claim under their insurance.
candidates for war risk insurance. Industries in the aviation
and maritime spheres may have more specific war insurance Although neither the owners {(Atlasnavios-Navegacao LDA
options tailored to meet their particular needs. For example, (formerly Bnavios-Navagecao LDA)} nor crew claimed to
war risk insurance may compensate a ships owner for the have been complicit in the smuggling (the drugs were
full cost of a vessel in cases where a government seizes the planted by unidentified third parties), the vessel was
ship. If war activities force a ship into temporary detention, detained, while two members of the crew (The captain and
war risk insurance may cover that loss of time. the second officer) were convicted and sentenced to 9 years
imprisonment. On the other hand, the owner abandoned
The following incident reflects a smuggling racket gone the vessel and claimed for a constructive total loss on their
wrong, which occurred on August 13, 2007 in Venezuela. war risks insurance, since the B Atlantic was insured on
Shortly after the completion of loading of a cargo of coal in the standard war risks terms contained in the Institute War
Lake Maracaibo, Venezuela for discharge in Italy, an and Strikes Clauses Hulls-Time (1/10/83) with additional
underwater inspection by divers discovered three bags of perils. They also claimed for sue and labour costs in respect
cocaine weighing 132 kg strapped to the hull of the B of efforts taken to try to secure the release of the vessel. In
Atlantic. This concealment constituted an offence contrary total, the owners claim exceeded USD 20 million. The
to Article 31 of the Venezuelan 2005 Anti-Drug Law. Articles insurers accepted that the drug smuggling was carried out
The Insurance Times February 2024 25
