Somali Piracy Returns: Understanding the Risk and How Your Cover Responds
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Somali Piracy Returns: Understanding the Risk and How Your Cover Responds
A threat the industry thought it had retired
For nearly a decade, Somali piracy was a managed problem. Coordinated naval operations, the adoption of Best Management Practices, and the widespread use of armed security teams reduced successful hijackings to almost zero, and the Indian Ocean High Risk Area was formally removed in January 2023. That chapter has now reopened.
Somali pirate action groups have returned to offshore operations, using hijacked dhows as motherships from which armed skiffs are projected far into the Indian Ocean and Gulf of Aden. The campaign escalated sharply in spring 2026. The first successful hijacking of a merchant vessel came on 21 April, and between then and 2 May three merchant vessels were taken, two product tankers and a general cargo vessel, none reported to have carried an embarked armed security team. As this alert is issued, all three are assessed as highly likely to remain under pirate control in known holding areas within Somali territorial waters, held for ransom, and regional authorities have expressed grave concern for the crews, reporting deteriorating conditions on board and critically low provisions. No further successful hijacking of a transiting vessel has been reported since early May. Activity has instead shifted to repeated and increasingly aggressive approaches, concentrated in the Gulf of Aden and now reaching north of the International Recommended Transit Corridor, waters previously considered relatively unaffected. The widespread use of BMP measures, and embarked armed security in particular, is assessed as the decisive factor in preventing further seizures, and prevailing monsoon conditions are expected to sustain the threat until around September.
Maritime security analysts assess this as the early phase of a sustained operating cycle rather than an isolated flare. At least two pirate action groups are operating concurrently, shoreside infrastructure is established, and the enabling conditions remain in place: naval assets diverted to the Red Sea and Strait of Hormuz crises, and substantially increased commercial traffic along the Somali coastline as vessels route around the Cape of Good Hope and the advice to commercial vessels is to maintain a minimum distance of 150 nautical miles from the Somali coast.
What the incidents tell us about the risk
The vessels seized to date share a profile. All are small, older tonnage. All were transiting relatively close to the coast. None carried an embarked armed security team. That last point deserves emphasis, because the converse also holds: no vessel carrying a professional armed security team has ever been successfully hijacked off Somalia. The point was illustrated again on 10 June 2026, when a cargo vessel approached by an armed skiff southwest of Balhaf, Yemen, repelled the attack after its armed security team returned fire, the small craft turning away with no harm to the vessel or crew.
For owners and operators, the risk picture therefore breaks down into familiar components, each of which maps onto a specific element of insurance cover. A hijacking puts the vessel out of trade for the duration of negotiations, historically around eight weeks on average and sometimes far longer. The vessel and cargo deteriorate under pirate control. The crew face captivity in conditions that, on the reports emerging from the vessels currently held, include restricted food and water and armed guard, with consequent injury, trauma, and welfare claims on release. And resolution itself carries cost: ransom, specialist negotiators, crisis response, and the logistics of recovering vessel and crew.
How the Club’s War Risk cover responds
Where piracy cover sits depends on the conditions a vessel is written on. Under English conditions piracy has conventionally been treated as a marine peril, but modern underwriting practice removes it from the hull and marine policy by standard exclusion and relocates it to the war policy. The Nordic Plan reaches the same destination more directly, classifying piracy as a war peril within war risks cover. Members should confirm how piracy is treated under their own conditions, as the route to cover varies between market forms. The consistent outcome is that piracy exposure is carried by the war policy. The Club’s War Risk insurance is designed to close this gap. Piracy is expressly among the covered perils, alongside traditional war perils.
In a hijacking scenario, this architecture matters. War Hull responds to physical damage sustained in the boarding and during the period of pirate control. Physical and Non-Physical War Loss of Hire addresses the income lost while the vessel is out of trade, an exposure that grows with every week a vessel is held. P&I war cover addresses crew liabilities arising from the incident, which on current evidence will be a material component of any resolution given the conditions in which crews are being held.
The terms of the Club’s War Risk insurance for 2026, the accompanying Club Clauses, and the List of Areas of Perceived Enhanced Risk applicable from 3 March 2026 were published under Circular No 449/2025. Members trading to or through listed areas should note the breach terms and notification requirements that apply, and should speak to their underwriter about intended trading patterns.
Kidnap and Ransom: closing the remaining gap
Even with war risk cover in place, a hijacking for ransom gives rise to costs and exposures that fall outside standard marine and war policies. The Club’s Kidnap and Ransom insurance is designed to fill this gap. Cover extends to ransom payments and the loss of ransom monies in transit, the fees of crisis management and specialist response consultants, legal liability arising from a covered event, additional expenses such as crew rest and rehabilitation and port and fuel related costs, and personal accident benefits following a kidnapping or hijacking incident.
The cover is written on an annual basis and applies worldwide. Transits through certain designated high risk areas are chargeable as breach transits, and a small number of excluded high risk areas remain subject to additional premium and conditions. Members trading in the affected region who do not currently hold Kidnap and Ransom cover are encouraged to discuss the product with their underwriter.
A note on sanctions
Piracy incidents in this region carry a sanctions dimension. Al Shabaab is designated under UN, US, UK, and EU sanctions regimes, and intelligence reporting has identified cooperation between Somali pirate groups and designated actors. Any payment or service connected to the release of a vessel must be assessed against the risk of making funds available, directly or indirectly, to a designated person, and the position differs between regimes.
Guidance:
- Check intended voyages against the List of Areas of Perceived Enhanced Risk effective 3 March 2026 and comply with the notification requirements under the applicable war risk terms.
- Apply the consolidated BMP Maritime Security guidance, carry out voyage specific threat and risk assessments, and follow EU NAVFOR routing advice where operationally possible.
- Give serious consideration to embarked armed security for transits through the affected region. The incident record speaks for itself.
- Review the adequacy of war risk arrangements, including non-physical Loss of Hire and P&I war cover, and consider Kidnap and Ransom cover with limits in light of current ransom demand levels.
- In the event of an attack or hijacking, contact the Club’s emergency line immediately and before engaging any negotiator or intermediary.
References
War Risk Insurance Terms 2026 (Circular No 449/2025)
Club Clauses for War Risk 2026